Companies are increasingly willing to pay for their employees' medical history details, with workplace "wellness programs" growing as large employers try to reduce health care costs.
In exchange for filling out detailed health risk assessment questionnaires, or undergoing biometric screenings, employees are offered cash incentives, or insurance premium savings.
However, not everyone sees it as a fair trade.
"Employees are giving up some aspect of their privacy and their personal health information," Georgetown University Health Policy Institute Assistant Professor Dania Palanker explained to CNBC's "On the Money" recently.
According to the Kaiser Family Foundation, 35 percent of large firms (defined as 200 or more employees) pay an incentive between $150 to $500 for a completed health risk assessment. Another 23 percent of large firms surveyed say they pay between $500 and $1000 for the questionnaire.
Yet Palanker said workers are questioning "whether their privacy is worth the amount of money that is at stake."
She explained that some wellness questionnaires ask about genetic predispositions or pre-existing conditions for you and your family members. Palanker said that disclosing sensitive health information may make some employees "nervous [about] what your employer might do having that information."
Other experts, however, disagreed vigorously.
"The allegation that somehow you've given your health information or your spouse's health information to your boss and they're going to use that against you, it's just to scare people, it's not real," said James Gelfand, senior vice president of health policy at the Erisa Industry Committee, a trade association that represents employers and workplace benefit programs.
The question is legitimate as more big corporations collect health data on their employees. According to the Kaiser Family Foundation, 74 percent of large companies offer wellness programs, and 59 percent ask employees to complete Health Risk Assessments (HRA). Meanwhile, 53 percent run biometric screenings that measure blood pressure, weight and cholesterol among other readings.
"This information is not going to your boss, it is not going to the HR department, it is not going to your company," Gelfand told CNBC. "It goes to a third party, a vendor. What that vendor does is it takes your information along with all the other employees who participate and de-identifies it so your privacy is protected. It aggregates that information and it gives a report back to your company."
While the wellness programs are voluntary, not participating in them can be costly.
Under new Equal Employment Opportunity Commission (EEOC) rules, set to go into effect next year, employers can set the financial incentive as high as 30 percent of the annual cost of a worker's health insurance.
Yet AARP, the large consumer interest group for Americans over age 50, is suing the EEOC. The AARP is arguing that wellness programs violate anti-discrimination laws that protect workers' medical information.
In the lawsuit, AARP is also challenging the assumption that wellness programs are voluntary, if the cost of not participating is so high.
Kaiser estimates the average cost of health insurance coverage is more than $6,000. With an incentive of up to 30 percent, not participating can cost workers a penalty of nearly $2,000.
Gelfand admitted that "you have to have the financial incentive or people won't participate in the wellness program."
But he argues since employers foot the bill for "75 percent of the cost of health care and are on the hook for every medical claim," wellness programs benefit both employers and workers.
"If you can find a way to empower your employees and their families to better their own health and to make good health care decisions," Gelfand said, "then everybody wins because you save money on health care costs."
Still, Georgetown's Palanker said if workers are concerned about the privacy of their medical information, but are asked to complete these assessments or screenings for an incentive, they need to weigh "that amount of money versus their comfort in sharing the information. It's a very personal decision."
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