Do employers look at health insurance usage, and use that data to possibly lay people off for incurring too much usage?
1) Would such a practice be legal 2) Even if it were illegal, could employers be using such data regardless?
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The "Privacy Rule" of HIPAA would prohibit this from happening. §164.504(f)(2)(ii) imposes requirements on group health plan documents (agreements), which must
Provide that the group health plan will disclose protected health information to the plan sponsor only upon receipt of a certification by the plan sponsor that the plan documents have been amended to incorporate the following provisions and that the plan sponsor agrees to
(C) Not use or disclose the information for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the plan sponsor;
We can infer from this that the insurer could disclose to the sponsor such details (since the sponsor must agree not to use it to e.g. fire people).