Top HIPAA Hosting Provider for Small Businesses: 2025 Guide

Businesses that process and store specific types of healthcare information in the United States are required to comply with the data security and privacy regulations established in the Health Insurance Portability and Accountability Act (HIPAA).

Many small businesses lack the in-house computing resources or data centers necessary to support a HIPAA-compliant infrastructure. The failure to maintain this regulatory compliance can result in large fines and reputational damage that is hard to overcome.

The article examines the criteria that a small business must meet to be subject to HIPAA compliance. We then discuss the details of HIPAA guidelines and their impact on a business. Finally, we investigate the HIPAA solutions available to small businesses for deploying compliant hosting solutions.

Does Your Business Need a HIPAA-Compliant Hosting Provider?

Companies that process or store Protected Health Information (PHI) are required to comply with HIPAA regulations. HIPAA defines PHI as any health-related information that can be linked to an individual. PHI includes medical records, billing details, and other personal data used when providing healthcare services. When PHI is stored and transmitted electronically, it is referred to as electronic Protected Health Information (ePHI).

Examples of PHI include health-related personal information such as a patient’s name, date of birth, and Social Security number. It also includes patient data such as lab results, prescriptions, and treatment plans. Other PHI artifacts include billing information and patient emails.

Two types of companies are required to comply with HIPAA requirements. If your small business fits into one of these categories, you must utilize a HIPAA-compliant IT infrastructure to process and store ePHI.

Covered entities (CEs)

A covered entity is typically engaged in directly providing healthcare or health insurance. HIPAA defines three different types of covered entities:

• Healthcare organizations and healthcare providers, such as doctors, clinics, and pharmacies, that transmit health data electronically;
• Health plans such as health insurance companies and HMOs;
• Healthcare clearinghouses that convert non-standard health data into standard formats to facilitate billing and claims processing.

Business associates (BAs)

A business associate is a vendor or contractor providing third-party services for or on behalf of a covered entity and has access to the CE’s PHI. Many different types of organizations may be considered BAs, including:

• Cloud service providers like Amazon Web Services (AWS), Microsoft Azure, or the Google Cloud Platform (GCP);
• Billing companies and medical coders;
• Data backup and recovery providers;
• IT support vendors with access to healthcare data;
• Electronic Health Record (EHR) providers.

All business associates are required to sign a Business Associate Agreement (BAA) with the covered entity. The BAA outlines how the BA will protect the CE’s PHI.

Organizations that are exempt from HIPAA compliance regulations include most employers, except those that operate a self-funded health plan. A company may be a hybrid entity that performs multiple functions, of which only a subset requires HIPAA compliance. An example of a hybrid entity is a university that operates an academic department not covered by HIPAA and a hospital that requires HIPAA-compliant services.

What is HIPAA Compliance?

Companies categorized as covered entities or business associates must ensure HIPAA compliance by handling PHI in a manner that incorporates the following characteristics.

It’s also important to note that modern standards require HITECH compliance, which updated HIPAA rules to address health technology and strengthen penalties for violations

• Privacy – CEs and BAs must ensure the privacy of PHI by restricting access to sensitive patient data. Specific guidelines are set in the HIPAA Privacy Rule.
• Security – Companies must protect ePHI with the administrative, physical, and technical safeguards defined in the HIPAA Security Rule.
• Breach notification – Organizations are required to notify the authorities and affected parties if a data breach involving PHI occurs.
• Documentation – Companies must maintain documentation regarding the policies and risk assessments related to handling PHI.
• Training – CEs and BAs must provide regular training to employees who work with PHI.
• Business Associate Agreements – BAAs are required to document the responsibilities of third parties in securing PHI.

The Main HIPAA Rules

Organizations must comply with the requirements of the following rules, which define their responsibilities for protecting PHI. Failure to address these rules effectively can result in HIPAA violations, which may lead to substantial penalties and fines.

HIPAA Privacy Rule

The Privacy Rule regulates the use and disclosure of PHI by CEs and BAs. It covers all forms of PHI, including written, oral, and electronic information. The rule also provides patients with specific rights to access, amend, and limit who else can view their sensitive data.

HIPAA Security Rule

The Security Rule focuses exclusively on ePHI and how organizations must protect it from unauthorized access, deletion, modification, or transmission. The rule requires companies to implement three types of safeguards to secure ePHI.

Administrative Safeguards

These are designed to manage security risks and workforce behavior. Required controls include:

• Conducting a risk analysis and managing identified vulnerabilities through a formal HIPAA risk management program;
• Assigning a security officer as the focal point for HIPAA compliance;
• Implementing role-based access controls (RBAC);
• Providing employees with security awareness training;
• Signing BAAs with vendors and subcontractors;
• Developing backup and disaster recovery plans to ensure the availability of ePHI.

