HIPAA vs. GLBA: Main Differences

When it comes to protecting sensitive information, HIPAA and GLBA are two of the most important U.S. regulations—each with its own distinct rules and focus. If you handle health data or financial records, understanding HIPAA vs GLBA isn’t just a good idea—it’s essential for compliance, reputation, and customer trust.

HIPAA is designed to safeguard protected health information (PHI) in the healthcare industry, while GLBA focuses on protecting nonpublic personal information (NPI) handled by financial institutions. Though both aim to keep personal data safe, the details—like what data is covered, who must comply, and how incidents are reported—differ significantly between the two laws.

In this guide, we’ll break down the main differences between HIPAA and GLBA, from scope and covered entities to the specific Safeguards Rule and Privacy Rule GLBA requirements. We’ll also clarify what’s expected of service providers, how each regulation approaches incident response and notifications, and what happens when these laws overlap—including the crucial concept of preemption.

Whether you’re in healthcare, finance, or provide services to either sector, knowing where HIPAA and GLBA converge—and where they don’t—can help you navigate compliance, reduce risk, and build stronger relationships through responsible data sharing and protection practices. Let’s dive into the key differences that matter most.

Scope and covered entities

The scope and covered entities under HIPAA and GLBA define not only who must comply but also the breadth of information protected and the industries impacted. Understanding these distinctions is critical to ensure proper handling of PHI and nonpublic personal information, and to identify whether your organization falls under either—or both—regulations.

HIPAA applies primarily to the healthcare sector and its business ecosystem. Covered entities under HIPAA include:

• Healthcare providers who transmit health information electronically, such as hospitals, physicians, clinics, and pharmacies.
• Health plans like insurers, company health benefit programs, and government health programs (for example, Medicare and Medicaid).
• Healthcare clearinghouses that process nonstandard health information into a standard format.
• Business associates, which are individuals or organizations that perform activities involving the use or disclosure of PHI on behalf of a covered entity. These can include billing companies, IT contractors, and cloud storage providers.

GLBA, on the other hand, sets its sights on the financial industry. Its scope is defined by the types of data handled and the financial services provided. Covered entities under GLBA include:

• Financial institutions offering products or services to consumers such as loans, investment advice, insurance, and check-cashing services.
• Businesses that receive nonpublic personal information from financial institutions, including service providers like data processors and third-party vendors.
• Affiliates and certain third parties involved in data sharing arrangements, all of whom must comply with the Safeguards Rule and Privacy Rule GLBA.

The scope of each law also affects how data sharing and incident response are managed. Under HIPAA, sharing PHI is tightly controlled and usually requires patient consent, except in specific situations like treatment or emergencies. GLBA mandates clear disclosures to consumers about data sharing practices and requires institutions to limit sharing of nonpublic personal information unless specific exceptions apply.

One important nuance is preemption: HIPAA sets a national baseline for PHI protection, but it does not override stronger state laws. GLBA preempts state laws only if they are inconsistent with its requirements, but, like HIPAA, allows stronger protections to remain in force. It’s essential to evaluate both federal and state requirements when building compliance programs.

Finally, both HIPAA and GLBA demand that covered entities have robust incident response plans. However, the triggers for notification and the nature of reporting obligations differ depending on the type of breach and the law that applies. Knowing your status as a covered entity or service provider under each regulation is the first step toward effective compliance and risk management.

Data types: PHI vs NPI

Understanding the distinction between PHI and NPI is fundamental when comparing HIPAA vs GLBA. Each regulation defines and protects different categories of sensitive information, shaping how organizations—whether healthcare providers or financial institutions—manage, share, and secure customer data.

