In a last-minute legislative session on New Year’s Eve, the Massachusetts Legislature passed a bill banning sex discrimination in disability insurance.
Women’s rights advocates have been pushing for years to ban insurance companies from charging women more than men for policies. But insurers say there are legitimate reasons for considering sex in deciding how likely someone is to make a claim.
Gov. Charlie Baker has 10 days from Monday to decide whether to sign or veto the bill.
Baker’s spokesman said the governor is carefully reviewing several pieces of legislation passed by the Legislature on Monday.
Dierdre Cummings, legislative director for the consumer group MASSPIRG, called the passage of the bill “good news” for Massachusetts families. “For far too long, women have been paying more money for the same product,” Cummings said.
The bill, H.482, sponsored by Rep. Ruth Balser, D-Newton, would prohibit a company that issues disability insurance from discriminating against someone based on race, color, religion, national origin, sex, pregnancy, gender identity, sexual orientation or marital status. The insurer would not be allowed to reject an applicant, cancel a policy or demand higher premiums based on those categories.
The bill would go into effect Jan. 1, 2020.
Today, disability insurance purchased through an employer is gender neutral. But individual disability insurance policies, which are regulated by the state, can be adjusted based on sex. According to a fact sheet provided by the bill’s supporters, 11 percent of disability policies in Massachusetts, covering 182,000 people, are rated based on gender.
Insurance rates for six companies that were filed with the state Division of Insurance between 2012 and 2015 show that women paid on average 23.5 percent more than men for disability insurance.
For a 50-year-old non-smoker, for example, annual premiums for a man would be $1,278 and for a woman would be $1,866, according to statistics provided by supporters of the bill, based on Division of Insurance filings.
Advocates for the bill say if a woman has the same job and same health history as a man, it is unfair and discriminatory to charge her more money for a disability policy.
But insurers cite statistics showing that women are more likely than men to make disability claims, so they say charging women more is justified by the additional risk.
At a 2015 hearing, representatives of the insurance industry said women nationwide buy 60 percent of policies for long-term care but account for 70 to 80 percent of claims. They said the probability of a working person becoming disabled for at least 90 days between ages 35 and 65 is 15 percent for men and 23 percent for women.
Under the Affordable Care Act, health insurers cannot charge a woman more for a health insurance policy solely because she is a woman. Massachusetts already has laws requiring car insurance and homeowners' insurance to be gender neutral.