HIPAA: Back to Basics

The Health Insurance Portability and Accountability Act (HIPAA) focuses on protecting the privacy and security of individuals' medical information while also ensuring that people maintain health insurance coverage when changing or losing jobs. HIPAA is divided into five titles, each addressing different aspects of healthcare regulation.

Title I: Health Insurance Reform

Title I provides protection of health insurance coverage for workers and their families when they change or lose their jobs. Key provisions include:

•      • Portability: individuals are able to maintain their health insurance coverage when moving from one job to another, minimizing the risk of losing coverage due to a change in employment.
•      • Pre-existing Conditions: restricts the use of pre-existing condition exclusions by insurance companies, limiting the time frame in which these exclusions can be applied.

Title II: Administrative Simplification

Title II establishes national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.  

•      • Transactions and Code Sets: Establishes standardized formats for electronic transactions, such as claims submissions and eligibility inquiries.  These are the electronic files sent to insurance companies for claims and their electronic responses back to your practice.

It also contains the Privacy Rule and Security Rule, which set standards for the protection of individuals' medical records and other personal health information. Key components include:

•      • Privacy Rule: This rule mandates that healthcare providers, insurers, and their business associates protect the privacy of individuals’ health information.
•      • Security Rule: It requires the protection of electronic protected health information (ePHI) through the implementation of various safeguards to ensure data integrity, confidentiality, and availability.
•      • Breach Notification Rule: It requires the protection of electronic protected health information (ePHI) through the implementation of various safeguards to ensure data integrity, confidentiality, and availability.

Title III: Tax-Related Health Provisions

Title III includes various tax-related provisions that relate to medical care. This title outlines tax-deductions for medical insurance, defines how long-term care services are taxed, and regulates how savings accounts like Medical Savings Accounts (MSAs) are handled. Key points include:

•      • Medical Savings Accounts (MSAs): Title III outlines rules for tax-preferred savings accounts used for medical expenses, particularly for self-employed individuals and employees of small businesses.
•      • Deductions for Health Insurance: This title also includes provisions that allow self-employed individuals to deduct health insurance premiums from their taxable income.

Title IV: Application and Enforcement of Group Health Plan Requirements

Title IV further elaborates on the insurance reform provisions introduced in Title I. It includes requirements for group health plans, ensuring that these plans comply with HIPAA’s regulations. It also addresses issues related to pre-existing conditions, continuation coverage requirements under the Consolidated Omnibus Budget Reconciliation Act (COBRA), and provides guidelines for the enforcement of these provisions. Key aspects include:

•      • Pre-existing Condition Exclusions: Title IV limits the duration and circumstances under which group health plans can impose pre-existing condition exclusions.
•      • COBRA Continuation Coverage: Provides guidelines for the continuation of health coverage under COBRA, ensuring that individuals who lose their jobs can maintain their health insurance for a certain period.

Title V: Revenue Offsets

Title V contains provisions on company-owned life insurance and the treatment of individuals who lose U.S. citizenship for income tax purposes. It also includes provisions that impact the treatment of death benefits and the tax deduction for interest on certain insurance contracts. Key points include:

•      • Company-Owned Life Insurance: This provision limits the tax deductions that companies can take on interest paid for loans against life insurance policies, reducing the potential for tax avoidance.
•      • Expatriate Tax: Title V includes rules regarding the taxation of individuals who renounce their U.S. citizenship, aiming to prevent tax avoidance by expatriates.

Conclusion

As you can see from looking at these aspects of HIPAA the majority of the HIPAA rules relate to Health Insurance Plans, other aspects apply to employers and still others apply to medical practices Many medical practices are also employers and communicate with health plans to process claims as well as provide health insurance for employees of the practice.     

Our next few articles will look at each of the parts of the HIPAA Act and how each one might apply to your practice.  Special attention will be given to the Privacy, Security, and Breach Notification Rules.  An important point to know is that a patient, a member of your workforce at your practice, or any individual or organization you share data with may file a complaint about your HIPAA practices with the Office of Civil Rights (The Office that enforces the HIPAA regulations).  We will also provide future articles on what rights the HIPAA act gives to YOU as an employee and as a patient, because at one point or another each of us has the role of patient – even doctors can patients.