SOC 2 vs. HIPAA Compliance: What’s the Difference?

So, you need a security framework for your business? Or perhaps you’re just really curious about what on earth we keep hammering on about. Nevertheless, we’re diving into HIPAA and SOC 2 once again, but this time we’re putting the two against each other to see how they compare. Any starting bets for a favorite?

Before getting into the nitty-gritty, there’s one overarching disclaimer that needs to be addressed immediately (and throughout the article) – if your organization classifies as a covered entity or a business associate, you’re subject to The HIPAA Privacy Rule. That means that there’s little wiggle room for decision-making. Why? Well, HIPAA compliance is a federal law. 

SOC 2, however, is a voluntary security framework. But that doesn’t mean that there aren’t numerous benefits of implementing each or both. Here’s what you need to know if you’d like to compare the two and see which one would best benefit your organization. 

SOC 2 vs. HIPAA Compliance Bingo

Can your business tick off three in a row? Actually, if any of the below relates to your business, it may be time to pick up what we’re putting down. Here are some general (but important) questions:

SOC 2	HIPAA
You’re a cloud-based service organization that stores or processes sensitive customer data.	Your organization deals with protected health information (PHI).
You’d like a competitive edge against other players in the market.	You’re a covered entity or business associate  and handle PHI.
Your business would benefit from reduced security risks and security oversight across the organization.	You could benefit from a security framework that improves patient/client safety culture and prevents violations.

If any of the above applies to your business, congratulations – your organization should be exploring SOC 2 or HIPAA compliance. To better understand each, here’s a closer look at SOC 2 and HIPAA and what it means for your business. 

What is SOC 2?  

A SOC 2 report is governed by AICPA‘s Trust Services Criteria (TSC) and addresses a service organization’s information security controls. In a nutshell, SOC 2 reports ensure that service organizations don’t just talk the talk but have concrete controls, processes, and systems that safeguard the way they store, process, and transmit customer data. Depending on which of the five TSCs relates to your organization, a SOC 2 report will assess a company’s IT control environment and policies.

The 5 TSCs are Security (common criteria), Availability, Confidentiality, Processing Integrity, and Privacy. Out of these five principles, the Security TSC is obligatory. 

Speaking of obligatory, let’s look at HIPAA. 

What is HIPAA? 

To understand HIPAA, you must familiarize yourself with a little (not so little) thing called protected health information (PHI). PHI includes any and all individually identifiable information related to a person’s health. This includes past, present, and future information about healthcare or payment. 

If the name didn’t give it away, we’ll state the obvious – protected health information is protected. But not just by any organization, but by federal law. This means that if any organization handles PHI physically or electronically, they are subject to The Privacy Rule. If you’re subject to the Privacy Rule, HIPAA compliance is required by law, and without it, you’re in for some pretty hefty fines (and possible criminal charges). 

Who Should be HIPAA compliant?

The Privacy Rule dictates which organizations are required by law to comply with HIPAA. These organizations fall into two categories:

• Covered Entities (CE)
• Business Associates (BA)

A common misconception is that HIPAA compliance only applies to those within the healthcare industry. However, this is far from the truth. If your business classifies as a CE or BA – tag, you’re it. 

However, for such critical compliance, there is far too much gray area regarding who classifies as a CE and who doesn’t. That’s why we straightened out the facts and pinpointed who needs to be HIPAA compliant. Understanding the criteria for classification as a CE or BA is crucial for compliance.

Who Should be SOC 2 Compliant? 

Generally, SOC 2 draws in businesses with cloud-based products who want to establish secure InfoSec policies and controls. This is mainly due to the fact that it’s either requested by a prospect or to give them a competitive advantage. However, the reality is that businesses can no longer afford to be on the defense when it comes to client data security. SOC 2 enables enterprises to establish a security culture and better identify and mitigate security threats.

The Guiding Principles: The 5 Trust Principles vs. the HIPAA Rules

SOC 2 and HIPAA each provide a framework for data security, but they have different focuses and structures which we’ll explore below.

The 5 SOC 2 Trust Services Criteria

SOC 2 is guided by the five trust services criteria (TSC) developed by the American Institute of Certified Public Accountants (AICPA), which cover the following categories: Security, Availability, Processing Integrity, Confidentiality, and Privacy.

Here’s a quick overview of what you need to know: 

Security	This principle covers InfoSec and how to safeguard data through security controls.
Availability	The availability principle tests how reliable your platform is, including client service and uptime.
Processing Integrity	This establishes the accuracy of a platform’s processing systems and the margin of errors.
Confidentiality	The confidentiality principle tests how effective the access controls are and whether the data is restricted to authorized individuals only.
Privacy	This principle guides the process in which organizations obtain, store and transfer sensitive data.