Protected Health Information (PHI) under HIPAA:

• PHI includes any health-related information that can identify an individual, such as medical histories, lab results, insurance details, and even billing information.
• This data can exist in any form—electronic, paper, or oral—and is only protected if it’s held or transmitted by a HIPAA-covered entity or their service provider (business associate).
• Core identifiers like names, Social Security numbers, addresses, and dates of birth are included when linked to health data.
• HIPAA’s Privacy and Security Rules are clear: unauthorized use, disclosure, or sharing of PHI is strictly regulated to prevent misuse and ensure patient trust.

Nonpublic Personal Information (NPI) under GLBA:

• NPI covers any information provided by a consumer to a financial institution that isn’t publicly available—think account numbers, credit histories, income details, and social security numbers gathered during financial transactions.
• This scope often includes data shared with or collected by service providers on behalf of financial institutions.
• Under the Privacy Rule GLBA, institutions must clearly explain their data sharing practices and give consumers the right to opt out of certain disclosures to nonaffiliated third parties.
• The Safeguards Rule goes further, requiring robust administrative, technical, and physical safeguards to protect NPI against threats, unauthorized access, or data breaches.

Key Differences:

• PHI is specific to health information and the healthcare context, while NPI refers to personal and financial data handled by financial institutions.
• HIPAA strictly governs the confidentiality, integrity, and availability of PHI, whereas GLBA emphasizes the security and limited sharing of NPI—with a strong focus on consumer notice and consent.
• GLBA’s definitions of nonpublic personal information can sometimes overlap with HIPAA’s PHI (for example, billing data held by an insurer), but preemption rules clarify which law takes priority in mixed scenarios.

Grasping the differences between PHI and NPI not only clarifies regulatory responsibilities but also helps organizations design smarter incident response strategies and stronger safeguards—whether you’re a healthcare provider, financial institution, or a service provider supporting either industry.

Regulators and enforcement

Regulators and Enforcement play a critical role in shaping how organizations approach compliance under both HIPAA and GLBA. Knowing which government agencies enforce these laws—and how they do it—can help us understand the risks and responsibilities involved with handling PHI or nonpublic personal information.

HIPAA Enforcement:

• The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) is the primary regulator for HIPAA. They oversee compliance with both the Privacy Rule and the Security Rule.
• OCR investigates complaints, conducts compliance reviews, and can initiate audits of healthcare providers, health plans, and service providers (business associates).
• When violations are found, enforcement actions may include resolution agreements, corrective action plans, and substantial monetary penalties based on the severity and nature of the noncompliance.
• In cases of willful neglect, criminal charges may also be referred to the Department of Justice.

GLBA Enforcement:

• The Federal Trade Commission (FTC) is the chief enforcement agency for most non-bank financial institutions under GLBA. However, other federal banking agencies—like the Office of the Comptroller of the Currency (OCC), Federal Reserve, and FDIC—enforce GLBA for banks and affiliated institutions.
• GLBA enforcement focuses on compliance with both the Privacy Rule (regulating how nonpublic personal information is shared) and the Safeguards Rule (requiring robust information security programs).
• Regulators have the authority to conduct examinations, request documentation, and review incident response processes, especially after a data breach or failure to protect sensitive client data.
• Violations can result in civil penalties, injunctions, and requirements to implement new safeguards. In severe cases, criminal prosecution is possible for knowing and willful violations.

Key Differences in Enforcement Approaches:

• HIPAA enforcement is highly focused on PHI and covers both direct entities and their business associates. Investigations often follow complaints, breach reports, or random audits.
• GLBA covers a broader range of financial institutions and their affiliates, with a strong emphasis on organizational policies and data sharing practices. Regulators focus on preventative controls and how organizations manage service provider risks.
• Unlike HIPAA, which is preempted by stricter state laws, GLBA’s preemption clause allows states to enforce stricter privacy protections for financial data, adding another layer of complexity for compliance.
• Both frameworks demand clear incident response plans, but their reporting requirements and timelines differ—HIPAA specifies breach notification rules, while GLBA emphasizes risk assessment and prompt mitigation.

