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11 Bus. L. Today 19 (2001-2002)
Handling Employees' Health Information: HIPAA Targets the HR Department

handle is hein.journals/busiltom11 and id is 89 raw text is: BIT SPECIAL ISSUE employees' heaIth HIPAA targets the HR department By Ryan D. Meade informaHonw.1 uried deep within the Heahh Insurance Portability and Accountability Act of 1996 (HIPAA) has been a sleeping giant. The giant has now been awakened by aggressive new regulations governing how businesse-s interact with personal health infonnation, but few outside the health-care industry realize this, That will change soon. Regulations to support IIIPAA were recently made final by the Department of Health and Human Services (I IHS) amid great controversy. The rules are not only poised to radically change the delivery of health care in the United States, but will also affect how compa- nies that do business vith the health- Meade is a partner at Katten Muchin 7avis in Chicago. His e-mail is r3,an.mneadet@lnz.com. care industry organize themselves to handle the health information main- tained by their health-care custoners. Most employers will also feel HIPAA!s impact in regulating how they uS tihe health-benefit information of their employees. The tentacles of HIPAA will even reach beyond the borders of the United States if a hlahh-care company uses a foreign vendor. HIPAA was a bi-partisan attempt at health-care reform, principally focused on making it easier lir employees to carry their health insurance benefits from one employer to another, hence the portability aspect of HIPAA. However, one of the reforms HlIP lA attempted was to mandate a national system for exchanging electronic health information between health- care providers and health plans, I-tP.A.A charged HHS with the task of promulgating standard formats for these exchanges, nainly focusing on payment transactions. These standards are known within the act as administrative simplifica- tion. But the final HHS regulations are anything but simple. Along with, standardizing electronic health-infortmation exchanges (current- ly more than 400 distinct systems exist), I IIPAA also established civil and criminal penalties [or regulated entities that breach the privacy and security of the health information. HIPAA did not spell out the privacy or security stan- dards that the health-care industry would be held to, but left these rules to he worked out by HI IS if Congress didn't adopt standards by a certain date. Congress never met its deadline, thereby prompting HH5 to promulgate a series of proposed regulations. ovemberlocembere2001 Hand ing 01 , IF

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