Under HIPAA, who qualifies as a covered entity?

The correct choice indicates that healthcare providers who transmit protected health information electronically qualify as covered entities under the Health Insurance Portability and Accountability Act (HIPAA). This definition is crucial because HIPAA was designed to safeguard patient information, and it specifically identifies covered entities as those involved in the handling of protected health information (PHI).

Covered entities include healthcare providers who bill electronically for services, health plans, and healthcare clearinghouses. By being part of the health information transaction process, these providers have obligations to ensure the confidentiality, integrity, and security of patient data. This standard is essential for protecting sensitive patient information against unauthorized access and breaches.

The other options do not accurately reflect the definition of covered entities under HIPAA. Insurance companies, while they do fall under one of the categories of covered entities, do not represent the full scope of who is covered. Patients are not classified as covered entities; rather, they are the individuals whose information is being protected. Finally, saying "all businesses in the healthcare sector" is too broad; not every business in this field deals directly with PHI or engages in electronic transmission of medical information to be considered a covered entity.