Physical Safeguards

Physical protections ensure the physical security of electronic systems that store and process ePHI. The controls include:

• Limiting access to facilities that handle ePHI;
• Ensuring the security of workstations processing ePHI;
• Managing the secure disposal of devices and media containing ePHI.

Technical Safeguards

These define the technologies and policies organizations must implement to protect ePHI. The safeguards include:

• Access controls such as unique user IDs and session timeouts;
• Audit controls that log and monitor access to ePHI systems;
• Integrity controls to restrict unauthorized changes to ePHI;
• Authentication controls such as biometrics and two-factor authentication;
• Transmission controls to protect ePHI using methods such as data encryption, often using Secure Sockets Layer (SSL).

HIPAA Breach Notification Rule

The Breach Notification Rule requires CEs and BAs to notify affected individuals, the U.S. Department of Health and Human Services (HHS), and perhaps the media under certain circumstances when there is a breach of unsecured PHI.

Notices must contain a description of the breach, the type of PHI involved, and the steps individuals can take to protect themselves from identity theft.

What is HIPAA-compliant Web Hosting?

As you can see, implementing HIPAA compliance is not a trivial exercise. Many small businesses lack the technical expertise and resources necessary to comply with the stringent requirements for protecting PHI. However, healthcare organizations do not have the option of ignoring HIPAA guidelines.

HIPAA-compliant HIPAA web hosting solutions offer companies a reliable and efficient method for achieving and maintaining HIPAA compliance. Through Managed Services, companies can leverage cloud-based HIPAA compliance services rather than implement a compliant solution themselves.

Specific types of hosting services are suitable for ensuring HIPAA compliance. Customers need to work with a reputable hosting provider that offers HIPAA-compliant services. The following table outlines typical hosting options and their ability to provide HIPAA compliance services.

How to Choose the Best HIPAA Compliant Hosting for Your Business

Decision-makers must make the correct choice when seeking a HIPAA-compliant hosting solution. The decision should be influenced by the company’s technical capabilities, budget, and the amount of control they want over the hosting environment. Typically, the choice is between a dedicated server solution and cloud hosting.

Dedicated servers

Companies may choose to deploy a dedicated HIPAA-compliant server to address HIPAA compliance requirements. This option requires the customer to assume responsibility for the majority of HIPAA safeguards and requirements.

The provider must implement the physical safeguards necessary to protect the ePHI resident on the servers. Customers must address most of the administrative and technical safeguards to ensure the servers are HIPAA-compliant.

Organizations utilizing dedicated hosting need to engage a reputable provider that offers HIPAA-compliant infrastructure with robust enterprise networks. The company needs a skilled technical team to ensure all safeguards are correctly implemented and maintained.

They will be tasked with performing HIPAA compliance monitoring and promptly resolving any issues and security vulnerabilities.

Enterprise customers with experienced technical resources are well-suited for a dedicated server solution. The additional control over the environment aligns with an enterprise corporate mindset.

HIPAA-compliant cloud hosting solutions

Small businesses may find cloud hosting offers a more efficient method of meeting HIPAA compliance requirements. In this case, the managed hosting provider is responsible for implementing HIPAA safeguards to ensure the privacy and security of ePHI.

The customer can minimize their technical input into the environment, focus on their core business, and achieve true HIPAA compliance.

Potential customers should ensure that the hosting provider they choose meets the following key requirements.

• The provider must sign a BAA outlining their responsibilities and demonstrate compliance expertise. Companies should not proceed with a hosting provider that will not sign a BAA.
• All ePHI must be encrypted while in transit and at rest, ideally within a secure HIPAA vault environment.
• The provider must offer a comprehensive data protection strategy, including secure backups, disaster recovery services, and contingency plans to address emergencies
• The provider must guarantee the physical security of the hardware used for ePHI processing.
• The provider must offer HIPAA compliance support by conducting regular risk assessments to identify security vulnerabilities.
• The host should provide secure backups, disaster recovery services, and contingency plans to address emergencies.
• The provider should offer enterprise-grade security features like a Web Application Firewall (WAF), DDoS protection, and a content delivery network (CDN) to further secure and accelerate data access.

Conclusion

Small businesses can leverage the offerings of cloud providers to meet their HIPAA requirements. Dedicated servers offer more control but require additional technical skills to ensure compliance.

HIPAA-compliant cloud hosting with a reputable provider is an excellent way for a small business with limited technical resources or budget constraints to maintain HIPAA compliance.