Preparing your workspace
Preparing your workspace
HIPAA is not optional if you handle PHI — it's a federal requirement. SOC 2 is the voluntary credential that wins you enterprise deals. Most healthtech companies need both.
Last verified: May 17, 2026
| Feature | SimpleAudit | HIPAA |
|---|---|---|
| Legal status | Voluntary market standard | US federal law (required if handling PHI) |
| Who issues it | CPA firm attestation report | Self-attested; HHS enforces via OCR audits |
| Scope trigger | Enterprise sales requirement | Touching Protected Health Information |
| Renewal cadence | Annual SOC report | Continuous; annual risk analysis required |
| Penalty for non-compliance | Lost deals | OCR fines $100 - $50,000 per violation |
| Coverage of HIPAA controls | ~60-70% overlap (security controls only) | Full Privacy + Security + Breach Notification Rules |
| SimpleAudit support | Full platform support | Not supported in product (concept comparison only) |
Healthtech startups need both — SOC 2 to pass enterprise security review, HIPAA because federal law requires it the moment PHI flows through your systems.
Unlike SOC 2, HIPAA has no certification body and no annual report you can hand to a customer. You demonstrate HIPAA compliance through your policies, your Business Associate Agreements, your risk analyses, and your incident response history — which is why many healthtech customers also ask for a SOC 2 report as a verifiable proxy.
Source: 45 CFR §164.302-318, HHS HIPAA Security Rule
OCR civil monetary penalties run from $100 per violation (unintentional) to $50,000 per violation (willful neglect not corrected within 30 days), capped at $1.5M per identical violation per year. Tier-based enforcement means a single missing risk analysis can compound across thousands of records.
Source: 45 CFR §160.404, HHS enforcement policy
If you touch PHI on behalf of a HIPAA-covered entity (hospital, health plan, healthcare provider), you must sign a BAA with them — and with every downstream subprocessor you use. Most cloud vendors offer HIPAA BAAs, but the procurement process around them can stall sales by weeks.
Source: 45 CFR §164.504(e)
A HIPAA-covered hospital still asks vendors for a SOC 2 report during security review because HIPAA itself has no verifiable third-party deliverable. SOC 2 fills that gap — it's the document procurement attaches to the BAA package.
Roughly 60-70% of HIPAA Security Rule administrative and technical safeguards map directly to SOC 2 Common Criteria. Doing SOC 2 well meaningfully accelerates HIPAA readiness — but it does not replace HIPAA-specific obligations like the Privacy Rule and Breach Notification Rule.
For healthtech startups whose first enterprise prospect is a hospital, the practical sequence is: SOC 2 readiness in weeks, BAA signed at deal close, HIPAA policies and risk analysis layered in alongside. SimpleAudit handles the SOC 2 side; HIPAA needs a separate workstream.
If you are pre-revenue and pre-seed and not yet touching PHI (e.g. building a healthcare product that has not gone live with real patient data), HIPAA can be deferred until the first PHI flow. SOC 2 still helps you sell to non-healthcare customers. Once PHI shows up, HIPAA stops being optional regardless of SOC 2 status.
If you handle Protected Health Information for a covered entity (hospital, health plan, healthcare provider), HIPAA is required by US federal law — not optional. SOC 2 remains the voluntary credential that enterprise procurement teams verify during security review. Most healthtech B2B companies end up with both: HIPAA because it's the law, SOC 2 because it's how you prove security to the procurement team.
SimpleAudit is currently SOC 2-focused. Roughly 60-70% of the SOC 2 controls you build with SimpleAudit map to HIPAA Security Rule safeguards, so the work is not wasted. The HIPAA-specific obligations (Privacy Rule, Breach Notification Rule, BAAs, OCR audit response) require a separate workstream today. Native HIPAA support is on the roadmap.
No — they serve different purposes. HIPAA is a legal compliance obligation enforced by HHS through audits and breach investigations. SOC 2 is a voluntary attestation that produces a deliverable report you hand to enterprise prospects. A hospital might be HIPAA-compliant but still ask their vendors for SOC 2 reports because HIPAA has no equivalent third-party-verified deliverable.
OCR (the HHS Office for Civil Rights) can impose civil monetary penalties from $100 to $50,000 per violation, capped at $1.5M per identical violation per calendar year. Criminal penalties exist for knowing misuse. The pattern OCR enforces most often is "no risk analysis on record" — if you have not done a HIPAA risk analysis and PHI is breached, the fine multiplies fast.
HIPAA does not have a "ready date" — it's a continuous compliance state you enter and maintain. The realistic minimum to be defensible: 4-8 weeks to draft policies, complete a risk analysis, sign BAAs, and implement encryption + access controls. SOC 2 Type 1 with SimpleAudit takes 6-10 weeks from a cold start; Type 2 adds a 3-12 month observation period.
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