INSURANCE 101: Health Insurance Portability and Accountability Act (HIPAA)

Enacted in 1997, the Health Insurance Portability and Accountability Act, also referred to as HIPAA, provides for the portability of group insurance between employer group insurance plans and from an employer-sponsored plan to an individual policy if the individual becomes self-employed.

HIPAA includes several common components, one of which is that a new employer must offer continual coverage to a new employee if the employee is switching from a prior employer’s coverage and was insured for at least the previous 18 months on the prior group plan.

Another component of HIPAA includes its length of coverage.  Insurance portability through HIPAA is mandated for 63 days between employment periods to allow sufficient time for an employee to switch insurance coverage. Individual insurance through self-employment is considered portable from group insurance as well.