A bill pending in the House would expand employers’ ability to collect employees’ medical information, including the results of genetic tests, through “wellness” programs. Participation in these programs is nominally voluntary—but failing to participate can cost an employee thousands of dollars.

The bill passed a House committee earlier this month on a party-line vote, with Republicans in favor and Democrats opposed. Its fate is uncertain, especially after the implosion of the GOP’s broader health-care agenda on Friday.

Defenders of the bill say it merely clarifies some murky provisions of current law, while opponents say it tramples on workers’ privacy while giving employers a golden opportunity to discriminate against employees at risk of getting sick. It’s a tense debate—and an odd journey we took to get here.

The story starts, as stories about American health care often do, with the fact that employers are expected to provide health insurance to their employees. This began as an artifact of World War II-era wage controls and persisted through Obamacare’s mandate that employers with at least 50 employees offer coverage. With that in mind, the concept behind a wellness program is straightforward: since healthy employees cost less to insure, companies give employees money for engaging in healthy behaviors.

Participation can involve meeting blood-pressure, smoking, or exercise goals. In return, under the limits established through Obamacare, employees receive rewards of up to 30 percent of the cost of individual health coverage—and up to 50 percent for smoking-cessation programs. (Obamacare overrode the previous limit of 20 percent on the dubious assumption that these programs are highly effective in reducing health costs.)

Wellness programs can also solicit personal medical information, including genetic data, to identify disease risks. But there are limits on how this information is collected and handled, usually by third parties rather than directly by the employer. Personal medical data cannot be given to the employer except in an anonymous, aggregated form, for example, and genetic testing cannot be tied to financial incentives. Companies are also barred from collecting medical information about employees’ parents or children (which is considered genetic data about the employee himself, since disease genes are shared within families).

The problem is that these limits are cobbled together from a variety of different laws, some of them ambiguous or contradictory. The agency tasked with overseeing these programs, the Equal Employment Opportunity Commission (EEOC), has come under fire from both sides.

A lawsuit by the AARP, for instance, claims that wellness programs should not be allowed to require employees to provide personal medical information. The Americans With Disabilities Act says that providing such information must be voluntary, and in the AARP’s view, it’s not voluntary if thousands of dollars hinge on the decision to participate. Employers, meanwhile, say that the EEOC’s interpretation of the law is too hard on them, creating a maze of “complex and inconsistent regulations” that don’t align with the vision for wellness programs laid out in Obamacare.

The GOP bill, called the Preserving Employee Wellness Programs Act, resolves these tensions in an employer-friendly way, declaring, contrary to the EEOC’s interpretation, that some major anti-discrimination laws don’t apply to wellness programs. It would also remove wellness programs from the EEOC’s jurisdiction and place them under the authority of several other executive agencies.

Under the bill, wellness programs could require employees to provide information about family members’ medical histories, and could require employees and their families to undergo genetic testing. Protections against sensitive information being shared directly with an employer would be weakened, though it would still be illegal to discriminate on the basis of that information. The bill would also allow higher incentives for participation, up to 30 percent of the cost of family coverage, not just individual coverage.

Supporters point out that it would clarify a tricky area of the law, and they downplay concerns that employers might acquire and misuse medical information. More broadly, supporters see wellness programs as a free-market-friendly way to bring down health costs and would like to make sure the programs are not overregulated.

The case against the bill, meanwhile, has been nicely summarized by Nicholas Bagley, a law professor at the University of Michigan who specializes in health care. Bagley writes that if the bill is read literally, it completely overrides the current rule that employers can’t receive individually identifiable genetic data on employees. He’s also troubled by the bill’s broad language allowing “open season on your family’s medical history”:

imagine that your spouse is an alcoholic or that your 22-year-old son was just diagnosed with schizophrenia. Employers aren’t supposed to use that kind of information to discriminate against you. But they’ll be sorely tempted: through your employer-sponsored coverage, they’re on the hook for your family’s medical expenses.

Of course, the issue goes much deeper than this particular bill. For decades government policy has given employers a financial stake in their workers’ health—and thus a strong incentive toward paternalism.

To be sure, there’s a certain appeal to the idea that people who make healthy decisions should reap some of the financial rewards, and inversely, that those who smoke or eat poorly should not be able to offload the resulting medical bills on everyone else through a company insurance plan. It can also make sense for individuals to take stock of their genetic and family risk factors so they know which diseases they should work especially hard to prevent.

The question is the role that employers should play in all this, and the steps we should take to ensure they don’t misuse the information they are privy to.

Robert VerBruggen is managing editor of The American Conservative.

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