Understanding the regulators and enforcement mechanisms for HIPAA vs GLBA is crucial. Not only does it affect how your organization must protect PHI or nonpublic personal information, but it also shapes your approach to audits, breach response, and ongoing compliance management. Staying proactive and maintaining open communication with regulators can help us build a culture of trust and accountability—no matter which regulation applies.

Privacy and security requirements

Privacy and security requirements under HIPAA and GLBA define the standards each industry must meet to keep sensitive data safe from unauthorized access, misuse, and breaches. Let’s break down how these frameworks operate, what they protect, and what organizations need to do to comply.

HIPAA’s requirements revolve around safeguarding protected health information (PHI). Covered entities and their business associates must implement a wide range of physical, technical, and administrative safeguards. These requirements specifically address:

• Access controls: Ensuring only authorized individuals can view or handle PHI.
• Audit controls: Keeping logs of who accessed data and when, for traceability and accountability.
• Transmission security: Encrypting data shared electronically to prevent interception during data sharing with service providers.
• Incident response: Establishing protocols for responding to suspected or confirmed breaches involving PHI, including notification procedures.
• Preemption: HIPAA’s federal standards override (preempt) less stringent state laws, though states can enact stricter privacy protections.

GLBA’s requirements center on the privacy and security of nonpublic personal information handled by financial institutions. The law is structured around two main rules: the Privacy Rule (GLBA) and the Safeguards Rule.

• Privacy Rule GLBA: Mandates clear consumer notices about data collection and sharing practices, with options for customers to opt out of certain data sharing with nonaffiliated third parties.
• Safeguards Rule: Requires institutions to develop, implement, and maintain a comprehensive information security program that includes risk assessment, employee training, and oversight of service providers handling customer information.
• Data sharing limitations: Financial institutions must restrict the sharing of nonpublic personal information except as permitted by law, and must ensure third-party service providers protect such information.
• Incident response: GLBA expects rapid detection and response to security incidents, including notification of affected individuals and potential regulatory reporting, especially when nonpublic personal information is at risk.
• Preemption: GLBA sets a federal baseline, but does not preempt stricter state privacy laws, so financial institutions may need to comply with both federal and state requirements.

The main takeaway in the HIPAA vs GLBA landscape is that both frameworks require robust privacy and security programs—but they differ in scope, terminology, and the specifics of what needs protecting. HIPAA zeroes in on PHI in healthcare settings, while GLBA targets nonpublic personal information within financial institutions. Both demand rigorous controls, careful data sharing, strong incident response plans, and clear procedures for working with service providers. For anyone handling sensitive information, understanding these nuances is key to maintaining trust and compliance.

Service provider obligations

Service providers play a critical role in the compliance landscape under both HIPAA and GLBA. While both regulations mandate careful handling of sensitive data by external partners, their requirements differ in scope, obligations, and the nature of oversight expected from primary organizations. Understanding these differences is essential for anyone managing third-party relationships involving PHI or nonpublic personal information.

Under HIPAA, service providers are referred to as “business associates.” These are entities or individuals who perform functions for or on behalf of a covered entity—such as a hospital or health plan—that involve the use or disclosure of PHI. HIPAA requires:

• Business Associate Agreements (BAAs): Covered entities must have formal contracts with service providers, spelling out specific obligations for safeguarding PHI, reporting data breaches, and limiting further data sharing.
• Direct Liability: Business associates are directly responsible for compliance. They must implement their own security measures and are subject to enforcement actions for non-compliance or breaches.
• Incident Response: Service providers must promptly notify the covered entity of any unauthorized use or disclosure of PHI, enabling transparent and timely incident response.

