Final HIPAA/HITECH Rules: Compliance Actions for Employee Benefit Plans

by Poyner Spruill LLP
Contact

The Department of Health and Human Services recently released final regulations modifying the HIPAA Privacy, Security Breach Notification and Enforcement Rules (the “Omnibus Rule”). These regulations have far-reaching effects on covered entities, business associates and subcontractors, including employer-sponsored group health plans. This article focuses on the impact of the Omnibus Rule on group health plans, including medical plans, health care flexible spending accounts, wellness programs and employee assistance programs where individually identifiable health information may be generated or received. For a broader discussion of the Omnibus Rule, click here.

Does the Omnibus Rule apply to my company and my group health plan?

When health information that identifies the individual to whom it relates is created or received by a HIPAA covered entity, such as a group health plan (or by a plan sponsor or business associate of the covered entity), this data becomes protected health information (PHI) and is subject to HIPAA’s privacy rule. HIPAA’s security requirements apply when PHI is transmitted or maintained in electronic media, known as “electronic PHI.”
The HIPAA privacy rule allows employers who sponsor fully-insured group health plans to rely on the insurance company to comply with most of the HIPAA privacy requirements if the employer has access only to limited, summary health information. However, fiduciary obligations and practical constraints may make it difficult even for the sponsor of a fully-insured group health plan to insulate itself from the receipt of PHI. If the plan sponsor is involved in certain administrative functions, such assisting employees with filing medical claims or appeals or reimbursing health care flexible spending account claims, the plan sponsor will likely receive PHI and will be subject to HIPAA’s privacy rule. Furthermore, both self-insured and fully insured plan sponsors are subject to HIPAA’s breach notification and security provisions.
Plan sponsors should note that the Omnibus Rule expands the definition of business associate and those parties subject to HIPAA’s Privacy and Security Rules and applies HIPAA’s civil and criminal penalties directly to business associates. Under the Omnibus Rule, business associates, including subcontractors of business associates, are directly liable for compliance with the Privacy and Security Rules if they create, receive, maintain or transmit PHI on behalf of the company or the plan. Such business associates for group health plans may include:
  • Brokers;
  • Consultants;
  • Attorneys;
  • Third-party administrators; and
  • Health information organizations, e-prescribing gateways and other entities that transmit protected health information or access PHI.
  • Insurance companies, which are generally HIPAA covered entities, may also be business associates to the extent that they take on business associate functions on behalf of the plan, such as acting as a third-party administrator for a self-insured plan.

How do I comply with the Omnibus Rule?

Employee benefit plans may be required to update their notice of privacy practices (NPPs), policies, procedures and training programs to address these rule modifications. Covered entities, including employee group health plans, must have up-to-date business associate agreements in place with all vendors who meet the expanded definition of a business associate. HIPAA already required most covered entities to maintain an NPP which explained the permissible uses and disclosures of PHI. The Omnibus Rule requires that additional information be included in the NPP, including revised information regarding the plan’s use of genetic information. The Omnibus Rule requires genetic information to be treated as PHI and prohibits a plan from using or disclosing genetic information for underwriting purposes. 
The Omnibus Rule provides individuals with the right to restrict certain disclosures of PHI to health plans. If requested by the individual, a covered entity, such as a medical provider, must restrict disclosures of PHI to the health plan if the PHI pertains solely to an item or service for which the individual (or a party other than the health plan) has paid the provider for in full.
The Omnibus Rule confirms that individuals have a right to request copies of their PHI in any form they choose, provided the PHI is in a readily producible format. Requests for PHI must be addressed within 30 days, with a one-time 30 day extension permitted if the individual is given notice and the reasons for the delay.
To ensure timely compliance with the Omnibus Rule, employee benefit plan sponsors and their attorneys should:
1. Identify all plans that may be subject to the Omnibus Rule, including major medical plans, wellness programs, healthcare FSAs, employee assistance programs and other programs where PHI may be generated or received;
2. Review the scope of services with vendors to determine whether business associate and subcontractor relationships exist and whether business associate agreements should be put in place;
3. Review and revise existing business associate agreements to comply with the new requirements of the Omnibus Rule;
4. Ensure that business associates execute business associate agreements with their subcontractors;
5. Review HIPAA language in health, wrap and cafeteria plan documents;
6. Revise each plan’s NPP and distribute to participants in accordance with the new requirements of the Omnibus Rule;
7. Train employees, independent contractors and contract workers to comply with the new rules;
8. Prepare the appropriate parties to comply with requests from individuals for copies of their PHI;
9. Adopt or update written breach notification procedures; and
10. Review each plan and the plan sponsor’s use of genetic information to ensure compliance with GINA and the Omnibus Rule.
The compliance deadline for these rules is September 23, 2013. Certain existing business associate agreements won’t need to be updated until September 22, 2014 provided they are not modified or renewed prior to that date. In the meantime, health plan sponsors should review their HIPAA compliance and take the steps necessary to update their policies, procedures and documents.

Written by:

Poyner Spruill LLP
Contact
more
less

Poyner Spruill LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.