Out of the 5 TSCs, businesses can choose which principles are relevant to their business before the official SOC 2 audit. This means businesses can tailor their SOC 2 based on their specific needs. However, there’s one common criterion all organizations must follow: the Security principle. This foundational principle ensures that organizations are securing sensitive data to meet compliance requirements.

HIPAA Rules

HIPAA, on the other hand, is guided by four core rules that all work together for both regulatory compliance and healthcare data security. These four rules are not flexible or optional and are implemented in order to better protect PHI.

Here’s a quick overview of the four HIPAA rules: 

The Privacy Rule	The Privacy Rule offers strict guidelines and a quintessential example of how to protect PHI. It also discerns who needs to be compliant and who doesn’t.
The Security Rule	The Security Rule establishes set requirements and controls that an organization must implement in order to adhere to the objectives set out by the Privacy Rule. It also specifically deals with all e-PHI, which is PHI in digital form.
The Breach Notification Rule	This Rule sets out a mandatory process that organizations must follow in the case of a violation or data breach.
The Omnibus Rule	The Omnibus Rule is an addendum that dictates how covered entities and business associates should set up a Business Associate Agreement (BAA). A BAA ensures that all parties involved are aware of their responsibility and role in HIPAA compliance.

SOC 2 vs. HIPAA: Which Framework is Right for Your Business?

Now, let’s dive deeper into the some of the main differences in SOC 2 vs HIPAA, particularly in terms of their application to your business. Understanding when each framework applies is essential for knowing what steps to take next.

Flexibility vs. Mandates

SOC 2 is a flexible, voluntary framework. It’s designed to ensure that organizations actively secure their systems in a way that addresses their specific risks. SOC 2 gives businesses the freedom to customize their security measures and focuses on enhancing security while supporting market competitiveness – particularly for businesses in SaaS or tech industries.

In contrast, HIPAA is mandatory for healthcare organizations. It comes with strict regulations on how PHI is stored, accessed, and handled, and violations can result in serious consequences, including reputational damage, costly fines, and penalties. HIPAA is a rigid framework, providing defined rules and regulations that organizations must follow.

SOC 2 in Healthcare

You might be wondering, “How does SOC 2 fit into healthcare?” While HIPAA governs the legal side of healthcare data protection, SOC 2 ensures that the technical security controls meet industry best practices. Healthcare organizations, or any business handling PHI, can benefit from both frameworks to enhance their data protection measures. However, it’s important to note that SOC 2 does not replace HIPAA; it complements it.

Key Differences Between SOC 2 and HIPAA Compliance

Although SOC 2 and HIPAA share similar requirements and controls, their key differences are substantial – especially when considering the flexibility of SOC 2 and the strict requirements of HIPAA.

Here’s a quick comparison to highlight the key differences between SOC 2 and HIPAA before we explore them in greater detail below:

Aspect	SOC 2	HIPAA
Data Breaches and Violations	SOC 2 doesn’t require mandatory breach notification, but recommends security awareness training.	HIPAA mandates breach notifications, including informing affected individuals and the media in severe cases.
Purpose	SOC 2 is flexible and focuses on data security and client protection.	HIPAA regulates the handling of PHI and enforces strict guidelines.
Compliance Process	Flexible, customizable audits that vary by organization.	A rigid, law-based process with defined rules and regulations.

1. Data Breaches and Violations

HIPAA: In the event of a data breach, the HIPAA breach notification rule sets out mandatory steps that Covered Entities and Business Associates must follow. This includes notifying all individuals who were affected by the breach of PHI. In the case of more severe breaches (500 individuals or more), organizations are required by law to provide notice to the media within 60 days. Covered entities must also notify The Secretary. 

SOC 2: SOC 2 doesn’t require any mandatory rules when it comes to breach notification, although there are some recommendations through guidelines and efficient security awareness training. 

2. The Purpose

HIPAA: HIPAA specifically regulates how covered entities and business associates obtain, handle, store and transfer PHI. Its primary purpose is to protect PHI. 

SOC 2: SOC 2 is voluntary and more flexible than HIPAA and is an audit process that allows organizations to test their company’s systems, policies, and controls to ensure that it securely stores client data. 

3. The Process

HIPAA: You either abide by the law or you don’t. This means that you can’t beHIPAA ‘certified.’ Although, The Office for Civil Rights (OCR) will provide routine support to new issues affecting health care. The OCR is also responsible for investigating violations and enforcing regulations. To ensure HIPAA compliance, businesses undergo routine HIPAA self-assessments and ongoing risk management.

