SOC 2 vs. HIPAA: Key Differences, Overlaps, and What You Need to Know
Discover the critical differences between SOC 2 vs. HIPAA frameworks and how to streamline your security program for both.
Both HIPAA and SOC 2 are frameworks designed to protect sensitive information from unauthorized access and security threats. While they share some commonalities, there are also a lot of differences between the two.
Here’s everything you need to know about SOC 2, HIPAA, how they complement each other, and how you can work towards achieving compliance with both frameworks.
What is SOC 2?
SOC 2 (or Service Organization Control 2 to give it its full name) is a compliance standard for service organizations, developed by the American Institute of CPAs (AICPA).
The framework is based on five Trust Service Criteria: Security (the common criteria), Availability, Processing Integrity, Confidentiality, and Privacy. It’s designed to ensure that organizations protect sensitive data against threats and unauthorized access.
A service organization can get two types of SOC 2 reports: SOC 2 Type I and SOC 2 Type II. Type I looks at your security controls at a single point in time, Type 2 analyzises whether your controls are working effectively over a chosen period of time (usually 3-6 months. In most cases, it’s best to work towards getting a SOC 2 Type II report.
Who Needs to be SOC 2 Compliant?
SOC 2 is especially important to SaaS providers, financial service provides, and cloud companies that handle large amounts of data on behalf of their customers.
SOC 2 isn’t mandated by the government or any organization, but it’s often seen as the entry pass for enterprise sales in North America. Without it, you will likely be blocked from closing deals with any company mid-market or enterprise customers.
When a service organization achieves SOC 2 compliance it builds trust with partners and potential partners, proving that your organization has a strong cybersecurity posture and understands how to protect sensitive information and mitigate security threats.
What is HIPAA?
The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that was put in place to protect sensitive patient health information from being disclosed without the patient's consent or knowledge.
Unlike SOC 2, HIPAA is not optional. If your software handles, stores, or transmits Protected Health Information (PHI), then you are legally mandated to comply with HIPAA regulations. PHI includes:
- Names
- Contact data
- Social Security numbers
- Health plan data
- Biometrics
HIPAA is made up of several rules including:
- The Privacy Rule: Sets national standards for responsible PHI usage and disclosures.
- The Security Rule: Details the required safeguards and security measures needed to protect PHI.
- Breach Notification Rule: This sets out mandatory steps that must be followed after a data breach.
Like SOC 2, HIPAA is not a rigid list of controls. Instead, it sets requirements and leaves it to your organization to determine which specific controls will satisfy those requirements.
Who Needs to be HIPAA Compliant?
Organizations that are required to be HIPAA compliant fall into two categories:
- Covered Entities (CE)
- Business Associates (BA)
A Covered Entity (CE) is an organization directly regulated by HIPAA, including:
- Health plans: Insurance companies, HMOs, employer health plans, government programs (Medicare, Medicaid, etc.)
- Healthcare providers: Doctors, clinics, hospitals, dentists, pharmacies, psychologists, etc. if they transmit health information electronically in connection with certain transactions (like billing).
A CE owns the primary responsibility for protecting PHI (Protected Health Information) and ensuring HIPAA compliance.
A Business Associate (BA) is a person or organization that is not part of the covered entity’s workforce, but creates, receives, maintains, or transmits PHI on behalf of a CE (or on behalf of another BA). Including:
Common BA examples include:
- Cloud hosting providers storing PHI
- EHR / practice management vendors
- Billing companies and revenue cycle vendors
What is the key difference between SOC 2 and HIPAA?
Here’s what you need to know about the key differences between SOC 2 and HIPAA:
Voluntary vs. Mandatory
There’s no federal law mandating organizations need to meet SOC 2 requirements. Instead, it’s a voluntary process service organizations go through to ensure they have the correct security controls in place to safeguard customer data. Many organizations work towards SOC 2 as they begin to go up-market and work with mid-market and enterprise customers, many of which will demand SOC 2 before signing contracts.
HIPAA is mandatory by law and required by all Covered Entities and Business Assistants that handle PHI.
Industry Focus
While SOC 2 and HIPAA share some similarities, they’re focused on different industries. SOC 2 is mostly for cloud and software businesses who want to ensure they can be trusted with customer data, whereas HIPAA is mandatory for healthcare organizations that handle PHI.
