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Pennsylvania Enacts New Protections for Living Donors
By Robert J. Hobaugh, Jr., Esquire
Pennsylvania now promotes organ and tissue donation by adopting the Living Donor Protection Act (the “Act”), which became effective June 26, 2021. The Act prohibits providers of health or life insurance coverage from discriminating against living donors of human organs or tissue (each, a “Donor”). Further, it tracks the federal Family and Medical Leave Act in granting to employees leave from work for preparation and recovery necessary for surgery related to organ or tissue donation. The Act also directs the Pennsylvania Department of Health (the “Health Department”) to develop informational materials for donors and donation of organs and tissue. Finally, a violation of the Act by insurance providers is actionable as an unfair or deceptive act under the Unfair Insurance Practices Act.
The public policy underlying the Act is “to encourage more people in the Commonwealth to give the incredible gift of organ donation” according to a House of Representatives Memorandum dated December 18, 2020 (the “Memo”). The Memo was published in connection with the introduction of HB 203 of 2021 drafted to prohibit discrimination by providers of health and life insurance. The actual prohibition runs against “Insurers” which are licensed by the Pennsylvania Department of Insurance (“Insurance Department”) under either (a) The Insurance Company Law of 1921, (b) the Health Maintenance Organization Act, (c) 40 Pa.C.S.A chapter 61 regarding prepaid hospital plan corporations or (d) 40 Pa.C.S.A. chapter 63 regarding nonprofit health service plans.
Those Insurers may not discriminate against people by adversely limiting or conditioning coverage. First, Insurers may not “engage in any of the following actions against an individual based solely upon the individual’s status as a [Donor] without additional risk based on sound actuarial principles reasonably related to actual or anticipated loss experience: (i) Decline to provide an insurance policy to an individual[;] (ii) Limit coverage under an insurance policy of the individual[; or] (iii) Otherwise discriminate against the individual regarding premium rating, offering, issuance, cancellation, amount of coverage or any other condition of an insurance policy.” Act at §4(a)(1).
An Insurer may avoid those prohibitions upon finding additional risk in insuring a Donor “based on sound actuarial principles reasonably related to actual or anticipated loss experience.” Insurers and their economic advocates have undertaken and will undertake loss experience studies related to Donors. According to the American Transplant Foundation, “[t] here has been no national systemic long-term data collection on the risks associated with living organ donation. However, there are studies currently gathering such information. Based on limited information that is currently available, overall risks are considered to be low.”
Second, Insurers may not “[p]reclude an insured from donating all or part of an organ or tissue as a condition for receiving or continuing to receive coverage under an insurance policy….” Act at §4(a)(2). The exception to this prohibition is as to life insurance. An Insurer “may decline to issue a life insurance policy to an applicant with a scheduled donation until the applicant is released without complication by the surgeon to the care of the applicant’s primary care physician.” Act at §4(a)(2).
To what risks are Donors exposed? According to the American Transplant Foundation, “As with any other surgery, there are both [short-term and long-term] risks involved in living donation. Surgical complications can include pain, infection, blood loss, blood clots, allergic reactions to anesthesia, pneumonia, injury to surrounding tissues or other organs, and even death. As transplant surgeries are becoming more common and surgical techniques are advancing, risks involved with living donation continue to decrease... Risks can differ among [D]onors and the type of organ.” Read more about those risks at the website of the American Transplant Foundation: https://bit.ly/3F5rEnw.
The Act purports to track the federal Family and Medical Leave Act (“FMLA”) in granting to employees leave from work for preparation and recovery necessary for surgery related to organ or tissue donation. A “covered employer” is to grant “eligible employees” leave from work. Who is an “eligible employee” under the FMLA? An eligible employee is (a) employed by a “covered employer,” (b) has worked for the covered employer at least 12 months, (c) has worked at least 1,250 hours during that period, and (d) works at a location where the covered employer has at least 50 employees within 75 miles. A “covered employer” is: (1) a private sector employer with 50 or more employees in 20 or more work weeks in the current or preceding year, (2) a local, state or federal government agency with any number of employees, or (3) a public or private elementary or secondary school with any number of employees. For whose surgery is the leave granted, related to organ or tissue donation? The leave is granted “when the eligible employee is unable to work because of a serious health condition or when the eligible employee must care for the eligible employee’s spouse, child or parent with a serious medical condition, for the preparation and recovery necessary for surgery related to organ or tissue donation by or for the eligible employee or the eligible
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employee’s spouse, child or parent.” Act at §5(a). An employer may require such an employee to submit “written documentation regarding the preparation and recovery necessary for surgery described under subsection (a).” Act at §5(b).
