How It Works
HIPAA was passed in 1996 as an amendment to two previous laws: the Public Health Service Act (PHSA) and the Employee Retirement Income Security Act (ERISA). It ensures continuous health insurance coverage by mandating that plans may be renewed in advance from year to year, that plan holders have full access to health services and that plans are transferable between employers without loss of coverage or benefits.
Subsequent changes to HIPAA reinforced the confidentiality of patient information communicated between providers in a healthcare network. In addition, HIPAA now mandates more efficient administration among insurers and providers as part of its efforts to streamline access to services and billing. Criminal and/or civil penalties may be applied to insurers and providers found to be noncompliant with HIPAA regulations.