SOC 2: The process of SOC 2 compliance is a bit more flexible, and businesses can undergo annual audits based on the relevant TSCs. The most significant benefit of SOC 2 is that the audit will be unique to your organization and its specific security requirements. 

Key Takeaways

• SOC 2 is more flexible and voluntary, with a focus on general data security and client protection.
• HIPAA is more rigid and mandatory for healthcare organizations, with specific rules around the handling of PHI.
• SOC 2 in healthcare: While HIPAA governs the regulatory aspects, SOC 2 ensures best practice security controls, making them complementary frameworks for businesses handling health data.

How SOC 2 and HIPAA Compliance Overlap

If you’re a cloud-based product that also happens to deal with PHI, it’s important to address the overlap between SOC 2 and HIPAA. A SOC 2 attestation will ensure that your organization has the necessary security controls and policies to protect data (along with any of the five TSC that are relevant).

However, SOC 2 does not and can not substitute HIPAA compliance. Why? You may have guessed it by now, but it begs to repeat: HIPAA compliance is required by law for those subject to The Privacy Rule. However, the scope of HIPAA compliance still includes other additional (and different) rules and requirements. Although SOC 2 might overlap with a few of HIPAA’s requirements, it still won’t tick all the boxes requested by The Department of Health and Human Services (HHS). 

What are the Benefits of SOC 2 and HIPAA Compliance?

When it comes to keeping your data safe, SOC 2 and HIPAA are a top-notch security duo. They each have their own job to do, but together, they offer some pretty solid benefits.

1. Stronger Security
   SOC 2 helps you spot and fix potential security issues, while HIPAA ensures you have the right measures in place to protect personal health info (PHI). By using both, you build a tough security setup that makes it a lot harder for breaches and violations to slip through.
2. Boosted Customer and Patient Trust
   Getting compliant with both SOC 2 and HIPAA shows your clients and patients that you’re serious about data protection. This kind of dedication can seriously boost their trust and confidence in you, which is a big win in today’s competitive market.
3. Standout Advantage
   Being compliant with both SOC 2 and HIPAA can give you a real edge in the market. With data breaches becoming more common, businesses want to team up with providers who are all about security. This can open up more business opportunities and partnerships for you.
4. Smart Investment
   While the upfront costs of compliance might seem high, they can save you money over time. By sticking to SOC 2 and HIPAA standards, you avoid the hefty costs of data breaches and regulatory fines. It’s a proactive way to dodge expensive lawsuits and penalties.
5. Smoother Operations
   Combining SOC 2 and HIPAA compliance can make things run more smoothly. Aligning your security policies and procedures to meet both standards cuts down on duplicate efforts and makes compliance management easier. This streamlining can boost your overall efficiency.

In a nutshell, while SOC 2 and HIPAA have different focuses, using them together gives you a solid approach to data security and compliance. This not only strengthens your overall security posture but also makes your operations more efficient and boosts your competitive edge.

SOC 2 to HIPAA Mapping

Naturally, if you’re en route to your destination and you pass important landmarks along the way, it makes sense to grasp the opportunity and stop while you’re there.

The same principle applies to SOC 2 mapping. Simultaneously tackling both HIPAA and SOC 2 requirements can save your organization time, money, and resource allocation. It’s important to note, however, that AICPA’s SOC 2 mapping recognizes the overlap between security frameworks and highlights similar controls and policies that could benefit from multiple compliance frameworks. This ensures an effective and efficient approach toward compliance.

Streamline SOC 2 and HIPAA Compliance with Scytale

Ultimately, achieving compliance with HIPAA or SOC 2 is not a simple, quick process. However, it doesn’t have to be an overly burdensome task either. With Scytale‘s AI-powered compliance automation platform and dedicated GRC experts, you can streamline and simplify the process of attaining SOC 2 compliance, HIPAA compliance, or both, keeping you ahead of the compliance curve.

FAQs

Does SOC 2 cover HIPAA?

SOC 2 does not cover HIPAA compliance. While both frameworks focus on security and data protection, HIPAA is specifically for organizations that handle health information, while SOC 2 is a more general framework for securing sensitive data in the cloud.

What are the main differences between SOC 2 and HIPAA compliance scopes?

SOC 2 focuses on general data security for cloud-based businesses, covering the five Trust Services Criteria. In contrast, HIPAA is strictly for healthcare organizations and business associates, dealing with Protected Health Information (PHI) and including specific regulations for data storage, breach notifications, and more.