Health Insurance Portability and Accountability Act of 1996 (HIPPA)

Health Insurance Portability and Accountability Act of 1996 (HIPPA)

The Health Insurance Portability and Accountability Act of 1996 imposes certain requirements on insurance providers offering insurance to employers (and others) to ensure that employers have equal access to insurance for their employees, and are apprised of their rights in this regard.

The Act applies to insurance providers offering individual coverage, and group health plans and health insurance coverage offered in connection with group health plans, beginning on or after January 1, 1998. Accordingly, although the Act will have an effect on the health insurance coverage employers purchase for their employees, it does not impose requirements directly upon employers.

Essentially, the Act requires that insurance providers offer health insurance coverage to certain employers on an equal basis, and that once such coverage is made available in a defined market, an insurance provider cannot terminate the coverage in that market unless certain conditions are met. The Act also regulates the ability of health insurance providers to deny coverage renewal or modify coverage. Furthermore, insurance providers who insure small employers (those with 50 or less employees) must disclose certain information regarding the coverage offered and/or available. The Act also mandates disclosure by employers of any material change in coverage either when there is a change in coverage, or on a regular, periodic basis.

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