GLBA refers to these external partners as “service providers,” and the obligations are framed by the Safeguards Rule. Financial institutions must ensure that any third party with access to customers’ nonpublic personal information upholds robust security standards. Key requirements include:

• Due Diligence and Oversight: Financial institutions are responsible for conducting due diligence before engaging service providers—evaluating their ability to protect sensitive data in line with GLBA requirements.
• Contractual Safeguards: Written contracts must obligate service providers to implement administrative, technical, and physical safeguards. This ensures customer information is protected against threats and unauthorized access.
• Ongoing Monitoring: The Safeguards Rule expects continuous oversight, requiring financial institutions to monitor service provider performance and adjust contracts or practices as risks evolve.
• Incident Response: Service providers must have processes to detect, respond to, and report security incidents involving nonpublic personal information back to the financial institution.

Preemption and enforcement also vary under HIPAA vs GLBA. HIPAA’s rules preempt weaker state privacy laws but allow for stricter state regulations to apply. GLBA sets a federal baseline, but state laws may impose additional service provider requirements regarding data sharing and breach notification. Both laws emphasize the importance of strong contracts and regular risk assessments, but HIPAA tends to be more prescriptive with its standardized agreements, while GLBA offers flexibility based on the risk profile of the service provider relationship.

In summary, whether you are working with PHI in healthcare or nonpublic personal information in financial services, partnering with any external service provider means taking on new compliance responsibilities. Clear agreements, diligent oversight, and a strong incident response plan are essential to maintaining compliance—and customer trust—under both HIPAA and GLBA.

Incident response and notifications

Incident response and notifications are critical components for both healthcare and financial organizations, but the requirements under HIPAA vs GLBA differ in meaningful ways. If you’re responsible for safeguarding PHI or nonpublic personal information, knowing how to act in the event of a breach is essential for maintaining compliance and trust.

HIPAA establishes clear obligations when a breach of PHI occurs. Covered entities and their business associates must follow the HIPAA Breach Notification Rule, which requires:

• Prompt assessment of any incident involving the unauthorized access, use, or disclosure of PHI.
• Risk analysis to determine the likelihood that PHI has been compromised.
• Notification to affected individuals without unreasonable delay—and no later than 60 days after discovery.
• Notice to the U.S. Department of Health & Human Services (HHS). The timeline depends on the number of individuals affected.
• Notification to the media if the breach impacts more than 500 residents of a state or jurisdiction.

Under HIPAA, your incident response plan must be documented and regularly tested. These steps are designed to minimize harm and ensure that anyone whose PHI is at risk is informed as quickly as possible.

GLBA takes a different approach, shaped largely by the Safeguards Rule. Financial institutions are required to develop and maintain an incident response program for unauthorized access to or use of customer information—including nonpublic personal information. The rule emphasizes:

• Detecting, responding to, and recovering from security incidents affecting customer information.
• Timely notification to affected customers “as soon as possible” if misuse of information is likely.
• Coordination with service providers to ensure they report incidents promptly and follow your institution’s response procedures.
• Documentation of actions taken and lessons learned to strengthen future security and response efforts.

The GLBA does not specify exact deadlines or federal notification requirements for regulators, but some states impose additional obligations. As a result, the landscape for financial institutions can be more complex, especially for organizations operating nationwide.

One key difference in HIPAA vs GLBA incident response is preemption. HIPAA’s federal rules preempt less stringent state laws, while GLBA’s requirements often work alongside state-level notification statutes. This means financial institutions may need to comply with both GLBA and state-specific rules when handling a breach.

Whether you manage health data or financial records, having a tailored incident response plan is crucial. Regular training, clear roles, and effective communication with service providers improve your ability to contain breaches and meet notification obligations—protecting both your customers and your organization.

Overlap scenarios and preemption

Understanding where HIPAA and GLBA overlap—and how preemption works—is critical for organizations that interact with both health and financial information. In today’s interconnected business landscape, it’s not uncommon for entities to fall under the scope of both laws, especially when offering services to healthcare organizations and financial institutions simultaneously.