The Act may be read so as to enlarge the FMLA regarding tissue donation. The U.S. Department of Labor (“Labor Department”) had already opined as of August 28, 2018, that organ donation invokes the protections of the FMLA. In Opinion Letter FMLA2018-2-A, the Labor Department states “[o]rgan-donation surgery, however, commonly requires overnight hospitalization... and that alone suffices for the surgery and the post-surgery recovery to qualify as a serious health condition.” But section 5 of the Act also extends leave from work related to tissue donation. Note that an “organ” under section 2 of the Act is defined as “[a] human kidney, liver, heart, lung, pancreas, esophagus, stomach, small or large intestine or portion of the gastrointestinal tract or another part of the human body designated by the [Health Department] by regulation.” But “tissue” is defined under section 2 of the Act, separately, as “[a] portion of the human body other than an organ, including, but not limited to, a human eye, skin, bone, bone marrow, heart valve, spermatozoon, ova, artery, vein, tendon, ligament, pituitary gland or fluid.” If the Act purports to extend protections consistent with the FMLA and the Labor Department reasons that organ donation invokes the protections of the FMLA only with overnight hospitalization, then will the Act be interpreted to cover tissue donation only if its surgery requires overnight hospitalization?
A violation of the prohibited practices under section 4 of the Act is declared to be an “unfair or deceptive act or practice under …the Unfair Insurance Practices Act.” Act at §6. The Unfair Insurance Practices Act is codified at 40 P.S. §§ 1171.1 et seq. (“UIPA”). Under the UIPA, consumers may file complaints against an Insurer with the office of the Insurance Commissioner of the Commonwealth of Pennsylvania (the “Commissioner”). The Commissioner is authorized to investigate an Insurer to determine whether an unfair or deceptive practice (a “Violation”) has occurred. Following an administrative hearing, the Commissioner may impose an administrative penalty and issue a cease-and-desist order (each, an “Order”). Upon violation of an Order, the Commissioner may file a complaint with the Commonwealth Court or the Court of Common Pleas in the county where the Violation occurred seeking to enjoin further Violations. The Commissioner may also file a complaint in a civil action seeking economic penalties. In any such civil action, the court is authorized to impose a penalty of $5,000 per Violation but not to exceed an aggregate penalty of $50,000 in any sixmonth period where “the person knew or reasonably should have known” it was a Violation, or $1,000, capped at $10,000 in a six-month period, where “person did not know nor reasonably should have known” it was a Violation. 40 P.S. §1171.11(2) and (3).
The Health Department is required to develop and publish informational materials regarding Donors and the live donation of organs and tissue. Those materials must include, at a minimum, (1) the benefits of donation; (2) the impact of living donation on the Donor’s access to insurance and assistance; (3) the reduction in Federal adjusted gross income, for State personal income tax purposes, granted to Donors; and (4) the protection granted under the Act, including rights under the FMLA and the right to file a complaint with the Wage and Hour Division of the Labor Department if the Donor believes the Donor’s employer is not in compliance with the FMLA. Note that Pennsylvania already provides a tax credit to employers who provide paid leaves of absence to employees for organ or bone marrow donation. 72 P.S. §8803. These materials shall be distributed in print form and the Internet website of the Health Department.
Rep. Tarah Toohil (R-116) was the primary sponsor of HB 203 which became the Act. In the Memo, Rep. Toohil states, “Organ donation saves lives and saves money, cutting health care costs by as much as two-thirds and saving Medicare millions of dollars every year. The [Act] will ensure that people who make the life-saving choice to become organ donors will not face economic roadblocks because of their decision.” HB 203 was signed in the House of Representatives and the Senate on April 21, 2021. Governor Thomas Wolf approved the Act on April 27, 2021, and it took effect 60 days later. The Act is one of many similar state enactments protecting organ donors. Sen. Kirsten E. Gillibrand (D-NY) introduced on February 23, 2021, a form of the Living Donor Protection Act as S.377 in the United States Senate. You can learn more about Donor protection among the states through the American Transplant Foundation at: https://bit.ly/30xsudM.
