Illinois HIPAA Health Insurance Plans – What You Need to Know About the IL HIPAA Regulations


The Illinois HIPAA health insurance laws are designed to protect the health care rights of all Illinois residents and prevent “job lock”. If one is eligible for an IL HIPAA health insurance plan then the plan will be issued on a guaranteed issue basis and all pre-existing conditions will be covered immediately from day one.

The state of Illinois is one of the most important ones in the whole continental United States. It is home to 12,831,970 people and its population has increased by 3.3% since the year 2000. All this changes have led to regulation from the Federal Government, specifically Health care regulations. The state of Illinois like many others, offers low cost health insurance for many people, however there are many more that cannot be covered because they are non eligible or they simply think that the type of state funded care is not comparable to one that they can buy by them.

In August 26, 1996 the Federal government passed the Health Insurance Portability and Accountability Act (HIPAA) that changed the health care insurance company world drastically. The act calls for insurance companies to improve efficiency in the health care system delivery by standardizing electronic data interchange and to protect confidentiality and security of health care data through setting and enforcing standards.

While one of the most important aspects of the HIPAA laws to remember if you are an Illinois resident looking for health insurance (or really a resident of any of the 50 states since HIPAA is a Federal law) is that HIPAA allows for guaranteed issue coverage if one meets certain criteria. Speak with a qualified health insurance agent or financial planner for more details on the specific HIPAA requirements.

Complying with all requirements of this law will require providers and all entities within the health care industry to make significant changes to their computer information systems, business practices and procedures. If companies did not comply with the regulations they would be subject to heavy fines up to $25,000 a year! The deadlines for this law were divided into the electronic standards (October 26, 2002) and the privacy standards (April 14, 2003).

Within the state of Illinois the same provisions under federal law apply. The state of Illinois published new rules that would ensure standardization of electronic patient health, administrative and financial data, and unique health identifiers for individuals, employers, health plans and health care providers, and protecting security standards for individual’s intimate information. The HIPAA’s regulations can be viewed as an “administrative simplification” which is composed of four parts.

Standard for Electronic Transactions: This section out of the four is the one that mandates for computerizing the health care industry. Prior to this they would find many ways to implement and manage all their customer information. It includes health plan claims, health plan eligibility, enrollment and disenrollment, payments for premiums and claim status. An example of the electronic standard transaction would be the health care companies adopting codes such as coding systems that describe injuries and types of plans.

Unique identifiers for employers, providers and health plans: This part of the plan just makes sure they providers and employers can exchange private and valuable information with each other error free. They require employers to adopt an employer’s tax ID, or employer identification numbers. Although the plan calls for this, a final Health Plan identifier has not yet been finalized.

Security Rule: This third section of the plan provides a uniformed level of protection for information about any individual that is private and transmitted electronically. It requires entities and health care providers to ensure the confidentiality and availability of an individual’s information and to protect against any hazards or the security of such information.

Privacy Rule: The last section of the act may be the most important one for the health care industry to follow and for the customers to know. This section of the plan just makes sure that any individual’s private information is not shared unless is needed by the coverage agency, even if the information is saved in electronic format. The rule also has a basic set of national privacy standards regarding what insurance companies must do with the information and the patients. The national privacy standards include but are not limited to the following: give patients new right to access their own medical records, restrict access to medical access by other people (not the patient), provide that all patients are notified of covered entities’ privacy practices, establish criminal as well as monetary sanctions for the improper disclosure of private information and establish business associate agreements with business partners that safeguard the private information.

HIPAA regulation is one of the most important pieces of legislation regarding Health Care laws in the last decade. To the Federal Government and the state of Illinois is not only important to provide Americans with plans that can assist them with their health insurance needs, but they also want to protect Americans with their privacy and allow them to trust their health insurance entities.