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Does Your Use of Company Benefits Come with Privacy?

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Shutterstock/Andrii Kondiuk

Shutterstock/Andrii Kondiuk

If you’re reading this at work, you’re most likely aware that anything you do online can be monitored by your employer. From Googling “polar vortex” last month to all the news you read this week, your online activity is practically as public as your power suit.

But what sort of privacy can one expect of more personal issues related to the workplace, such as health insurance claims or use of company benefits? This was the question raised when AOL’s chief executive started an internal town hall meeting last month about reduction in benefits—and nonchalantly referenced two private claims-related situations as reasons for cutting back benefits for all AOL employees.

While announcing a change in the way retirement plan matching benefits would be paid out, Tim Armstrong stated: “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost.”

Almost immediately, news outlets, blogs and social networks were abuzz with conversations about “distressed babies” and the implications of outing employees whose use of health insurance benefits came with a certain expectation of privacy. The mother of one of the babies Armstrong referenced wrote a piece in Slate outlining the challenges faced by her premature daughter and how it felt to have a personal situation be exploited as justification for corporate cost-cutting.

HIPAA, the Health Insurance Portability and Accountability Act, restricts sharing of confidential health information as a whole. For employers, in most cases, only certain company representatives are allowed to see such information as it relates to employee use of company benefits.

In the case of AOL’s CEO, legal experts question whether he was an authorized recipient of such reporting. “It’s likely an impermissible disclosure,” said NY-based lawyer Lisa J. Sotto in a New York Times article on the topic. “There is a permissible group that is pinpointed to administer the health plan, and they are not permitted to disclose that information [beyond what’s approved].”

Ultimately, AOL reversed the change to its retirement policy but questions of employee privacy remain. And besides some initial scrutiny of Armstrong’s actions, there don’t seem to be many answers.

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March 24th, 2014 at 3:54 pm

Posted in Legal News,Privacy

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