The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
If you’re reading this article, you’re probably wondering what HIPAA is and how it can help you. In 1996, the federal government passed the Health Insurance Portability and Accountability Act (HIPAA). This law looked to protect sensitive customer information from being shared without a person’s knowledge or consent. National standards were established for electronic healthcare transactions.
Companies that work with protected health information (PHI) must have security processes to ensure they’re HIPAA compliant. This applies to anyone who provides treatment, processes payments or has other operations in healthcare, as well as their business associates who must access patient information. This helps to protect American citizens in addition to reducing the incidents of healthcare fraud.
Additionally, HIPAA allows American workers and their families to continue to receive health insurance coverage after losing or changing jobs.
What does HIPAA cover?
HIPAA is quite extensive and covers many areas. Some of the more important rules are the HIPAA Privacy Rule and the HIPAA Security Rule.
The HIPAA Privacy Rule
The HIPAA Privacy Rule was initially proposed in 1999 and approved in late 2000. This rule requires that medical records and personal health information in health plans, with healthcare clearinghouses and with healthcare providers are protected with safeguards. This applies to electronic, written and oral health information.
The HIPAA Privacy Rule also sets limits on how this private information can be used and disclosed without patient approval. A patient must give approval before their health information is shared with a third party.
Lastly, the rule also gives patients the right to obtain a copy of their health records to examine them and make requests for necessary corrections. You can also receive a report on when your health information was shared, with whom and for what reason.
The HIPAA Security Rule
The HIPAA Security Rule was proposed in 1998 and approved in early 2003. This rule protects people’s personal health information that is maintained, received, created or used by a covered entity. The rule focuses on protecting the information that’s stored or shared in electronic form. Similar to the HIPAA Privacy Rule, the Security Rule requires applicable entities to maintain reasonable security measures to protect this data.
The Security Rule is like an add-on to the Privacy Rule, requiring all applicable entities to have security measures in place that will protect private information as it’s shared or stored electronically. Within the Security Rule are clear guidelines that companies must follow to safeguard health information and remain compliant (for electronic information only)—for example, requiring authentication to log onto a private network that contains PHI.
Who has to comply with HIPAA?
All “covered entities” have to comply with the HIPAA. These entities include:
- Healthcare providers: Companies of all sizes that electronically submit health information for claims, referral authorization requests, benefit eligibility checks and more
- Health plans: Dental, vision, health, HMOs, Medicare, Medicaid, prescription drugs insurers, long-time insurers, employer-sponsored health plans, government-sponsored health plans, church-sponsored health plans and multi-employer health plans
- Healthcare clearinghouses: Usually, when processing services to a healthcare provider or a healthcare plan
- Business associates: A person or organization that needs to use individual health information within their job function, such as for billing, data analysis, processing and more
There are 12 instances in which PHI can be given out without permission. These exceptions are:
- An organization may be legally mandated to do so by statute, regulation or court orders.
- Entities may disclose PHI to public health authorities to stop the spread of disease, for information around FDA-approved products or for employers or employees when evaluating a work-related illness or injury.
- Sometimes covered entities will share PHI information of abuse, neglect or domestic violence victims with the appropriate government authorities.
- PHI may be disclosed to health oversight agencies that may be conducting authorized audits and investigations into the healthcare system or government benefit programs.
- PHI may be shared in a judicial or administrative proceeding if the request for the data came through a court or administrative tribunal, such as a response to a subpoena.
- Law enforcement officials may request PHI for law enforcement purposes under these six specific circumstances.
- Covered entities may share PHI with funeral directors, coroners or medical examiners to help them perform their legal or hired duties.
- Organizations may disclose PHI to help with the donations of cadaveric organs, eyes or tissue donations.
- PHI can be shared for research purposes under certain conditions.
- Covered entities may share PHI with appropriate sources if they believe it’s necessary to prevent or lessen a serious threat to others’ health or safety. Typically, the PHI is shared with law enforcement in these scenarios.
- Authorization to access or share PHI is not required for essential government functions, such as providing protective services for the President.
- Covered entities may share PHI for work-related injuries and illnesses if it complies with workers’ compensation laws.
How does HIPAA relate to credit reporting?
