The Health Insurance Portability and Accountability Act were enacted by the U.S. Congress in 1996. The Act is divided in three parts.
The first part is a general overview of the Act and explains how HIPAA provides protection to workers and their family members by ensuring health insurance coverage when the workers lose or change their jobs.
The second part of the Act is Administrative Simplification or AS which explains the necessity and requirements of establishing national standards for electronic health care transactions and national identifiers for insurance providers and also health insurance policies and employers. Part II of the act also addresses provisions such as security and privacy of health data. The standards explain how efficiently and effectively the nation’s healthcare system can be improved by encouraging use of electronic data interchange.
The third and last part of the Act speaks of other provisions such as Administrative Simplification, Medical Savings Accounts, and Health Insurance for Self-Employed Taxpayers etc.