Toggle navigation
personal health data PHI

Navigating the Challenges of Protecting Employee PHI

Health information is a treasure trove of personal details, and its protection is paramount in an increasingly digital world. A recent study by Michigan State University and Johns Hopkins University uncovered a startling reality: the greatest threat to the security of personal health information (PHI) isn't sophisticated hackers, but rather the inadvertent slip-ups by those authorized to handle it. 

This insight is crucial for employers, especially those managing Health Reimbursement Arrangements (HRAs). In the realm of HRAs, the safeguarding of PHI becomes not just a legal obligation but a cornerstone of trust between employer and employee.

Understanding Protected Health Information (PHI)

Protected health information (PHI) is a term that encapsulates a wide range of personal and sensitive data. Defined under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), it includes demographic details, medical histories, laboratory results, and other data that healthcare professionals use to identify individuals and provide care. This information, whether stored physically or electronically, is subject to stringent federal protections.

PHI is not limited to medical records alone. It also encompasses insurance information, mental health conditions, and other personal details like email addresses, social security numbers, and even full-face photographs. Under HIPAA, this information must be handled with the utmost care to ensure patient privacy and confidentiality. The act lays out clear guidelines for its protection, mandating that only authorized personnel have access to this sensitive data. 

Understanding what constitutes PHI is crucial for employers, particularly those who play a role in their employees' healthcare benefits. This knowledge is the first step in ensuring compliance with HIPAA regulations and safeguarding the personal health information entrusted to them.

Exceptions to PHI under HIPAA

While HIPAA's definition of protected health information is comprehensive, there are notable exceptions. Not all personal health-related data falls under the purview of PHI as defined by HIPAA. This distinction is critical for employers and healthcare providers to understand.

For instance, health data collected by personal devices like fitness trackers or mobile health apps is not considered PHI unless it is recorded or used by a healthcare provider or insurer. Similarly, if health information is stripped of all personal identifiers, transforming it into 'de-identified' data, it no longer falls under the regulations of HIPAA. 

These exceptions highlight the importance of understanding the source and context of health information. Employers must be aware of these nuances to accurately determine their responsibilities under HIPAA and avoid unnecessary compliance burdens.

The Use of PHI in Healthcare

PHI plays a pivotal role in the healthcare system. It is primarily used by healthcare providers to track a patient's medical history, ensuring that care is informed and tailored to the individual's needs. Beyond individual patient care, PHI also contributes to broader healthcare initiatives, like studying healthcare trends and developing value-based care programs, which incentivize providers for delivering quality care.

Regulations such as HIPAA and the Health Information Technology for Economic and Clinical Health (HITECH) Act govern how PHI is collected, used, and shared. These laws ensure that PHI is handled in a manner that respects patient privacy and confidentiality. By limiting unnecessary or unauthorized access to PHI, these regulations help maintain the integrity of the healthcare system and the trust of patients in their healthcare providers.

HIPAA Compliance for Employers

Employers who are involved in managing health benefits, such as HRAs, are subject to the rules of HIPAA. This responsibility extends beyond healthcare providers and insurers to any employer that operates within these capacities. Compliance with HIPAA is not just a legal requirement but also a critical component of maintaining employee trust and safeguarding sensitive information.

The HIPAA Privacy Rule specifically outlines how and when an employer can use or disclose an individual's PHI. It's imperative for employers to understand these regulations to ensure that they are not inadvertently violating privacy rights. This includes securing written authorization for the use of PHI and implementing strict controls on how this information is handled within the organization.

Consequences of PHI Breaches

The ramifications of a PHI breach can be severe, both for the individuals affected and the organization responsible. Penalties for non-compliance with HIPAA regulations can range significantly, with fines from $100 to $50,000 per violation, based on the level of negligence involved. In extreme cases, violations can lead to criminal charges, resulting in jail time.

Breaches can occur in various ways - from lost or stolen devices containing PHI to accidental disclosures and failure to properly dispose of documents. It's crucial for organizations to be aware of these risks and take proactive steps to prevent them. Understanding these potential pitfalls is the first step in developing a robust strategy to protect PHI and maintain compliance.

Safeguarding Employees' PHI

Ensuring the security of PHI is a multifaceted task that requires a comprehensive approach. Employers can adopt several practices to protect this sensitive information effectively. This includes establishing written privacy procedures, appointing a privacy officer to oversee compliance, and training employees on privacy rules.

Technical safeguards are also essential. Encrypting electronic health records and using password protection can significantly reduce the risk of unauthorized access. Employers should also be vigilant about using PHI only for its intended purpose and not for making employment decisions, marketing, or fundraising.

Alternatives to HRAs: Health Stipends

For employers seeking alternatives to HRAs, health stipends present a viable option. With a health stipend, employees receive a fixed sum for healthcare expenses, added to their paycheck as taxable income. This arrangement relieves employers from the responsibility of managing detailed health information, thereby minimizing the risk of PHI breaches.

In a health stipend system, employees are not required to report back on how they spend their funds, ensuring their health information remains private. This approach offers flexibility to the employee while significantly reducing the employer's burden regarding PHI management and compliance.

Ensuring PHI Security: A Vital Responsibility for Employers

Understanding and managing PHI is a critical responsibility for any employer involved in healthcare benefits. Awareness of what constitutes PHI, compliance with HIPAA regulations, and implementing appropriate safeguards are fundamental in protecting this sensitive information. While the task may seem daunting, employers don't have to navigate this landscape alone. 

Solutions like Take Command's benefits automation software, coupled with expert support, can streamline the process, ensuring both compliance and peace of mind for employers and their employees alike. As healthcare continues to evolve, staying informed and proactive in PHI management will remain an essential aspect of responsible employer practices.

Take Command excels in safeguarding Protected Health Information (PHI) through stringent encryption and access controls. Committed to HIPAA compliance, they ensure PHI security with focused employee training and regular audits, highlighting their dedication to protecting employee health data.

Need help getting started? We’re ready to talk!

Contact an HRA expert


Let's talk through your HRA questions

Fill out the form below to connect with our team and see if an HRA is a good fit.