It’s important to note that the HIPAA does not prevent credit reporting. Actions related to the payment of medical bills are one reason covered entities are allowed to disclose health-related information without the individual’s authorization. This also includes disclosure to credit reporting agencies. So, if you miss payments or make late payments on your medical bills, it can be reported to the credit reporting agencies.
However, the PHI disclosures are limited to sharing the following information:
- Date of birth
- Social Security number
- Payment history
- Account number
- The name and address of the healthcare provider who made the file
Covered entities will give credit reporting agencies enough information to identify your report and add the negative payment information to your file without knowing your medical history, treatments or background.
The HIPAA needs to act in a way that doesn’t conflict with the Fair Credit Reporting Act (FRCA). This means consumers have the right for their credit reports to be private and include only accurate information. The FCRA also provides consumers with the right to dispute any false information on their credit report to have it removed.
What if HIPAA is violated?
If you’ve found out that a collector has information that violates HIPAA, you can take action. Let’s say, in an attempt to validate your debt, the collector received information about your treatment or any additional information beyond what is allowed to be shared with credit reporting agencies.
In this case, you can send a letter stating that your rights under HIPAA have been violated as you never signed a HIPAA authorization form. There is a possibility they will have to pay fines for the violation (the money would be awarded to you), and the medical debt will be removed from your credit report.
Review all medical debt on your credit reports
It’s important to understand HIPAA and your rights under this act. Like all other forms of debt, medical debt can have a significant impact on your credit. If you have late or missed medical debt payments, they show up as negative items on your report and can lower your credit score.
To avoid this situation, you should always review your medical debt on your credit reports. If the information is false, has errors or violates your HIPAA rights, you may have a case to dispute the information and have it removed from your file.
Of course, this applies to everything that appears on your credit report. Be aware of what’s on your credit reports, and check every detail. Credit reporting agencies often make errors, and you’ll be the one affected by the consequences if you miss them.
If you seek a credit repair company’s help, make sure you choose one that takes privacy and your data very seriously. There should be systems in place to protect your personal information. Lexington Law takes customer data protection very seriously—find out how we can protect you and help you with credit repair today.
Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.
Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Does Getting Joint Credit Cards Have an Impact on Both Spouses’ Credit?
While marriage can help you improve your financial situation, it does not automatically mean that you and your spouse will share a credit report. Your credit records will remain separate, and any joint accounts or joint loans that you open will appear on both of your reports. While this can be advantageous, it’s critical to remember that joint account activity can effect both of your credit scores positively or negatively, just as separate accounts do.
Users Who Are Authorized
An authorized user is a user who has been added to an existing credit account and has been granted the authority to make purchases. Authorized users are typically issued a card bearing their name, and any purchases made by them will appear on your statement. The primary distinction between an authorized user and a shared account owner is that the account’s original owner is solely responsible for debt repayment. Authorized users, on the other hand, can always opt-out of their authorized status, although the principal joint account owner cannot.
If your credit score is better than your spouse’s as an authorized user, he or she may benefit from a credit score raise upon account addition. This is contingent upon your creditor notifying the credit bureaus of permitted user activity. If your lender does report authorized users, the activity on your account may have an effect on both you and your spouse. However, some lenders report only positive authorized user information, which means that late payment or poor usage may not have a negative effect on someone else’s credit. Consult your lender to determine how authorized users on your account are treated.
Joint Credit Cards Have an Impact on Your Credit Score
Opening a joint credit account or obtaining joint financing binds both of you legally to the debt’s repayment. This is critical to remember if you divorce or separate and your spouse refuses to make payments, even if previously agreed upon. It makes no difference who is “responsible,” the shared duty will result in both partners’ credit histories being badly impacted by late payments. Regardless of changes in relationship status or divorce order, the creditor considers both parties to be liable for the debt until the account is paid in full.
Whether you’re happily married or divorced, you and your spouse may decide to open separate credit accounts. Most creditors will enable you to transfer an account that was previously joint to one of your names if both of you agree. However, if there is a debt on the account, your lender may refuse to remove your spouse’s name unless you can qualify for the same credit on your own. Depending on your financial status, qualifying for financing and credit on a single income may be tough.
