Medical Insurance – A Guide to the HIPPA Act

The Health Insurance Portability and Accountability Act, better known as HIPAA, is an act that was set forth in 1996 by the United States Congress. HIPAA is designed to protect workers’ health insurance coverage for themselves and their families in the event they lose or change their jobs. Title I regulates the breadth and availability of certain individual health insurance policies as well as all group health plans. HIPAA amended the Internal Revenue Code, the Public Health Service Act and the Security Act for Employee Retirement Income.

Title I of the Act also puts a limit on the restrictions that group health plans can place on preexisting conditions benefits. Group healthcare plans are allowed refusal and may not provide health insurance benefits to an individual with preexisting health conditions for 12 months post-enrolled; this time is extended to 18 months if they enrolled into the plan late. Although this is the case, this amount of time can be reduced by the individual if they had health insurance or group health plan coverage before enrolling. This Title allows the individual to use the amount of credible coverage they had to reduce the amount of time they are excluded from coverage.

Title II of the HIPAA Act has several programs that are designed to control abuse and fraud within the health care system. This Title requires the Department of Health and Human Services to create standards for the dissemination and use of health care information. The Privacy Rule of the HIPAA Act refers to the regulation of the disclosure and use of health care information that is held by covered entities. Cover entities include health care providers, health care clearinghouses and health plans that transmit data regulated by the HIPAA Act.

In addition to the Privacy Rule, the Security Rule is its compliment and was set forth in 2003. The Security Rule is focused more so on the protection of electronic health information while the Privacy Rule is focused on both paper and electronic Protected Health Information (PHI). Three different types of safeguards for security are laid out as requirements for compliance: technical, physical and administrative. The final rule that was set forth by the HIPAA is the Enforcement Rule, which was issued in 2006. This Rule is designed to set monetary penalties for violating HIPAA rules.