Which is Better for Employees: GDPR or HIPAA Compliance? 

The increased digitalization and data breaches make the protection of sensitive data more critical and urgent. Data breaches are costly, running into millions of dollars.

And an employee risk can expose you to more cyber threats and non-compliance costs. Since 1996, HIPAA has been enforcing the protection of patient health information within the US. 

But, GDPR is taking data protection to the next level. It applies to the EU, US, and around the globe, provided you handle EU resident data.

If you wonder which one applies best to your employees, read along. 

In this article, you’ll learn about:-

  • GPDR and its subjects; 
  • HIPAA and its subjects; 
  • A comparison between the two compliances; 
  • A recap on what’s best for your employees. 

Let’s dive in.



Source: Pixabay

General Data Protection Regulation, GDPR, is an EU data protection and security regulation. It came into effect in May 2018 and is one of the strictest data and security compliance at the time of the writing. 

Fines for flouting its standards can run into tens of millions of Euros. 

Who is Subject to GDPR?

It obligates any organizations operating, locally or globally, that target or gather data about EU citizens. Hence, it’s not location-dependent; provided you handle EU resident data, whether health, financial, etc., you’re liable. 

Here are the entities covered under GDPR:-

  • Has operations within the EU. In such a case, the regulation protects ALL users. 
  • Companies offering products or services to EU people. It includes even entities providing free offers. 
  • Entities that evaluate and track the behavior of EU people. It applies to an entity located within or outside the EU. 


The Health Insurance Portability and Accountability Act (HIPAA) is a patient data protection regulation in the US. It has been operational since 1996 and covers several health information data like;

  • Diagnoses 
  • Test results;
  • Demographic data;
  • Prescription etc. 

Who is Subject to HIPAA?

According to HIPAA, entities that handle protected health information, PHI, are obligated to follow it. It defines the categories into two:

  • Covered entity. It refers to anyone that collects, creates, or transmits PHI as part of their operation in healthcare delivery. In short, clinics, hospitals, doctors, pharmacies, health insurance companies, etc., are covered entities. 
  • Business associate. It refers to a company or individual business partner or contractor to covered entities. But, they are under obligation to safeguard the PHI by following strict HIPAA Business Associate Agreements, BAA. The HIPAA BAA requirements detail technical, physical, and administrative checks for PHI security. Also, it documents permissible and impermissible use of patient information between HIPAA subjects. 

Hence, HIPAA covers healthcare facilities, insurance companies, and business partners that interact with the PHI. 

How GDPR & HIPAA Affects Employees 


Source: Maxpixel 

The GDPR upholds that you must have employee consent before processing their personal information. Under GDPR, an EU resident employee has the right to:-

  • Expunge or delete data you have on them. 
  • Stop the processing of their employee data. 
  • Obtain and use their personal information for their uses. 

As an employer, you must get consent from your employees before using their data. Therefore, employees must have full transparency on their data. For example, you must inform employees to transfer their data outside the EU. 

HIPAA also takes a similar stance but on a narrow scope. HIPAA bars sharing of staff health information with third parties, such as employers or subcontractors, without the employee’s agreement.

All previous, present, and future employee health-related data is protected under HIPAA laws. Hence, HIPAA is concerned with only the health information data of employees. 

But, GDPR has a broad scope, the whole spectrum of personal data. 

Here’s how the two compare:

GDPR vs. HIPAA Compliance

Key AttributeGDPRHIPAA
ScopeSet standards and enforce compliance to all data controllers and processors within its scope. Its standards apply to all covered entities alongside their business associates.
Consent Employees must provide explicit consent for the processing of personal health data. 
But, there are some exceptions as enlisted in Article 9 of the EU GDPR.
The individual employee has no say in the disclosure of their health information. 
Covered entities can use or disclose it provided it is for “treatment purpose.”
Type of data protectedCovers any sensitive personal data. 
It has a broad definition that touches any personally identifiable information, PII.
It includes health alongside political affiliations, genetic data, ethnicity, etc. 
It has a narrow definition.
Covers protected health information, any medical data that can identify a person. 
Right to data deletion & erasureEmployees have the right to delete their data or be forgotten if they request so. No such right is granted in HIPAA.
Data breach protocolsNotification about the data breach should reach the supervising authority within 72 hours. 
You should also notify other affected parties and individuals. 
You should limit PHI disclosure under HIPAA Privacy Rule. 
Notify all affected covered entities and individuals. If it affects more than 500, you must notify the Health Department. 
Cost of non-compliance Non-compliance can attract up to 4% of the negligent company’s annual revenue.
Or, $20 million, whatever is higher. 
Fines can go up to $1.5 million annually. 
Additionally, you may face criminal charges and jail time.

From the table, the primary key difference between the standards is around scope, type of data covered, consent, and cost of non-compliance. 

GDPR covers any sensitive personal data and applies to entities within or outside EU borders. Employees must consent before third parties use their data, and non-compliance costs are hefty and high.

On the other hand, HIPAA strictly covers PHI and the entities that interact with it. Fines are not as hefty as in GDPR, but you can face criminal charges and jail time. 

Final Thoughts 

Employees enjoy broad data protection and security under GDPR than HIPAA. Compared to HIPAA, employees have complete control of personal data, including health data under GDPR. 

However, it doesn’t mean you can forego one standard for another. 

Any global organization must comply with both regulations as part of its risk management strategy. But, having HIPAA in place makes it easier to implement GDPR. Strive for both and ensure your employees are well trained in compliance to reduce risk exposure. 

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