Genetic testing limitations, as well as state mandates of various kinds, are affecting how health insurance products are designed and used. Here is an update on these current trends.

Regarding genetic testing, there are several points the health insurance industry needs to keep in mind concerning such information.

First, remember that the various authorities do have legitimate reasons for requiring genetic tests. These include using the tests to determine paternity, to obtain helpful information related to the care and treatment of infants, and to aid in crime detection.

However, the information brought to light by a genetic test cannot be used for a purpose other than those specified by state law - unless a person signs a disclosure and consent form. (Several states - Arizona, New York and Oregon, among them - have even mandated what language should be used in the consent form.)

Where underwriting is concerned, state regulation and federal legislation under the Health Insurance Portability and Accountability Act of 1996 both stipulate that insurers cannot use genetic information for underwriting purposes. Neither can insurers refuse to renew a policy or certificate because of genetic testing.

Moreover, as with other medical information about insureds, genetic information is subject to the restrictions imposed by confidentiality of medical information legislation.

Turning to the issue of state mandates for health insurance coverage is issued in 2000, the trends are clear. The mandates we are seeing now 1) limit medical exclusions and 2) also expand the level of benefits an insurer must provide.

In fact, in several states, a health plan's exclusions for dental reimbursements, oral contraception, mental illnesses, and investigational or experimental drugs and treatment may now be modified to some extent so as to provide certain amounts of coverage in these areas. Here are some examples: --Dental Care: General Anesthesia and Hospital Charges. Several states now mandate coverage to reimburse expenses for small children (average age is seven and under) and children who are severely disabled.

These states also say the policy must reimburse expenses for a person for whom a successful result cannot be expected from dental care provided under local anesthesia because of a neurological or other medically compromising condition. Likewise for any person who has sustained extensive facial or dental trauma (unless covered by workers' compensation).

States where this is seen include Georgia, Indiana, Kansas, Maryland, Mississippi, New Jersey, North Dakota, Oklahoma, and Wisconsin.

--Contraceptive Coverage: Some states mandate coverage for all prescription contraceptives approved by the federal Food and Drug Administration and any outpatient contraceptive services. This coverage is mandated to the same extent as coverage is provided for other prescription drugs or outpatient medical services.

States where this is seen include Connecticut, Georgia, Maine, Nevada, New Hampshire, North Carolina, and Vermont.

--Severe Mental Illness Coverage: Some states say this coverage must be provided under the same conditions as other illnesses under a health benefit plan. Serious mental illnesses are usually defined as biologically based mental illnesses, including schizophrenia, bipolar disorder, obsessive-compulsive disorder, major depressive disorder, panic disorder, anorexia nervosa, bulimia nervosa, schizo- affective disorder, and delusional disorder.

States that have enacted this requirement are California, Delaware, Hawaii, Louisiana, Missouri, Montana, Nebraska, Nevada, New Jersey, Oklahoma, and Virginia.

--Experimental or Investigational Treatment of Cancer: Although some states have previously enacted legislation on this subject, the number of states requiring this coverage is expanding in 2000. The purpose: To provide funding for clinical studies to be conducted by nationally recognized cancer research facilities.

States adding this are Illinois, Rhode Island and Virginia.

In related trends, many states have begun dropping the distinction between group and individual insurance, where state-mandated benefits are concerned.

For instance, we have seen changes to the code sections and regulations of several states that apply the mandates to all policies and certificates delivered in their states. This means those states are taking extra-territorial jurisdiction over certificates delivered in their state, even though the master group policy was delivered in another state.