HIPAA Practice Exam 2026 – 400 Free Practice Questions to Pass the Exam

HIPAA defines a "covered entity" as an organization or individual who transmits any health information in electronic form in connection with a HIPAA transaction. The term encompasses three specific categories: health care providers, health plans, and health care clearinghouses.

Health care providers are considered covered entities if they provide services to patients and transmit health information in electronic form, such as billing and insurance claims. Health plans, which include insurance companies and managed care organizations, are also covered entities as they maintain individuals' health information and process claims. Health care clearinghouses, which serve as intermediaries that process health information, are similarly classified under the covered entities category.

Patients, however, do not qualify as covered entities under HIPAA, since the definition is restricted to organizations or individuals that handle or transmit health information in specified ways. Thus, the correct understanding of what constitutes a covered entity aligns with the inclusion of health care clearinghouses, health plans, and health care providers.