The Health Insurance Portability and Accountability Act (HIPAA) is a federal law allowing anyone belonging to a group health insurance plan to purchase health insurance within a certain time period after previous coverage is lost. The law is designed to protect employees from losing health insurance due a change in employment status. It is especially important for those with long term health conditions who are afraid of losing coverage due to pre-existing condition clauses under a new insurance plan.
The Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA, Title II) require the Department of Health and Human Services to establish national standards for electronic health care transactions and national identifiers for providers, health plans, and employers. It also addresses the security and privacy of health data.
The entities required to comply with HIPAA's rules regarding disclosure of patient information include health care providers, health plans and health care clearinghouses. “Health care provider” is broadly defined to include health care facilities, licensed practitioners, and suppliers of health care services or supplies. “Health plan” includes private insurers, public health programs, HMOs, health care service contractors, Medicare + Choice organizations and insured or self-insured group health plans that have 50 or more enrollees or are administered by a third party.