On January 10, 2019, Governor Baker signed a law banning sex discrimination in disability insurance, meaning insurers can no longer charge women more than men for disability insurance policies. The bill, H.482, which was sponsored by Rep. Ruth Balser, D-Newton and passed during a last minute legislative session on New Year’s Eve.
In commenting on the passage of the bill into law, Representative Balser said,
Women’s rights groups have been working to eliminate gender discrimination in insurance since the 1970s when Massachusetts adopted the Equal Rights amendment to the state constitution. Slowly and incrementally, Massachusetts has eliminated gender disparities in most insurance products including automobile, homeowners, health, and annuities,” said Representative Ruth Balser, the lead House sponsor of the bill. “Today we have eliminated the unfair practice of charging women more than men for the same disability protection. Many thanks to the large coalition of groups led by the Mass Commission on the Status of Women, the legislature, and the Governor for insisting that Massachusetts continues to lead when it comes to ensuring equality for all.”
For his part, upon signing the bill into law Governor Baker remarked that “I am pleased to sign this bill ensuring everyone in the Commonwealth has fair and equal access to disability insurance. Discrimination of any kind has no place in Massachusetts, and I thank the Legislature for passing this legislation and working with our Administration to continue to support women across the state.”
Massachusetts is only the second state in the Union, after Montana, to have passed a law eliminating gender discrimination in disability insurance.
The law applies to group or individual disability, and accident or sickness policies
The new law adds a new section, 108K, to Mass. General Laws Chapter 175.
The provision prohibits any insurer, its officers, or agents from making or permitting:
any distinction, classification, discrimination, or otherwise recognize any difference, on the basis of race, color, religion, sex, marital status, or national origin in the amount or payment of premiums or rate charges, or in the benefits payable…
The new law applies any group or individual disability, accident or sickness insurance contract issued or delivered within or without the commonwealth on or after January 1, 2011 which covers one or more residents of the commonwealth.
The law also makes a violation of its provisions ” an unfair method of competition or an unfair or deceptive act or practice in violation of chapter 176D.”
Under chapter 176D, the commissioner of insurance has authority to issue cease and desist orders and impose fines of up to $5,000 for each violation.
Historically women have been charged more than men for disability policies
According to data provided by State Senator Jason Lewis’ website, a co-sponsor of the bill, division of insurance filings demonstrate that Massachusetts women pay more for the same disability insurance benefits as their male counterparts within the same occupation class. Senator Lewis noted that the information proved this true “across the board, regardless of the insurance company, the age of the purchaser, the occupation class, the duration of benefits, whether long-term or short-term disability insurance.” As a result, in almost all cases, women pay on average of 23.5% more than men. However certain policies have women paying as much as 61% more than men.
MASSPIRG, a fervent supporter of the bill noted that individual disability policies account for 11% of all disability policies in Massachusetts and as such are rated based on gender. This equals approximately 182,000 people who have individual, gender-priced insurance policies. Advocates of the law say that charging women more than men for disability policies is inherently unfair and discriminatory, especially if they have the same job.
Over one’s working career women are more likely to be sick or hurt than men. Would it be fair for women to pay the same rates for life insurance as men when men are more likely to die at any age? No. Actuarially, we know women are more likely than men to lose income as a result of sickness. Age and gender affect the likelihood of a disability, but so do weight, health, smoking and other factors. An average male (5’9” 155 lbs) has a 24% chance of an accident or sickness, lasting three months or longer during his working career, an average female (5’3” 135 lbs) has a 27% chance…
Classifying risk in the underwriting process has long been recognized and approved by the Commonwealth, and is embodied in the General Laws. M.G.L.A. Ch. 176D, Section 3(7) deems it to be an unfair method of competition to treat individuals of the same class and equal expectation of life differently. The laws permit carriers to charge individuals with different expectations of life different rates for. The need of insurance companies to classify risks, and the legitimacy of that practice, has also been recognized by our Supreme Judicial Court in the cases of LIAM v. Commissioner of Insurance, 403 Mass 410 and Telles v. Commissioner of Insurance, 410 Mass 460.
Under the Federal Affordable Care Act, however, health insurers are prohibited from charging a woman than a man for the same health insurance policy. Also, Massachusetts had previously passed similar legislation prohibiting gender discrimination in both auto and homeowners insurance. And now the same has occurred with disability insurance.
Effective date of the new law
The Governor signed the bill into law on January 10, 2019. The bill did not appear to contain an effective date and there is no emergency preamble that would have made it effective immediately. Thus, the law should take effect ninety days after the Governor’s signature or on April 10, 2019.
