What is the 'Health Insurance Portability and Accountability Act (HIPAA)'

Health Insurance Portabiilty and Accountability ACT (HIPAA) is an act created by the U.S. Congress in 1996 that amends both the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act (PHSA). HIPAA was enacted in an effort to protect individuals covered by health insurance and to set standards for the storage and privacy of personal medical data.

BREAKING DOWN 'Health Insurance Portability and Accountability Act (HIPAA)'

Health Insurance Portability and Accountability Act (HIPAA) ensures that individual health-care plans are accessible, portable and renewable, and it sets the standards and the methods for how medical data is shared across the U.S. health system in order to prevent fraud. It preempts state law unless the state's regulations are more stringent. 

This act has been modified since 1996 to include processes for safely storing and sharing patient medical information electronically. The act also has an administrative simplification provision, which is aimed at increasing efficiency and reducing administrative costs by establishing national standards.

Health insurers, health maintenance organizations (HMOs), healthcare billing services and other entities that handle sensitive personal medical information must comply with the standards set by the HIPAA. Noncompliance may result in civil or criminal penalties.

Challenges for HIPAA in the Digital Age

In an age of fitness-tracking apps and GPS-tracked, shareable data on everything from an individual’s daily step count to their average heart-rate, medications, allergies, and even menstrual cycles, there are new challenges for upholding standards in storing and protecting personal medical data.

In 2009, the Health Information Technology for Economic and Clinical Health Act (HITECH) broadened HIPAA privacy and security protections. The HITECH Act was enacted as part of the American Recovery and Reinvestment Act of 2009 as well as to promote the use of health-information technology. A portion of the HITECH Act addresses the privacy and security concerns.

In 2018, Bloomberg Law reported on the privacy risks that come from digital health-care data and the likelihood of updated federal laws in the near future. Currently, though insurance companies and health-care providers are subject to laws that require compliance with HIPAA’s security and privacy protections, companies like FitBit and Apple aren’t held to similar standards. In a video interview, Nan Halstead, a health privacy and security attorney with Reed Smith LLP, said that future laws are unlikely to expand on HIPAA but rather use its framework as a model to create new laws governing the digital sector. Bloomberg’s reportage further elucidates that while no federal laws have yet been passed to manage consumer health data, states can pass laws that fill the gap in the meantime, and companies tracking consumer data are subject to supervision by regulating bodies like the U.S. Food and Drug Administration and the Federal Trade Commission.

  1. Portability

    Portability is an employee's ability or right to retain certain ...
  2. Allied Healthcare Professional ...

    Allied healthcare professional liability insurance provides coverage ...
  3. Medical Cost Ratio - MCR

    Medical cost ratio is the comparison of a health insurance company's ...
  4. Medical Identity Theft

    Medical identity theft involves the use of another person's health ...
  5. Medical Underwriting

    Medical underwriting is the process of assessing the risk associated ...
  6. Health Insurance

    Health insurance is a type of insurance coverage that pays for ...
Related Articles
  1. Insurance

    Why Health Insurance Premiums Will Rise in 2017

    To battle the costs and challenges of the Affordable Care Act, many health insurances are raising their premiums in 2017.
  2. Personal Finance

    If Your Kid Is 18, You Need These Documents

    When your child turns 18, you lose many of your rights as a parent. Here's how to regain them with the proper legal documents.
  3. Insights

    A Real Solution for the Health Insurance Market

    It's time for our representatives to come together and find a healthcare solution for everyone.
  4. Insurance

    5 Alternatives to Traditional Health Insurance

    Discover five of the most popular alternatives to traditional health insurance plans, alternatives that are increasingly popular as health insurance costs rise.
  5. Insurance

    4 Ways to Find Good Health Insurance

    Follow these 4 steps to get the best coverage at the most affordable price.
  6. Tech

    How Big Data Has Changed Healthcare

    Like many other industries, healthcare has adapted to data analytics not only for its financial returns but also improving patient’s quality of life.
  7. Insurance

    What If Obamacare Is Repealed?

    During the campaign, Donald Trump promised to repeal Obamacare. If, as president, he follows through, how will that affect Americans?
  8. Insurance

    Your High-Risk Life Insurance Questions Answered

    Here are some answers to questions about obtaining life insurance if you are considered high risk.
  9. Insurance

    Do This If Health Insurance Doesn’t Cover Your Bills

    Health insurance doesn't pay enough to help the millions of consumers who are drowning in medical debt. Are there any other options to soften the blow?
  10. Insurance

    Don’t Have Health Insurance? What’s the Worst That Could Happen?

    Healthcare is expensive, but those without healthcare coverage put themselves at risk.
  1. Can I get dental insurance with Obamacare?

    Discover how you can obtain dental insurance as part of a health plan or on a standalone basis through the Health Insurance ... Read Answer >>
  2. Operation management in healthcare

    Discover how operations management theory is applied across a broad spectrum of operational and management issues in the ... Read Answer >>
  3. What are catch-up contributions for Health Savings Accounts (HSAs)?

    Learn about Health Savings Accounts (HSAs) and how an eligible individual of age 55 or older can make additional catch-up ... Read Answer >>
  4. What are key government regulations that affect investing in the banking sector?

    Discover how the global financial crisis of 2008 changed the face of banking in the United States and around the world by ... Read Answer >>
Trading Center