This seems entirely reasonable.
If the employer is providing health insurance, they can reasonably ask you to provide information that would allow them to shop for that coverage. The group insurance market in the United States is a bit complicated but there are various situation where a health underwritten quote either necessary or at least desirable. In order to get that sort of quote, the insurance company providing the quote would need to know about your health history.
Ideally, this sort of information wouldn't be visible to anyone in your company. It would only be visible to the health insurance company providing the quote and to any broker that is working with your company and the insurance company. If your company is using paper forms rather than one of the electronic systems, however, it is possible that information will leak to whoever in your company deals with the paper forms. You may be able to ask your company either to look into the electronic options that are available in your area in order to improve security and prevent this leakage.
Realistically, you probably weren't asked for this information in the past because your company was just renewing their current group policy. The current carrier policy might not be health underwritten in which case the carrier would just require information about the number of people covered, ages, smoking status, and a few other variables. Or the current carrier might be basing the quote on the information they have about the group's actual claims over the period. Just renewing the same policy every year rather than getting new quotes periodically, however, can result in companies paying much more than they need to for health insurance leaving less money available for other types of compensation.