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Home > Privacy and Business > Medical Privacy > How Tax Policy Undermines Health Privacy

How Tax Policy Undermines Health Privacy

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 employment contract.

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.


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[updated 02/18/01]

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