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HR's Guide to HIPAA Compliance

Whether you're a newcomer or a seasoned professional in HR, staying ahead of the curve when it comes to HIPAA ensures not just legal safety, but trust within your organization.

September 25th, 2023


Facing a penalty that could spike up to $50,000 for a single oversight? That's the steep cost of neglecting HIPAA compliance. So, what's the connection between HIPAA law and HR, and why should it matter to you?

We live in an era where protecting personal health information has never been more crucial. Whether you're a newcomer or a seasoned professional in HR, staying ahead of the curve when it comes to HIPAA ensures not just legal safety, but trust within your organization.

After all, everyone wants to feel secure, especially when it involves their health data. Let's embark on a journey to equip you with all you need to know.

What is HIPAA?

HIPAA stands for the Health Insurance Portability and Accountability Act, which came into effect in 1996. This legislation was introduced primarily to ensure that people could maintain their health insurance between jobs.

It aims to simplify the healthcare system and ensure the security and privacy of health information. Over the years, HIPAA has grown to encompass a wide range of rules and regulations. It's not just about health insurance portability anymore.

Understanding HIPAA is vital for all employers. For businesses, HIPAA provides guidelines to ensure the safeguarding of employee health information. The law demands that organizations, especially those in the healthcare sector, take adequate precautions to protect sensitive patient data.

Who Does HIPAA Protect?

HIPAA was crafted with the individual's privacy at its core. It seeks to protect anyone who has their health information used or stored by various entities. This means the following are all shielded by HIPAA:

  • Patients at a doctor's office

  • Subscribers to a health insurance plan

  • Employees at a company that offers healthcare benefits

HIPAA privacy requirements are stringent. They require covered entities, which include healthcare providers, health plans, and healthcare clearinghouses, to limit the use and disclosure of personal health information.

These entities cannot share personal health information without individual consent. The only exceptions are for specific purposes, like treatment or billing.

Furthermore, individuals have rights over their health information. They can request and get a copy of their health records from providers. They also have the right to ask these entities to correct their records if they find errors or omissions.

HIPAA's protection also extends to conversations between doctors about patient care, information stored in health insurers' computer systems, and billing information. The law ensures that such sensitive information remains confidential, and only those who need to see it for legitimate reasons can access it.

HIPAA Law and HR: Does HIPAA Apply to Employers?

While HIPAA primarily targets healthcare providers, health plans, and healthcare clearinghouses, its reach can extend to employers in specific scenarios. If an employer offers health benefits to its employees and operates its health plan, there's a chance they might fall under HIPAA's scope.

For instance, if an HR department manages health benefits and handles health information, it must comply with HIPAA. However, employers who only have access to health information for functions like a leave of absence or workers' compensation aren't typically covered.

So, while not all employers are directly under HIPAA, those who deal with health information due to the benefits they offer must ensure they're in line with the law's requirements.

What HIPAA Laws Do Employers Need to Know?

Navigating the world of employee health information can feel like a maze. But for employers, a solid understanding of HIPAA rules is crucial. Here, we'll explore five vital rules employers must keep in mind when dealing with health data.

Privacy and Personal Health Information Rule (45 CFR §164.530)

Imagine a scenario where an employee's health data gets shared without their knowledge. It's a breach of trust and a violation of their rights. That's where this rule steps in.

It dictates that all forms of health data, whether spoken, penned down, or stored electronically, must remain under wraps. Unless the employee gives a clear nod, this information stays off-limits. So, for employers, this rule is a clear directive: keep health data private, no matter the format.

Electronic Security Rule (45 CFR §164.308)

In today's age, most of our data lives in the digital realm. But with convenience comes risks. Cyber breaches, theft, and unauthorized snooping are real threats.

Recognizing this, the Electronic Security Rule comes into play. It directs employers to safeguard any health information stored electronically. The message is clear: if you're storing health data on a computer, server, or cloud, guard it with all you've got.

