What Is HIPAA?

Have you heard of HIPAA? If you’re like most people, you haven’t. After all, most of us don’t keep up with every law passed by Congress. And to make matters worse, HIPPA doesn’t even have a catchy name. As far as names go, COBRA is a lot easier to remember — though what that name has to do with healthcare is anybody’s guess.

But HIPAA could have important implications for any employer offering group health insurance. So if you haven’t heard of it, here’s what you need to know.

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The Health Insurance Portability And Accountability Act — HIPAA for short — was passed in 1996. It has two parts: Title I and Title II.

• Title I offers insurance coverage for people who change careers or lose their jobs.
• Title II sets security and privacy standards for how doctors, hospitals, health insurance companies, and employers handle sensitive health information.

HIPAA Title I — Insurance Protection For Employees

The first part of HIPAA says that anyone who has health insurance can’t be excluded from coverage when they change plans.

The law is supposed to prevent “job lock.” For example, a diabetic person could be discouraged from changing careers — or accepting a better position with a different company — out of fear that their new health policy would exclude them (or specifically not cover anything related to diabetes). HIPAA makes sure that person will be covered.

For employers, this can mean hiring someone with a pre-existing health condition and paying a higher premium for your group health plan. But it also means that when you’re hiring, you have a chance of attracting the most qualified people, regardless of their health — because they know they won’t lose their coverage.

HIPAA Title II — Protecting Health Information

Title II set several rules about ending healthcare fraud, making the healthcare system more efficient, and protecting people’s health information. The two rules that employers should pay attention to are the “The Privacy Rule” and “The Security Rule.”

• The Privacy Rule protects any information related to a person’s health status, their use of healthcare, and payment made for healthcare. A person has a right to request that information, and have any mistakes in it corrected. As an employer, you might have access to this information — and the law requires you to treat it as sensitive.
• The Security Rule requires that any health information in your possession be safeguarded from improper use. This includes everything from making sure only “appropriate” employees can access sensitive information to making sure that the computers storing that information are disposed of properly.

Whether or not these rules would apply to your business is up for debate. HIPAA defines who the law applies to very loosely. And like a lot of Federal laws, it’s full of loopholes and exceptions.

What should you do to make sure you’re compliant with the law? Talk with a professional insurance agent. Before you set your business up with a health insurance plan, it’s a good idea to find out what — if anything — you need to do to stay within the law.

When you’re ready to talk with an agent, use our free online group quote service to get matched with agents. They’ll answer your questions and help you choose the right policy for your business.