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Watson Wyatt: Privacy Rules Will Affect Midsize Employers

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NU Online News Service, Aug. 28, 11:26 a.m. – Watson Wyatt Worldwide, Washington, a benefits consulting firm, says large and midsize employers should start planning now to comply with the new federal Health Insurance Portability and Accountability Act privacy rules.

The rules take effect April 14, 2003.

The rules require doctors, hospitals, clinics and health plans to protect patient health information.

Officials with the U.S. Department of Health and Human Services say HHS will probably treat employers with more than 200 employees as health plan sponsors, even if the employers buy fully insured health coverage from outside insurers, rather than self-insuring, Watson Wyatt says.

The change means that many large and midsize insurers will have to send privacy notices to employees and get authorization forms from employees before using some types of health information, Watson Wyatt says.

Employers should determine what status they will have under the new privacy rules and check to see that the insurers, third-party administrators and other companies that help run their health plans comply with the rules, Watson Wyatt says.

The firm also recommends that employers review the collection, storage and use of protected health information in day-to-day operations.