You should consult with an employment attorney in your area as your post raises a few questions that would require a more detailed discussion. For example, HIPAA is a Federal law that prohibits involuntary disclosure of private medical information to third parties. That being said, there are certain circumstances in which medical information may be necessary for an employer, such as for qualified leave of absence or fitness for duty examination. It sounds like the information contained in your post goes beyond what is customarily sought by employers, assuming your employer is not a health care organization.
If the form is intended to convey the information to the insurer, and the information on the form is kept in a separate file available only to those with a strict need for access to the document to convey it to the insurer, then it is acceptable for the employer to distribute such forms and collect them and then convey them to the insurer.
Good luck to you.
This answer should not be construed to create any attorney-client relationship. Such a relationship can be formed only through the mutual execution of an attorney-client agreement. The answer given is based on the extremely limited facts provided and the proper course of action might change significantly with the introduction of other facts. All who read this answer should not rely on the answer to govern their conduct. Please seek the advice of competent counsel after disclosing all facts to that attorney. This answer is intended for California residents only. The answering party is only licensed to practice in the State of California.
If this is the scenario that Mr. Pedersen has described, I do not see a cause of action, as it is allowed. If not, then you could always get a consultation with a plaintiff employment lawyer, many give free consultations, check beforehand. Also, many take the case on contingency if they want to take it. Use the "find a lawyer" tool on this site, and your local bar association is a good referral source as well.
We do not have an attorney-client relationship. I am not your lawyer. The statements I have made do not constitute legal advice. Any statements I have made are based upon the very limited facts you have presented, and under the premise that you will consult with a local attorney. This is not an attempt to solicit business. This disclaimer is in addition to any disclaimers that this website has made. I am only licensed in California.