Who must comply with HIPAA regulations?

The correct answer highlights the broad scope of entities that are required to comply with HIPAA regulations. Covered entities include healthcare providers who transmit health information electronically, health plans (such as health insurance companies), and healthcare clearinghouses. These are the primary organizations that have direct obligations under HIPAA.

Additionally, business associates are individuals or entities that perform functions on behalf of, or provide services to, covered entities that involve the use or disclosure of protected health information (PHI). This means that if a company provides billing services, data analysis, or any other service that requires access to PHI, it is considered a business associate and must also adhere to HIPAA regulations. Their subcontractors, who handle PHI on behalf of the business associate, are included in these compliance obligations, which underscores the importance of protecting patient information throughout the entire chain of handling sensitive health data.

By focusing on both covered entities and their business associates, the correct answer reflects the comprehensive nature of HIPAA's compliance requirements, ensuring broad protection of patient privacy across the healthcare ecosystem. The other options either limit the scope of who must comply or misidentify responsibility.