Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Law, Transactions, & Risk Management
  • HR, Employment, Labor, & Discrimination

Health Insurance Portability and Accountability Act (HIPAA) - Explained

What are the Insurance Protections Under HIPAA?

Written by Jason Gordon

Updated at September 25th, 2021

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is the The Health Insurance Portability Accountability Act of 1996?How Does HIPAA Work?Discussion QuestionPractice QuestionAcademic Research

What is the The Health Insurance Portability Accountability Act of 1996?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a primary law protecting the rights of employees with regard to obtaining and continuing health insurance coverage. Specifically, HIPAA prohibits group health plans and health insurance providers from discriminating against employees based upon certain factors. 

Next Article: Worker's Compensation Laws Back to: EMPLOYMENT LAWS

How Does HIPAA Work?

A common practice when an individual applies for health insurance coverage is to examine the individuals medical history for prior health conditions. 

The insurance provider will often limit coverage for pre-existing ailments and injuries. This situation becomes a major issue for someone who loses employer-provided, health insurance coverage when leaving her current employment. 

HIPAA seeks to remedy this situation by granting an employee who leaves one job the ability to continue her same level of health coverage under a subsequent health plan without being excluded for pre-existing conditions. 

The key requirement is that an individual must never have a considerable break in insurance coverage between canceling one plan and beginning another. If an individual has a break in coverage, the insurer can exclude pre-existing conditions present during the previous 12 months (18 months if a late enrollee in the new plan). 

For the above-stated reason, individuals losing their employer-provided health coverage must purchase interim insurance to continue coverage during the interim. Coverage is generally available pursuant to the Consolidated Omnibus Budget Reconciliation Act. 

If the employee maintains coverage, a subsequent insurer cannot exclude or limit coverage of an individual because of health status, medical condition or history, genetic information, or disability.

Note: The insurer can, however, charge more for the entire plan which is paid for by the group of employees. Small businesses may be disadvantaged by insurer practices, as they will charge higher rates for the small group policy due to the increased risk of loss by one group member becoming sick.

Related Topics

  • What are the major employment laws?
  • What are the taxation requirements imposed upon employers?
  • What is the Fair Labor Standards Act (FLSA)?
  • Family Medical Leave Act (FMLA)?
  • Worker Adjustment and Retraining Act (WARN Act)?
  • Occupational Safety and Health Act (OSHA)?
  • Employee Retirement Income Security Act (ERISA)?
  • Consolidated Omnibus Budget Reconciliation Act (COBRA)?
  • Health Insurance Portability and Accountability Act (HIPAA)
  • Workers Compensation Laws?
  • Employment Verification Laws?
  • Workplace Privacy Laws?

Discussion Question

How do you feel about Congress's regulation of insurance companies? Should insurers be required to cover employees with pre-existing conditions if they become a member of a group plan? Why or why not? Do you think these provisions offer sufficient protections to employees or are they too strenuous on insurers? Why?

Practice Question

Ellen is an employee of ABC Corp. She purchases her health insurance through an employer-sponsored plan. She is considering changing jobs to work for 123 Corp. She previously had a heart attack and is worried about losing health coverage for this condition if she changes employment. Does HIPAA offer any protections for Ellen?

Academic Research


health insurance portability and accountability act hipaa

Was this article helpful?

Yes
No

Related Articles

  • Department of Labor - Explained
  • How to Determine if a Worker is an Employee?
  • Worker Adjustment and Retraining Act (WARN Act) - Explained
  • Background Checks - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand