What’s Who You Love Got to Do with It? Allegations of Sexual-Orientation Discrimination in the Context of Insurance Underwriting

A Massachusetts lawsuit in which a gay man is alleging that his sexual orientation was a discriminatory factor in an insurer’s refusal to issue him a long-term care (LTC) insurance policy could have ramifications for insurers nationwide. At issue in the case is the drug protocol called pre-exposure prophylaxis (or PrEP). PrEP was approved by the FDA in 2012 for those at high risk of exposure to HIV as a means of lowering their chances of HIV infection. PrEP consists of two HIV medications working together in one pill to prevent the HIV virus from replicating. The pill, originally approved by the FDA in 2004 as an HIV treatment, is marketed as Truvada. As the name of the protocol indicates, PrEP is meant to be taken before [pre] exposure [coming in contact with the virus] to prevent HIV infection [prophylaxis]. Based on Department of Health and Human Services’ guidelines, gay men are some of the most likely people to benefit from the PrEP protocol.

With the advent of this protocol, insurers have been faced with this question: What effect, if any, will Truvada usage have on the underwriting of certain insurance policies? The decisions that have been made on this question are coming under scrutiny because it is being alleged, with some frequency, that gay men are being discriminated against when insurers refuse to issue them certain insurance policies because they use Truvada.

PrEP: An Insurance Case Study

The Massachusetts case that is poised to test the boundaries of both insurance law and that state’s public accommodation laws is John Doe v. Mutual of Omaha Insurance Co., No. 1:16:-cv-11381-GAO (D. Mass. 2016). Specifically at issue is whether Mutual discriminated against Doe and violated Massachusetts law by denying him public accommodation in the form of an insurance policy. Even though the lawsuit relates specifically to LTC insurance, the outcome could have much broader implications for other types of policies and how insurers consider PrEP in their underwriting process.

Plaintiff is an HIV-negative gay man who is using Truvada as PrEP. He submitted an application for LTC insurance to Mutual in late 2014. Doe filled out a medical questionnaire, answered medical history questions in a telephone interview and provided authorization for Mutual to obtain medical records. After considering the information it had gathered as part of its underwriting process, Mutual denied Doe’s application in early 2015. In its letter to Doe, Mutual stated that Truvada “is on our uninsurable list of medications.” In response to the denial, Doe submitted an appeal and included a letter from his physician, stating: “John Doe is taking Truvada for HIV prevention. Truvada is an extraordinarily safe and effective medication. He maintains a healthy lifestyle and remains in good health.” Mutual sent a letter upholding the denial which stated:  “We do not offer coverage to anyone who takes the medication Truvada, regardless of whether it is prescribed to treat HIV infection, or is used for pre-exposure prophylaxis. This is in accordance with our underwriting guidelines.”

Doe then filed the lawsuit and alleged that by refusing to issue him an LTC insurance policy Mutual had denied him public accommodation in violation of Massachusetts law. His contention is that because approximately 80 percent of PrEP users are gay men, Mutual’s blanket denial of coverage for all Truvada users has a disparate and discriminatory impact on all gay men who are PrEP users. Mutual denies any wrongdoing and denies that its actions are in any way discriminatory and that its denial is for all Truvada users, whether they are gay men or otherwise.

We will update the blog as the lawsuit progresses and with any issues related to similar allegations.