Among the many concerns about health privacy is the problem of businesses using
their employees' private health information to make adverse decisions about them.
Health is sometimes an important occupational qualification, so a simple ban on
employers considering health in their decisionmaking would not work. But for
routine employment situations, employers should not generally have
access to employees' health information unless disclosure is a term of the
The root source of this problem is federal tax policy, which treats employee
health benefits as tax-exempt and distorts the market for insurance. This has
many adverse consequences, among them the fact that employers are sometimes
put in a position to learn and use health information about employees that they
otherwise would not.
Rather than imposing new regulations on how employer-sponsored health plans may
use information, Congress should address the source of the problem by restoring to
consumers the incentives to buy insurance for themselves.