News & Events

Sweeping New HIPAA Privacy/Security Compliance

Workplace Vol. 2013 No. 5

By W. Eugene Magee

gmageeHIPAA, as enacted in 1996, directed the U.S. Department of Health & Human Services (DHHS) to issue regulations requiring health plans to protect the privacy of health information and to provide reasonable and appropriate security against unauthorized uses and disclosures of health information transmitted electronically.  DHHS promulgated its HIPAA privacy regulations requiring compliance by April 14, 2003 for large health plans and by April 14, 2004 for small health plans.  The HIPAA security regulations required compliance by April 20, 2005 for large health plans and by April 20, 2006 for small health plans.

Subsequently the Genetic Information Nondiscrimination Act of 2008 (GINA) amended HIPAA regarding the privacy of genetic information, and the HITECH Act of 2009 made substantial changes to the HIPAA privacy and security provisions.  Proposed regulations to implement GINA were issued on October 7, 2009.  Interim final regulations were released by DHHS on August 24, 2009 with respect to the breach notification requirements under the HITECH Act; and, on July 14, 2010 and May 31, 2011, DHHS published more proposed regulations to implement certain other privacy and security changes made by the HITECH Act.

Then, on January 25, 2013 DHHS issued final, omnibus regulations replacing both the interim final breach notice regulation and the proposed GINA and other HITECH privacy and security regulations (“Final Rule”).  This Final Rule generally requires compliance by health plans no later than September 23, 2013 (with a limited transition period until September 23, 2014 for necessary revisions to business associate agreements existing before January 25, 2013 unless otherwise amended or modified before such later date).

So, it is now time for employers sponsoring health care plans to start taking affirmative steps to become compliant with the Final Rule by the compliance deadline.  While a substantive review of the Final Rule is well beyond the scope of this article or even this newsletter, the necessary action steps which need to be taken by employers include:

  • Reviewing existing vendor relationships with respect to group health plans:
    • To identify any business associates not having an existing business associates’ agreement and to put such agreements in place as soon as possible but not later than September 23, 2013; and
    • To make any revisions necessary to existing business associate agreements by September 23, 2014 or as part of any earlier non-HIPAA-related amendment thereof (for example:  breach notification, subcontractor requirements, compliance with the security regulations, optional provisions allocating compliance responsibilities and/or providing for indemnification, etc.).


  • Amending (or, if necessary, adopting) written breach notification procedures.
  • Updating and re-distributing the Notice of Privacy Practices regarding new or revised individual rights and changes in policies and procedures.
  • Preparing/revising documentation for new/revised individual privacy rights:
    • To implement new access right to an electronic copy of “personal health information” (PHI);
    • For authorization to use or disclose PHI for marketing purposes;
    • For restrictions of disclosures of health services paid for “out-of-pocket”;
    • For requests to transmit PHI to third-persons; and
    • For disclosures of PHI to family members of a deceased patient.


  • Updating privacy, security and breach notification policies and procedures (GINA; types of information usable for fundraising without authorization; protection of PHI of deceased individuals for at least fifty (50) years; disclosures of immunization records to schools; and possibly also including DHHS suggestions about safeguarding PHI on portable electronic devices and de-identifying PHI).
  • Training workforce with PHI access with respect to all applicable changes.

Finally, another result of the HITECH Act and Final Rule will be increased DHHS enforcement activity, since there were numerous enforcement changes increasing both the authority of DHHS and the risks for employers.  Previously, HIPAA enforcement was complaint-driven, but in the future DHHS will actively be conducting HIPAA privacy and security audits, with DHHS now being required to investigate all complaints.  HIPAA penalties were also increased and can now be as high as $50,000.00 per violation, capped at $1,500,000.00 per year for identical violations.  However, these penalties can be “stacked” during the same year for different types of violations, with the result that the maximum annual penalty can be multiples of this annual cap depending upon the number of violations and of different types of violations during the same annual period.

So, if you haven’t already, it’s time to get serious about HIPAA compliance – NOW! – not September 1st.  For advice about HIPAA compliance and other workplace policies, please contact the author of this article or any of Butler Snow’s Labor and Employment attorneys for guidance.

 Workplace is published by the Butler Snow Labor and Employment Group. This newsletter focuses on developments in areas such as policy manuals, staffing and employment contracts, compliance matters, employment litigation and labor law.