When the Health Insurance Portability and Accountability Act of 1996 (HIPAA) went into effect last year, its impact on most small businesses (those with fewer than 50 employees) was minimal. The reason, according to R. Lucia Riddle, vice president of insurance company The Principal Financial Group in Des Moines, Iowa, is that most states had already implemented legislation reforming the small group health insurance market. But if your business isn't covered by state legislation, you're now guaranteed access to health insurance coverage for your employees.
However, under the HIPAA, small businesses that offer health insurance as a benefit are required to provide specific, written notification of rights and benefits to new hires and departing employees. Riddle suggests asking your insurance agent for assistance to be sure you're providing the proper information. Also, be alert for requirements that may arise in the future, because not all the regulations for the HIPAA have been established yet.
You shouldn't assume your insurance company will handle it, cautions Riddle. "There's liability for the employer and the carrier."