LONGMONT — Well before last week’s deadline, one Internet vendor was hawking software to customize policy and procedure manuals for $495 — with overnight delivery available.
The new privacy provisions of the Health Insurance
Portability and Accountability Act, which took effect April 14, give employees more health-benefits-related information rights, but it puts
employers at greater risk of lawsuits.
“Before, sharing information about an employee’s health-benefits-related information was at the discretion of the employer,” explained Philip L. Gordon, an attorney at the Denver office of Littler Mendelson, the nation’s largest labor and employment law firm.
Now, he explained, the much stricter regulations require employers to disclose to employees how that information is being used.
For instance, they must notify employees when they disclosed the information, to whom, what type of information was disclosed and why.
Employers typically release health benefits-related information to process insurance claims, to resolve disputes when coverage is denied, to determine benefits eligibility and when writing a new group insurance policy.
However, that information also could have been pulled without the employee’s knowledge to make employment decisions such as hiring and firing, Gordon said.
For instance, if an employee requires $30,000 a year for kidney dialysis treatment, that information could be used to discriminate — an illegality that could be prosecuted by individual or class action lawsuits.
Under the new HIPAA regulations, an employer must inform an employee when his file is pulled for any reason.
The new regulations implemented last week apply to any employer nationwide who sponsors a health plan with $5 million or more in annual receipts.
By this time next year, Gordon said, those employers administering health plans with $5 million or less in annual receipts will need to follow suit.
Pam Mellskog can be reached at 303-776-2244, Ext. 224, or by e-mail at email@example.com.