Overlap scenarios typically arise when a single entity manages multiple types of sensitive data. For example, consider a health insurance company that also offers financial products, or a third-party service provider handling both patient billing (PHI) and consumer lending (nonpublic personal information). In these scenarios, organizations must address both HIPAA’s requirements for PHI and GLBA’s rules around customer information.

• Service providers—like IT firms, payment processors, or data storage vendors—may work with both healthcare and financial clients. When handling data on behalf of each, they must determine which regulations apply and align their security and privacy policies accordingly.
• Data sharing between entities can trigger dual compliance. For instance, if a hospital partners with a financial institution to offer patient financing, both PHI and nonpublic personal information might be exchanged, requiring compliance with HIPAA’s Privacy and Security Rules and GLBA’s Safeguards Rule and Privacy Rule GLBA.
• Incident response planning is another area where overlap matters. If there’s a data breach affecting both health and financial data, organizations need a response plan that meets the notification, mitigation, and documentation standards of both HIPAA and GLBA.

Preemption determines which law takes priority when requirements conflict. In general, HIPAA’s rules preempt state laws unless a state law is stricter regarding PHI protection. GLBA, on the other hand, does not preempt stronger state financial privacy laws. However, when both HIPAA and GLBA might apply, organizations must apply the law that offers the strongest safeguards for the data in question.

To stay compliant, organizations should:

• Map all types of data they process—distinguishing between PHI (protected health information) and nonpublic personal information.
• Review all relationships with service providers to ensure contracts require compliance with both HIPAA and GLBA, when applicable.
• Implement policies for data sharing that meet the strictest applicable rule—often a combination of both HIPAA’s and GLBA’s requirements.
• Build robust incident response protocols that satisfy the notification timelines and remediation steps mandated by each regulation.

In summary, there is no “one size fits all” solution for HIPAA vs GLBA overlap. By understanding where obligations intersect, especially regarding preemption and dual regulation, we can confidently protect sensitive information—no matter which law is in play.

In summary, HIPAA and GLBA share the same core mission: to protect individuals’ most sensitive data—but they do so in different domains, with distinct rules and approaches. HIPAA is all about securing PHI in healthcare, while GLBA governs how financial institutions manage nonpublic personal information. Both laws outline strict responsibilities for organizations and their service providers, with the Safeguards Rule and Privacy Rule GLBA setting the standards for security and privacy practices.

Preemption can create complexities where state and federal requirements overlap, so always verify which law takes precedence in your specific scenario. Data sharing and incident response obligations also differ: HIPAA has explicit requirements for breaches of PHI, while GLBA mandates incident response for unauthorized access to customer information. These nuances mean that if you operate in both healthcare and financial services—or partner with organizations that do—you’ll need policies aligned to both regulations.

By understanding the main differences in the HIPAA vs GLBA landscape and applying the right controls, we can not only avoid costly penalties but also build greater trust with our clients, patients, and partners. Staying proactive with compliance isn’t just about checking boxes—it’s about respecting the privacy and security of everyone whose data we manage.

FAQs

Which law applies to health insurers or HSAs?

Health insurers and Health Savings Accounts (HSAs) fall primarily under the protections of the Health Insurance Portability and Accountability Act (HIPAA). HIPAA covers health plans, which include health insurers and HSAs that administer or manage healthcare benefits. This means any data they handle that qualifies as Protected Health Information (PHI) must be safeguarded according to HIPAA’s strict privacy and security rules.

While GLBA applies to financial institutions and focuses on nonpublic personal information (NPI) with rules like the Safeguards Rule and Privacy Rule GLBA, it generally does not apply to health insurers or HSAs when they are managing health information. HIPAA takes preemption over GLBA in this context, meaning HIPAA’s standards are the ones that must be followed.

If a health insurer or HSA acts as a service provider to a financial institution in a non-healthcare context—such as offering investment services—then GLBA may also be relevant. However, for healthcare-related data, HIPAA is the governing law. Both laws strongly restrict data sharing and require clear incident response plans, but for health insurers and HSAs, HIPAA is your main compliance concern.

