If your startup handles healthcare data in any form - through software, services, or analytics - you’ve probably come across the term Business Associate Agreement (BAA). For health tech, digital wellness, and related industries, BAAs are not optional. They are required under HIPAA and are critical to protecting patient information.
What Is a BAA?
A Business Associate Agreement is a legally required contract under the Health Insurance Portability and Accountability Act (HIPAA). It’s used when a Business Associate (that’s you, the startup) provides services to a Covered Entity (like a hospital, health plan, or clinic) and handles Protected Health Information (PHI).
Common Startup Scenarios That Trigger a BAA
You’ll likely need a BAA if your company:
- Provides a SaaS product to a healthcare provider that stores or transmits patient data
- Processes or hosts PHI through a cloud service
- Offers billing, analytics, or back-end support to a medical clinic
Even startups with indirect access to PHI—like data aggregators or AI tools—can fall under the BAA requirement.
What’s Inside a BAA?
A typical BAA includes:
- Permitted Uses: Limits how the Business Associate can use PHI (usually only to perform services).
- Safeguards: Requires technical and administrative protections (encryption, access controls, etc.).
- Breach Notification: Outlines what happens if PHI is exposed or compromised.
- Subcontractors: Business Associates must flow down the same obligations to any vendors they use.
- Termination Rights: The Covered Entity can terminate the agreement if you violate HIPAA rules.
Common Pitfalls for Startups
- Signing a BAA without being HIPAA-compliant: Just signing the document doesn’t make you compliant. You need a full privacy and security program in place.
- Overlooking subcontractors: If you use AWS, a dev shop, or a data processor, they may also need to sign a Sub-BAA.
- Underestimating breach reporting: HIPAA has strict timelines (as short as 60 days) for notifying partners and regulators of a data breach.
Final Thoughts
If your startup works with PHI—even indirectly—you need to know your obligations under HIPAA and be ready to sign (and comply with) a BAA. We help health tech founders understand the risks, negotiate fair terms, and build scalable privacy compliance frameworks.
Frequently Asked Questions
FAQs
Who needs a Business Associate Agreement?
Any business that handles Protected Health Information (PHI) on behalf of a healthcare provider, insurer, or related entity is required to have a BAA.
Does signing a BAA make my startup HIPAA-compliant?
No. A BAA is only part of compliance. You must also implement security, privacy, and breach response programs that meet HIPAA standards.
Do subcontractors also need BAAs?
Yes. If you use vendors like cloud hosts, analytics firms, or development shops that access PHI, they may need Sub-BAAs to flow down HIPAA obligations.
What happens if we violate a BAA?
Covered Entities can terminate the agreement, and regulators can impose significant fines for HIPAA violations. Startups risk both legal penalties and reputational damage.
Don't DIY your legal anymore
Leave it to the pros.