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HIPAA v. the iPhone

HIPAA v. the iPhone

January 16, 2013

Authored by: Chris Rylands and Steven Schaffer

HHS recently included on its website some helpful information regarding security of mobile devices in video format.  While primarily directed at health care providers, the videos are still useful for health plan sponsors/administrators (and their business associates).  (The way the HIPAA rules are written suggest that the plan itself should view the videos, but we doubt the actual physical document would learn much.)  Interestingly, the videos are emblazoned with disclaimers that following the videos does not guarantee compliance with HIPAA or any other law.

It is a particularly good idea for plan sponsors/administrators to review the videos given that HHS’s Office of Civil Rights (“OCR”) recently announced a “resolution agreement” with Hospice of North Idaho (“HONI”) in which HONI agreed to pay $50,000 and made certain future compliance commitments.  The OCR investigation started due to HONI’s voluntary report of a theft of an unencrypted laptop in accordance, it appears, with the breach notification rules instituted by HITECH.  Notably, the breach involved fewer than 500 participants (which is generally considered a small breach).  Once OCR investigated, it determined that HONI (1) did not conduct the requisite security rule assessment on an on-going basis, as required by HIPAA and (2) did not implement adequate safeguards with regarding to electronic PHI.

The bottom line is that plan sponsors and administrators should conduct the requisite risk assessments, particularly where employees may have access to protected health information on their laptops,

Sixth Circuit Allows Reasonable Modifications of Retiree Health Benefits

On September 13, 2012, the Sixth Circuit in Reese v. CNH Am. LLC, 11-1359, 2012 WL 4009695 (6th Cir. Sept. 13, 2012) reiterated its 2009 ruling in the same case that an employer could unilaterally modify a retiree health plan, as long as the modifications were reasonable. The September 13th ruling was the Court’s second review of the case on appeal; the sequel to an unfolding drama.

In this case, the employer and labor union entered a collective bargaining agreement which stated the employer would provide healthcare benefits for retirees and their eligible surviving spouses. The issue was whether the lifetime healthcare benefits had vested and, if so, whether, and to what extent, the employer could modify the benefits. In 2009, the Court found that the lifetime health care benefits had vested pursuant to the collective bargaining agreement, but that the employer could modify the benefits as long as the modifications were reasonable. The Court reasoned that the collective bargaining agreement provisions on retiree health benefits had not been perceived as unalterable by the parties, since they had been altered on various occasions, such as to implement a managed health care plan and to take into account the enactment of Medicare Part D.

In 2009, the Court sent the case back to the lower court to determine if the modifications of the retiree health benefits were reasonable. The lower court incorrectly assumed that the modification had to be agreed to as part of the collective bargaining process. Comparing

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