Penalties
There’s no legal risk or potential fines for not having SOC 2 in place. The consequences are largely commercial, meaning you may struggle to close enterprise deals if you don’t have a valid SOC 2 report to appease your customer’s (or potential customer’) procurement teams.
With HIPAA there’s legal risk involved if with non-compliance. HIPAA is enforced by the Office for Civil Rights (OCR). If they find serious non-compliance, they can impose substantial fines (up to tens of thousands of dollars per violation), with annual caps that can reach around $1.5 million per violation type. In extreme cases involving intentional misuse of health data, there can also be criminal charges.
Certification Process
SOC 2 requires a third-party audit from an independent CPA firm. The auditor will come into your business, test your controls and inspect your internal processes, and issue a formal Type 1 or Type 2 report.
HIPAA is self-attested, with no required third-party audit. Instead, organizations must perform internal checks, assessments, and ensure compliance with HIPAA rules is maintained.
What is the Overlap Between SOC 2 and HIPAA?
There are some commonalities across how SOC 2 and HIPAA approach security. But SOC 2 compliance doesn’t automatically make an organization HIPAA compliant or vice versa.
If you’re working towards both SOC 2 and HIPAA compliance, the commonalities include:
- Access Control: Both require unique IDs, Multi-Factor Authentication (MFA), and automatic logouts.
- Encryption: Both require encrypting data at rest (database) and in transit (TLS).
- Risk Management: Both require regular risk assessments and vendor risk management reviews.
- Incident Response: Both require a plan to detect and report breaches.
However, achieving SOC 2 compliance won’t mean you’re fully compliant with HIPAA.
SOC 2 and HIPAA Mapping
If you’re working towards compliance with both frameworks, it can make sense to approach them together to avoid unnecessary work. While HIPAA is the non-negotiable baseline for handling protected health information (PHI), adding SOC 2 demonstrates the rigorous operational maturity that enterprise partners require to sign contracts.
The HIPAA Security Rule overlaps significantly with SOC 2’s Trust Services Criteria, specifically regarding security controls and risk management. By mapping these shared controls, you can streamline your audit preparation and significantly reduce administrative overhead.
Achieve Compliance with Workstreet
If you’d like an expert opinion on how to approach SOC 2 and HIPAA, Workstreet can help. Our expert team has vast experience with both frameworks and can help you automate your compliance and build an AI-enabled security and privacy program.
With Workstreet's SOC 2 and HIPAA compliance services, you can assess your baseline against both frameworks simultaneously, automate the evidence collection, and get back to building your product.
Frequently Asked Questions (FAQ)
What is the Main Difference Between SOC 2 and HIPAA?
SOC 2 is a voluntary framework focused on proving trust to customers, while HIPAA is a mandatory federal law focused on protecting patient privacy.
Does SOC 2 Compliance Automatically Make Me HIPAA Compliant?
No. While there are some similarities, holding a valid SOC 2 report does not automatically satisfy HIPAA's legal requirements.
Can I Use the Same Controls for Both SOC 2 and HIPAA Compliance?
Yes, absolutely. This is the most efficient strategy. Controls like Multi-Factor Authentication (MFA), encryption, and vendor risk management satisfy requirements for both frameworks. Using a unified GRC platform to map one control to both standards prevents duplicate work.
What Does SOC 2 Cover that HIPAA Doesn't?
SOC 2 is broader in its potential scope. While HIPAA focuses strictly on Protected Health Information (PHI), SOC 2 applies to all customer data. Additionally, SOC 2 includes optional criteria like Availability, and Processing Integrity, which are not explicit focuses of HIPAA.
Who Audits SOC 2 vs. HIPAA?
SOC 2 is audited by independent Certified Public Accounting (CPA) firms. HIPAA has no standard annual certification audit; instead, it’s self-attested.
Do I need a Business Associate Agreement (BAA) for SOC 2?
Not for standard SOC 2. But if you are adding HIPAA mapping, auditors will check that you have signed BAAs with all vendors (like AWS, Google Workspace, or OpenAI) that handle your PHI. Without these, you will fail the HIPAA portion of the audit.
Is HITRUST the same as SOC 2 + HIPAA?
No. HITRUST is a separate, much more rigorous (and expensive) framework. While SOC 2 + HIPAA is sufficient for most Series A-C startups, large players (like UnitedHealthcare or Anthem) may eventually require HITRUST. For most startups, SOC 2 + HIPAA is the right starting point.
