HIPAA stands for the Health Insurance Portability and Accountability Act of 1996. Title I of HIPAA governs portability of health benefits, special enrollment rights, and non-discrimination rules. Title II, Subtitle F of HIPAA governs "Administrative Simplification." The Administrative Simplification Rules are intended to create a uniform system for processing, retaining, and securing health care information by encouraging the use of electronic technology, mandating standardization of health-related transactions, and ensuring the security and privacy of health information.

Congress delegated responsibility for developing and implementing the Administrative Simplification provisions of HIPAA to the U.S. Department of Health and Human Services ("HHS"). The Administrative Simplification Rules are actually a package of regulations, consisting of:

Although employers are not "covered entities" under the Administrative Simplification Rules for more information about "covered entities," every employer that offers health benefits or health services to its employees will be affected by the Rules. This is because the Rules directly regulate most employer group health plans and certain health care providers (which may include some employers' on-site providers).

Compliance Tip: Entities that are covered by the Administrative Simplification Rules in their core businesses (e.g., health plans, health care providers, and health care clearinghouses) must also consider their role as employers. For instance, they will need to comply with respect to the group health plans they offer their own employees.