Can an organization be subject to both?

Yes, it’s entirely possible for an organization to be subject to both HIPAA and GLBA. This typically happens when a business operates across both healthcare and financial sectors, such as a health insurance company that provides insurance products (falling under HIPAA for PHI) and offers financial services like lending or investment advice (falling under GLBA for nonpublic personal information).

In these cases, the organization must carefully comply with the Safeguards Rule and Privacy Rule GLBA to protect customer financial data, while also meeting HIPAA’s strict requirements for protecting health information. If the organization relies on a service provider for processing or storing sensitive data, it must ensure that provider also meets both sets of legal obligations.

Preemption is an important consideration: if HIPAA offers stronger protections than GLBA in a specific situation, or vice versa, the stricter rule applies. For data sharing and incident response, organizations need robust policies to respect the boundaries and requirements of both laws, ensuring that any breach or unauthorized disclosure is handled in compliance with both sets of regulations.

Ultimately, being subject to both HIPAA and GLBA means organizations must take a comprehensive approach to data governance, regularly reviewing their policies and training staff to avoid compliance gaps and protect all forms of sensitive information.

How do BAAs compare to GLBA contracts?

Business Associate Agreements (BAAs) under HIPAA and service provider contracts under GLBA serve similar core purposes—ensuring that third parties protect sensitive data—but they differ in their scope and requirements. A HIPAA BAA is a formal contract between a covered entity and a business associate that handles Protected Health Information (PHI). This agreement spells out exactly how PHI must be safeguarded, how data sharing is handled, and what steps each party must take in the event of an incident response or breach. BAAs are highly specific, reflecting HIPAA’s strict standards for health data privacy and security.

GLBA contracts, often called service provider agreements, focus on the protection of nonpublic personal information within the financial sector. These contracts require financial institutions to ensure their third-party service providers implement safeguards consistent with the Safeguards Rule and Privacy Rule GLBA. The emphasis is on maintaining administrative, technical, and physical security measures to protect customer information, but the exact terms are generally less prescriptive than HIPAA’s BAAs.

A key difference lies in preemption and enforcement: HIPAA’s BAAs are federally mandated and preempt less stringent state laws, ensuring uniformity. In contrast, GLBA contracts must also account for state-level requirements, which can complicate compliance. Both contracts require clear incident response processes and limit data sharing, but the regulatory focus—health versus financial data—shapes their content.

In short, while both types of agreements are critical for regulatory compliance and data protection, BAAs are more rigid and healthcare-specific, whereas GLBA service provider contracts are broader and tailored to financial institutions. Understanding these distinctions helps organizations navigate HIPAA vs GLBA compliance effectively.

Does GLBA cover health data in fintech apps?

No, the Gramm-Leach-Bliley Act (GLBA) generally does not cover health data in fintech apps, unless that health information is collected or used as part of providing a financial product or service. GLBA is designed to protect nonpublic personal information (NPI) handled by financial institutions, focusing on data like Social Security numbers, bank account information, and transaction records. The act’s Privacy Rule and Safeguards Rule require covered organizations and their service providers to secure customer financial information, but not health data unless it is directly tied to financial activities.

If a fintech app collects health information solely for health tracking or wellness purposes, that data isn't protected under GLBA. However, if the app collects health data as part of a service related to loans, insurance, or other financial products, some of that information might be considered NPI and receive GLBA protection. For traditional protected health information (PHI), HIPAA—not GLBA—would apply, but only if the organization qualifies as a covered entity or business associate under HIPAA.

Preemption is another factor to consider. HIPAA regulations generally preempt state laws unless those laws are more stringent, but GLBA only supplements privacy protections for financial data and does not override HIPAA protections for health data. So, when it comes to data sharing, incident response, or privacy enforcement, fintech apps must evaluate which regulation is applicable based on the type of data and the nature of their services.