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Health Insurance Portability and Accountability Act (HIPAA) of 1996 is a federal law that created national standards to protect sensitive patient health information, known as protected health information (PHI), that is handled by certain individuals and “covered entities” subject to HIPAA law. HIPAA law generally applies to the following individuals and covered entities:

• Healthcare providers who electronically transmit health information in connection with certain transactions, including claims, benefits, referrals


• Health plans, including physical and mental health, dental, vision, and prescription drug insurers, health maintenance organizations (HMOs), government healthcare providers and insurers, long-term and end-of-life care (nursing home) providers and insurers, employer-sponsored group health plans (except employers with less than 50 employees in a group plan), church and religious health plans, and multi-employer plans


• Healthcare clearinghouse entities that process nonstandard health information they receive from another entity into a certain standard format or data


• Business associates, including persons or organizations, often who are third parties, who are using or disclosing individually PHI to perform or provide functions, activities, or services for a covered entity

The HIPAA Privacy Rule establishes national standards for the protection of certain health information that is handled by certain individuals and “covered entities" subject to HIPAA law. The Privacy Rule gives patients rights over their health information, sets limits on the uses and disclosures of protected health information, and helps ensure that health information is appropriately safeguarded.
The HIPAA Security Rule protects the privacy of individually PHI held by “covered entities” subject to HIPAA law by ensuring the appropriate administrative, physical, and technical safeguards are in place to protect the information. The Security Rule applies to electronic PHI, whether created, received, maintained, or transmitted; however, it does not apply to paper or oral communications of PHI or to non-electronic PHI.

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