Health Insurance Portability & Accountability Act (HIPAA)

Passed in 1996, the Health Insurance Portability & Accountability Act (HIPAA) is a legislation that simplifies and improves the functioning of the health insurance system. It brings certain legal protections to those who hold individual and group insurance policies.

Some of the main provisions of HIPAA are as follows:

  • HIPAA protects the insurance coverage of workers and families when they change or lose their jobs.
  • HIPAA hinders the ability of an employer sponsored health insurance plan to not cover preexisting conditions, and limits pricing discrimination for coverage of preexisting conditions.
  • HIPAA enforces the proper handling and confidentiality of important patient health information.

If one changes or loses their job, they may be concerned that their new individual insurance or new employer’s healthcare plan will deny them coverage or exclude them coverage of certain preexisting health issues. HIPAA dictates that no one, regardless of previous health issues, can be denied health coverage under an employer sponsored plan.

HIPAA also dictates that those who have 12 months of continuous health coverage before enrolling in a new employer sponsored plan cannot be denied coverage of any preexisting condition. Any break of insurance coverage under 63 days counts as continuous coverage. If one goes longer than 63 days, then they may be subject to preexisting condition denial of coverage. HIPAA declares that a person can only be denied coverage for a certain health issue if they had received treatment for it in the previous six months. Conditions like pregnancy, certain newborn and child medical issues and genetic information are not included in this. Denial of coverage can last between 12 and 18 months.

Those who go the route of obtaining coverage under an individual healthcare policy are covered by HIPAA protection if they previously had 18 months of continuous health insurance and their previous insurance was with a group policy. They must also have used up their COBRA coverage, and must not be eligible for Medicare or Medicaid.

Beginning in 2014, the issue of health coverage of preexisting conditions will change again under the Patient Protection and Affordable Care Act (PPACA). At that point, adults will no longer be denied coverage for any preexisting medical condition.

One of the biggest issues that HIPAA addresses is the confidential treatment of medical information. It puts forth national regulations governing the handling of protected health information such as medical and lab test results, doctor’s notes and billing information. The law tries to strike a balance between protection of patient privacy and the necessary communication of medical information in emergencies to qualified individuals. Medical providers and organizations that store or transmit medical information must comply with these privacy laws or be hit with a fine of up to $50,000.

When HIPAA was passed, many provisions were enacted to protect the American citizen’s rights to continuous healthcare coverage without being discriminated against because of previous healthcare problems. As stated above, some HIPAA provisions will be changed under the Affordable Care Act, which was passed in 2010.

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