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Employers: Final HIPAA regulations take effect July 1
By Dennis Quick
Senior Staff Writer
Final regulations for the Health Insurance Portability and Accountability Act go into effect for employers whose health plan year begins July 1.
HIPAA is designed to make it easier for employees with certain health conditions to get insurance and stay insured if they move to a different job or a lose a job. The act also includes medical privacy regulations, plus records keeping and processing standards.
The new HIPAA regulations require employers to include information about preexisting medical conditions with the health care coverage materials they provide their employees. Employees must receive the notice before July 1.
Additionally, employers must provide their employees with information about “special enrollments rights,” which apply when a person becomes an employee’s dependent through marriage, birth, adoption and when an employee’s dependent loses other health care coverage.
Also, employers must issue a Certificate of Creditable Coverage to employees if the health care provider is not responsible for doing so. The certificate establishes the length of the employee’s prior coverage and helps the employee maintain that coverage after changing jobs. The certificate must explain the person’s health coverage portability and other rights under HIPAA.
“Employers don’t have to do a lot,” says Ron Moore, state HIPAA coordinator. “All they have to do is make sure they provide the information to their employees.”
Doctors, health care companies, hospitals, health insurance companies and other health care providers carry the load of complying with HIPAA regulations. Records must be properly coded. Medical information filed electronically must be done using HIPAA formats. Computers must be updated with HIPAA security measures.
Since HIPAA was enacted in 1996, most health care entities covered under HIPAA were compliant with the privacy rule by April 2003, with smaller health care providers given until April 2004. Health care professionals claim complying with HIPAA has been time-consuming and costly.
It took the Medical University of South Carolina nearly a year to become HIPAA compliant by April 2003, according to Charleston attorney Marshall Allen.
Large health care companies have spent as much as $75 million to comply with the initial regulations and estimate that the total compliance cost to the health care industry ranges from $10 billion to a little more than $15 billion.
Employers will feel the administrative costs of HIPAA compliance if they have not already, with more expensive health care plans for their employees, experts say.
However, the July 1 regulations, considered minor, are expected to have little impact on health care costs for businesses.
Dennis Quick covers health care for the Business Journal. E-mail him at dquick@crbj.com.
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