How HIPAA applies to self-funded health plans and third-party administrators
Many employers are surprised to discover that sponsoring a company health plan can trigger full HIPAA compliance obligations. Even if you are not a hospital or insurance company, y our self-funded health plan may qualify as a “covered entity” under the Health Insurance Portability and Accountability Act . That can create potential legal exposure for both you, as the employer, and for your Third Party Administrator. What is a self-funded health plan? In a self-funded health plan, the employer takes on the financial risk of paying employee medical claims directly, rather than paying fixed premiums to an insurance carrier . Funds typically come from a dedicated trust or general company assets, with claims paid as they arise. Employers often choose this model for greater control over benefits design, potential cost savings (especially for larger groups), and better access to claims data for wellness initiatives. Key HIPAA trigger : Under federal rules , a group health plan, including self-...