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Congress passed the Health Insurance Portability and Accountability Act (“HIPAA”) in 1996. HIPAA requires, among other things, that all health plans comply with certain privacy requirements. The Department of Health and Human Services has issued privacy regulations, the most recent of which was published on Aug. 14, 2002 (the “Privacy Rules”). The Privacy Rules address who can access “protected health information” about an individual. The Privacy Rules also enable individuals to determine how their protected health information is being used or disclosed. Employers who sponsor health plans must comply with detailed requirements provided in the Privacy Rules if they receive protected health information for plan administration purposes. If you have not already done so, it is time to review your health plans to determine if your plans are required to comply with the Privacy Rules and, if so, when you will have to comply. Health plans that are not considered “small health plans” (i.e., health plans that have $5 million or more in annual gross receipts) must comply with the Privacy Rules by April 14, 2003. Because of the nature of the requirements in the Privacy Rules, plan sponsors must act now to ensure that such requirements are met by the April 14 deadline. “Small health plans” have been given an additional year to comply. Plan sponsors of small health plans have until April 14, 2004 to satisfy the requirements of the Privacy Rules. However, plan sponsors should begin assessing and implementing a privacy compliance program well before the April 14, 2004 deadline approaches. Following are some common questions asked by plan administrators. HOW DO THE PRIVACY REQUIREMENTS APPLY TO HEALTH PLANS? In 1996, the Health Insurance Portability and Accountability Act (“HIPAA”) became law. It required, among other things, that either Congress enact health care privacy legislation or the Department of Health and Human Services (“DHHS”) issue health care privacy regulations. Congress failed to enact health care privacy legislation within its self-imposed deadline; therefore, DHHS issued privacy regulations, the most recent on August 14, 2002 (“Privacy Rules”). Most health plans must comply with the Privacy Rules. If you are a plan sponsor who maintains a fully-insured health plan, and you do not receive “protected health information” to perform plan administrative activities, there will be very little for you to do to comply with the Privacy Rules. Most of the requirements in the Privacy Rules will be satisfied by the insurance carrier through which you purchased your health insurance policy. If you are a plan sponsor who maintains a self-insured health plan, you are responsible for ensuring that your health plan is in compliance with the Privacy Rules, even if you delegate responsibility to the insurer or third-party administrator (“TPA”) to comply with the Privacy Rules. WHICH HEALTH PLANS ARE SUBJECT TO THE PRIVACY RULES? Fully insured and self-insured health plans must comply with the Privacy Rules. This includes medical plans, stand-alone dental plans, stand-alone vision plans, prescription drug plans, employee assistance plans, health flexible spending accounts, long-term care plans, etc.

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