While creating the majority of your accounts jointly with your spouse may make it easier to obtain financing (two salaries are preferable to one), reestablishing credit independently following a divorce or separation is not always straightforward. To make matters worse, your spouse may wind up causing significant damage to your credit rating following the separation, either intentionally or through irresponsibility – making the financial situation much more difficult.
Before you rush in and open accounts with your spouse, take some time to discuss the shared responsibility of these accounts and what you and your husband would do in the event of a worst-case situation. These types of financial discussions can be difficult, especially when you rely on items lasting a long time, but a mutual understanding and respect for each other’s credit can go a long way toward keeping your score when sharing an account.
Should you pay down debt or save for retirement?
While establishing a comprehensive, workable budget is undeniably one of the most important factors in maintaining a healthy financial life, it can also be one of the most difficult. For those who are struggling with personal debt, building a budget can be particularly challenging. When the money coming in has to stretch like a contortionist to cover expenses, it can be hard to determine where to focus — and where to trim.
Sometimes, the battle of the budget can come down to a choice between dealing with the present — and thinking about the future. When your income is running out of stretch, do you pay off your existing debt, or do you start saving for retirement? At the end of the day, the solution to that particular dilemma depends on the type of debt you have and how far you are from retiring.
If you have high-interest debt, pay it down
When considering how to allocate your budget, it’s important to understand the different kinds of debt you may have. Consumer debt can be categorized into two basic types: low-interest debt and high-interest debt, each with its own impact on your credit (and your budget).
In general, low-interest debt consists of long-term or secured loans that carry a single-digit interest rate, such as a mortgage or auto loan. Though no debt is the only real form of good debt, low-interest debt can be useful to carry. For instance, purchasing a home with a low-interest mortgage can actually save you money on housing costs if you do your homework and buy a house well within your price range.
High-interest debt, on the other hand, typically has a hefty double-digit interest rate and shorter loan terms, such as that of a credit card or payday loan. High-interest debt is the most expensive kind of debt to carry from month to month and should always be priority number one when building a budget.
To illustrate why you should focus on high-interest debt above everything else, consider a credit card carrying the average 19% APR and a $10,000 balance. If the balance goes unpaid, that high-interest credit card debt will cost $1,900 a year in interest payments alone. Now, compare that to the stock market’s average annual return of 7%, and it becomes clear that you’ll see significantly more bang for your buck by putting any extra funds into your high-interest debt instead of an investment account.
If you are having trouble paying off your high-interest debt, there may be some steps you can take to make it more manageable. For example, transferring your credit card balances from high-interest cards to ones offering an introductory 0% APR can eliminate interest payments for 12 months or more. While many of the best balance transfer cards won’t charge you an annual fee, they may charge a balance transfer fee, so do your research. You’ll also want to make sure you have a plan to pay off the new card before your introductory period ends.
Most balance transfer offers will require you to have at least fair credit, so if your credit score needs some work, you may not qualify. In this case, refinancing your high-interest debt with a personal loan that has a lower interest rate may be your best bet. Make sure to compare all of the top bad credit loans to find the best interest rate and loan terms.
If you’re nearing retirement, start to save
The closer you get to retirement age, the more important it becomes to ensure you have adequate retirement savings — and the more pressure you may feel to invest every spare penny into your retirement fund. No matter your age, however, paying off your high-interest debt should always remain the priority, as it will always provide the best rate of return (as well as likely provide a credit score boost).
Indeed, no matter how tempting it becomes, you should avoid reallocating money you’ve dedicated to paying off high-interest debt to save for retirement. Instead, the focus should be on re-evaluating your budget to find any additional savings you can. To be successful, you will need to make a strong distinction between want and need — and, perhaps, make some tough lifestyle choices.
Though simply eliminating your daily coffee drink won’t magically provide a solid retirement fund, saving a few bucks by homebrewing while also eliminating a pricey cable bill in favor of an inexpensive streaming service — or, better yet, free library rentals — can add up to big savings over the course of the year. The ideal strategy will involve overhauling every aspect of your lifestyle, combining both large and small cuts to develop a lean budget structured around your long-term goals.
Of course, while you should never allocate debt money to your retirement savings, the reverse is also true. It is almost always a horrible idea to remove money from your retirement account before you hit retirement age — for any reason. Withdrawing early means you will be stuck paying hefty fees for withdrawing money early and, depending on the type of account, you may also have to pay significant taxes.
