In 1996 the United States Congress enacted the Health Insurance Portability and Accountability Act (HIPAA) to protect the existing health coverage of individuals and their families when the individual loses a job or changes a job.

The legislation mandates the establishment of national standards for the electronic processing of health care related transaction as well as the formulation of national identifiers for health insurance providers, plans, and employers.

Furthermore, the Health Insurance Portability and Accountability Act addresses the need for both security and privacy in the handling of health related data. The overall goal of this aspect of the legislation is to improve the national health care system by promoting the widespread use of the electronic interchange of data.

The law specifically prohibits any group health plan from assessing premiums for individuals or from creating eligibility rules for the plan based on medical history, current health status, disabil ity, or genetic information, among its other provisions.

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