Health Insurance Portability and Accountability Act of 1996 (HIPAA)

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

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a wide-ranging piece of legislation. Among other things, HIPAA:¹

• Protects a person’s ability to enroll in employer-sponsored health insurance on a guaranteed-issue basis, regardless of pre-existing conditions, as long as the person had prior continuous coverage (the Affordable Care Act greatly expanded on this, and made coverage in the individual market guaranteed issue as well).
• Protects patients’ private personal health information; the HIPAA Privacy Rule was issued by HHS to implement these provisions.² HIPAA created the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care.
• Implemented various tax changes related to health care. These included increasing the percentage of premiums that self-employed people could deduct (subsequent legislation increased this to 100% starting in 2003), and the creation of medical savings accounts (these have since been replaced by health savings accounts).