Aim for both goals by improving income
As you take the necessary steps to pay off debt and save for retirement, you may have already stretched the budget so thin it’s practically transparent. In this case, it is time to consider ways to improve your overall income. Increasing the amount you have coming in not only provides extra savings to put toward your retirement, but may also speed up your journey to becoming debt-free.
The easiest solution may be to look for ways to increase your income through your current job; think about taking on additional shifts or overtime hours to earn some extra cash. Depending on your position — and the time you’ve been with the company — consider asking for a pay raise or promotion, as well.
If you do not have options to make more money at your day job, it may be time to find a second job. Look for opportunities that provide flexible schedules that will accommodate your regular job; many work-from-home positions, for example, can easily fit into most work schedules. Doing neighborhood odd jobs, such as babysitting and dog walking, may also provide a solid income boost without interfering with your existing job.
For some, the need to pay off debt and improve retirement savings can be more than just a source of stress — but a hidden opportunity to begin a new career adventure. Instead of being weighed down by yet more work, use the desire to better your budget as a reason to explore the profit potential of a passion or hobby. Starting a small online store, part-time consulting service, or other small business can be a great way to improve your income and your overall happiness.
While it may sound intimidating, starting a side business can be as simple as putting together a professional looking website and doing a little marketing legwork to spread the word. And no, building a website isn’t as scary — or expensive — as it seems, either. A number of the top website builders now offer simple drag-and-drop interfaces perfect for putting together a professional-looking web page in minutes (without breaking the bank).
How does a loan default affect my credit?
Nobody takes out a loan expecting to default on it. Despite their best intentions, people sometimes find themselves struggling to pay off their loans. These types of struggles happen for many reasons, including job loss, significant debt, or a medical or personal crisis.
Making late payments or having a loan fall into default can add pressure to other personal struggles. Before finding yourself in a desperate situation, understanding how a loan default can impact your credit is necessary to avoid negative consequences.
30 days late
Missing one payment can further lower your credit score. If you can pay the past due amount plus applicable late fees, you may be able to mitigate the damage to your credit, if you make all other payments as expected.
The trouble starts when you (1) miss a payment, (2) do not pay it at all, and (3) continue to miss subsequent payments. If those actions happen, the loan falls into default.
More than 30 days late
Payments that are more than 30 days past due can trigger increasingly serious consequences:
- The loan default may appear on your credit reports. It will likely lower your credit score, which most creditors and lenders use to review credit applications.
- You may receive phone calls and letters from creditors demanding payment.
- If you still do not pay, the account could be sent to collections. The debt collector seeks payment from you, sometimes using aggressive measures.
Then, the collection account can remain on your credit report for up to seven years. This action can damage your creditworthiness for future loan or credit card applications. Also, it may be a deciding factor when obtaining basic necessities, such as utilities or a mobile phone.
Other ways a default can hurt you
Hurting your credit score is reason enough to avoid a loan default. Some of the other actions creditors can take to collect payment or claim collateral are also quite serious:
- If you default on a car loan, the creditor can repossess your car.
- If you default on a mortgage, you could be forced to foreclose on your home.
- In some cases, you could be sued for payment and have a court judgment entered against you.
- You could face bankruptcy.
Any of these additional consequences can plague your credit score for years and hinder your efforts to secure your financial future.
How to avoid a loan default
Your options to avoid a loan default depend upon the type of loan you have and the nature of your personal circumstances. For example:
- For student loans, research deferment or forbearance options. Both options permit you to temporarily stop making payments or pay a lesser amount per month.
- For a mortgage, ask the lender if a loan modification is available. Changing the loan from an adjustable rate to a fixed rate, or extend the life of the loan so your monthly payments are smaller.
Generally, you can avoid a loan default by exercising common sense: buy only what you need and can afford, keep a steady job that earns enough income to cover your expenses, and keep the rest of your debts low.
Clean up your credit
The hard reality is that defaulting on a loan is unpleasant. It can negatively affect your credit profile for years. Through patience and perseverance, you can repair the damage to your credit and improve your standing over time.
Consulting with a credit repair law firm can help you address these issues and get your credit back on track. At Lexington Law, we offer a free credit report summary and consultation. Call us today at 1-855-255-0139.
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