Employees

The Strangeness of Employer-Sponsored Healthcare

The Strangeness of Employer-Sponsored Healthcare

Karen Cornelissen

Karen Cornelissen

Did you know? Some 156 million people in the United States are on an employer-sponsored health insurance plan. This means that many people have employers who are quite involved in their experience with healthcare and if for no other reason than because their employers are picking up at least some of the tab in the form of premiums or by paying for the health insurance claims outright. And let’s face it—that’s kind of strange. 

If you are one those people for whom the thought that your employer could know every lurid detail about your health is disturbing—fear not. Fortunately, healthcare is subject to heavy regulations, and even if employers themselves are not on the hook to comply with those regulations, the health plans they sponsor are, and penalties for violating your rights to privacy can be severe.  

It would seem, then, that there is a bright clean line with employees wanting to keep intimate health details about themselves under wraps on one side, and employers striving to comply with stringent regulations around privacy on the other, but the reality is messier. There’s a big difference between your employer complying with privacy laws when it comes to your most sensitive health data and your employer being involved on any level in your health and wellness.  

It would seem, then, that there is a bright clean line with employees wanting to keep intimate health details about themselves under wraps on one side, and employers striving to comply with stringent regulations around privacy on the other, but the reality is messier. 

It would seem, then, that there is a bright clean line with employees wanting to keep intimate health details about themselves under wraps on one side, and employers striving to comply with stringent regulations around privacy on the other, but the reality is messier. 

It’s not unusual for your employer to be interested in your health—your health is an indicator of your ability to keep showing up every day to do your job. Also, the expense your employer picks up by sponsoring your health insurance is based on the severity of and the quantity of the healthcare that you need to be well. And, if your employer is sponsoring your health insurance to help you deal with the cost of your care, then your employer wants to know that the insurance works and makes you feel cared for! (Are you sensing the messiness, yet?) And, frankly, no matter how odd it is that your employer is involved in your life on this level, the concept of employer-sponsored health insurance is nothing new. Employers have been sponsoring health insurance plans in the United States for nearly a century 

A little history on the employer’s involvement in US healthcare.

How did this strange partnership evolve? Why is our healthcare tied to our employer, anyway? Until the 1930s, it wasn’t. As David Rook explains in the JP Griffin Group blog, Americans took care of paying for medical services on their own, and that didn’t change until the onset of the Great Depression and then World War II. The government was aware that desperate economic times meant that many Americans were foregoing their medical needs in pursuit of other basic necessities, so politicians began to consider the merits of universal healthcare. Around this time, private health insurance plans began to appear, but carriers sold them to individuals. It also wasn’t lost on Americans what war could do to exacerbate economic difficulties. War stirred fears of unchecked inflation. To combat that, the government restricted how much employers could raise wages in tight labor markets. As a result, employers started offering health insurance benefits to attract talent since they couldn’t simply offer higher wages, and the trend of padding wages with other benefits to lure workers continues to this day. 

What to do with the strangeness—and the mess—at hand.

What can be done about all this? Well, you could go on your merry way never really thinking about your employer’s involvement except in unavoidable moments like when you get a benefits email from your company. Or, you could adjust your mindset and broaden your awareness a bit:   

  1. Learn about how healthcare regulations can shape what your employer does and you’re your employer knows about your health information. 

2.  Be mindful of the consent you give. 

3.  Don’t think of your employer as an adversary. 

Learn about how regulations shape what your employer does and knows about your health information.

If the idea that your employer knows a few things about your health gives you pause (or the full-on heebiejeebies!), then let’s review some basic things to know in this space. 

HIPAA

HIPAA is the Health Insurance Portability and Accountability Act of 1996. Among other things, it requires the protection of protected health information regarding how it is transferred, received, treated, or shared. It also stipulates that parties may only use or share the minimum health information necessary to conduct business.  

What is private health information?

This information is all data that is individually identifiable health information (or any health information that identifies a specific person) that a covered entity or one of its business associates holds or shares. This information is data that relates to a person’s past, present, or future health or condition, that relates to the health treatment of an individual, and that relates to the past, present, or future payment for the treatment of a person. 

Who is required to protect it?

All covered entities and their business associates are required to comply with protecting PHI under HIPAA. Notably, covered entities under HIPAA include healthcare providers (such as a physician), healthcare clearinghouses (such as a billing service), health plans, and business associates (entities who not on the workforce of a covered entity but participate in activities on the entity’s behalf) but not employers themselves. Rather, HIPAA privacy protection applies to an employer’s request for protected health information, which may be from a covered entity like a doctor. That person or group may not disclose that information without your consent or unless the law allows.  

You have a right to know how your PHI might be shared and a right to consent or object the sharing of that information. 

Are there exceptions?

Yes, and the discussion here is not at all comprehensive. Sometimes when HIPAA does not apply, other bodies of legislation may offer protection. Other bodies of legislation that may be worth doing a bit of additional reading on include the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act

Be mindful of the consent you give.

Generally speaking, if you have misgivings about who may gain access to your PHI, then pay close attention to the consent you give. (See above about your employer’s request for PHI!) Read every form or request presented to you regarding the sharing, handling, or use of your PHI, and do not sign or agree if you are uncomfortable with the terms. 

Don’t think of your employer as an adversary.

Your employer wants what you want, and that makes your employer an ally. 

Your employer wants what you want, and that makes your employer an ally. 

It’s important not to look at your employer as the enemy, here. Seriously. Employer-sponsored health insurance can feel like an awkward struggle, but that doesn’t mean your employer is your foe. Quite to the contrary. Don’t let the strangeness of your employer’s involvement in all this stuff in the first place make you think of your employer as an adversary. In reality, you and your employer want the same things, and that isn’t true of every entity in the healthcare space. Some parties are interested in seeing you consume as much care as possible (and you generally consume more care the sicker you are) because it maximizes their profits. Your employer, on the other hand, is interested in seeing you be well and getting quality healthcare at an affordable rate. When you are well, you can keep working, and getting good quality care at an affordable rate means you and your employer could save money.  

Your employer wants what you want, and that makes your employer an ally. 

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