Breach Notification Rule (45 CFR §§ 164.400-414)

Mistakes happen. Systems fail. But when it comes to health data, any breach can have severe implications. The Breach Notification Rule sets the path employers must follow if things go south.

If there's a leak or unauthorized access to unsecured health data, those affected need to know. In some cases, the leak might be so significant that it makes the news, or the Secretary of Health and Human Services needs a heads-up. This rule ensures transparency, making sure everyone stays in the loop when breaches occur.

Administrative Simplification Regulation (45 CFR 160, 45 CFR 162, and 45 CFR 164)

The name might sound complex, but the idea is pretty straightforward. This rule is all about making electronic transactions smooth while ensuring they're up to par with certain standards.

For employers, this means two things. First, simplify processes that involve health data. Second, even in simplicity, don't drop the ball on data privacy.

It's a balance of efficiency and responsibility.

Omnibus Rule (45 CFR § 164.308, 164.312, and 164.316)

Responsibility doesn't end with the employer alone. The Omnibus Rule broadens the horizon. It brings into the fold other parties like business partners and vendors.

Everyone involved shares the duty of securing health information. It's not just the main employer who needs to be vigilant. Every link in the chain, every partner, and every vendor has a part to play.

It's a collective drive towards a common goal: the unwavering protection of health data.

Common Violations

When it comes to HIPAA, mistakes can happen even with the best intentions. Being aware of common pitfalls can help HR teams stay compliant and avoid mishaps.

One frequent violation is the loss or theft of devices. It might sound simple, but a lost laptop or phone that contains sensitive health information can lead to a significant data breach. Keeping such devices secure and password-protected is vital.

Unsecured patient information is another prevalent issue. Sometimes, health records are accidentally left in the open or sent to the wrong person.

Lastly, inadequate employee training often leads to breaches. If staff aren't sure about the rules or don't understand the importance of HIPAA, they might unknowingly violate regulations.

HIPAA Compliance in the Workplace

Adhering to HIPAA regulations in the workplace is not just about avoiding hefty fines. It's also about creating an environment of trust. Employees need to feel that their sensitive health information is safe and won't be misused or accidentally exposed.

For businesses that fall under HIPAA's domain, setting up a clear and robust framework is crucial.

This is where a HIPAA compliance checklist can be a game-changer. It provides a step-by-step guide to ensure every rule is followed, every potential gap is addressed, and no stone is left unturned.

Firstly, maintaining the privacy of health information should be a top priority. This means securing digital records, limiting access, and ensuring any paper records are locked away safely.

Next, training is vital. Every team member, especially those in the HR department, should know the ins and outs of HIPAA. This training ensures that everyone is on the same page when it comes to safeguarding personal health data.

Lastly, regular audits can help. By checking systems and processes, employers can catch any slip-ups or potential issues before they become bigger problems.

What are the Penalties for Violating HIPAA?

The consequences are more than just a slap on the wrist. They vary based on the severity and nature of the violation.

For violations where the entity was unaware and could not have realistically avoided the breach, the fines can range from $100 to $50,000 per violation. That might sound harsh, but the law aims to stress the importance of keeping health information safe.

If the breach occurred due to reasonable cause and not willful neglect, penalties can also be as high as $50,000 per incident. It's clear that even unintentional oversights can cost a lot.

However, the most severe penalties are reserved for violations due to willful neglect. If a violation is corrected within a given time, the fine can range from $10,000 to $50,000. But if it's not addressed, the penalty is a hefty $50,000 for each violation.

The maximum penalty for all identical violations in a year can go up to $1.5 million. Moreover, the financial impact isn't the only concern. Businesses can also face criminal charges or civil lawsuits from affected parties.

Final Thoughts

No matter how experienced you are in the HR realm, the regulations and rules around HIPAA can seem like a maze. But, like any journey, it's less daunting with a trustworthy guide by your side.

Considering a seamless HR platform that aligns with your compliance needs? GoCo is renowned for its ease of use, top-tier customer support, and commitment to client success. We ensure that businesses can prioritize their teams while ensuring compliance.

Take a tour of GoCo today!

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