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Employers must protect privacy of their workers' health information

November 23, 2010
Most partially or fully self-insured dealership health plans have $5 million or less in annual premiums. Dealers with such plans have until April 14, 2004, to comply with a U.S. Department of Health and Human Services rules that requires them to protect the privacy of any health information of employees, retirees or beneficiaries. Large plans-those with more than $5 million in annual premiums-had until April 14, 2003, to comply. Some reports indicated that self-administered plans covering 50 or fewer employees have until next year to comply. In fact, such plans are entirely exempt. (Few dealers self-administer their plans.) The rule, issued in conjunction with the Health Insurance Portability and Accountability Act of 1996, requires covered employers to develop handling procedures for protected health information. Generally, they must (1) notify employees about their privacy rights and how any information can be used; (2) designate an individual to oversee the adoption and implementation of procedures to control the use and release of such information; (3) train employees to understand those procedures; and (4) secure patient records containing such information so that they are not readily available to people who don't need them. Certain information is not covered, such as that pertaining to worker's comp or compliance with the Americans with Disabilities Act. The NADA's Legal Department suggests that dealers try to minimize or eliminate handling such information to reduce their compliance duties. Still, the rule is flexible, letting small plans with limited access to private health information adopt simple procedures. Fortunately, most dealership plans use third-party claims administrators and rarely handle such information. The NADA will draft a comprehensive guide to the rule and send it to dealers this year, well before the April 2004 compliance deadline. Until then, dealers should follow the recommendations of the health insurance companies and third-party administrators they work with.