Encryption is a computing process that transforms readable data into an encoded form, known as ciphertext, which can only be accessed by authorized users with the right cryptographic key. It ensures that sensitive information remains secure and inaccessible to unauthorized individuals.

 

Understanding encryption

At its core, encryption is an algorithmic process that transforms readable data, known as plaintext, into an encoded form called ciphertext, using a mathematical key. The ciphertext is transmitted or stored, and the intended recipient uses a corresponding key to reverse the process and recover the original data. Anyone who intercepts the data without the key receives something that cannot be meaningfully read or used.

HIPAA defines encryption precisely as "the use of an algorithmic process to transform data into a form in which there is a low probability of assigning meaning without use of a confidential process or key." That definition matters for compliance purposes because it determines whether a breach involving lost or stolen encrypted data must be reported, and more on that below.

The strength of any encryption implementation depends on two things, the algorithm used to transform the data and the length of the key. Longer keys mean exponentially more possible combinations for an attacker to test, making brute-force approaches impractical against modern standards. NIST's cybersecurity resource guide for HIPAA, published in February 2024 in collaboration with HHS OCR, establishes the practical benchmarks healthcare organizations should follow for algorithm selection.

 

The two types of encryption

Symmetric and asymmetric encryption are the two fundamental models, and most real-world systems use a combination of both.

Symmetric encryption uses a single key for both encrypting and decrypting data. The sender and recipient must each hold the same secret key, and the security of the entire exchange depends on keeping that key out of unauthorized hands. The primary advantage is speed symmetric algorithms process large volumes of data efficiently, which is why they are used for encrypting stored files, database contents, and bulk data at rest. The Advanced Encryption Standard (AES) is the dominant symmetric algorithm in use today, with 256-bit key lengths widely recommended for healthcare data, given the sensitivity involved.

Asymmetric encryption uses a mathematically linked key pair, a public key that can be freely shared, and a private key that the owner keeps secret. Data encrypted with the public key can only be decrypted with the corresponding private key, which means anyone can encrypt a message to a specific recipient without needing prior key exchange. The computational cost is higher than symmetric encryption, so asymmetric encryption is typically used to establish secure connections and exchange symmetric keys rather than to encrypt large data payloads directly. RSA and elliptic curve cryptography are the most common asymmetric algorithms in healthcare environments.

Most secure communication protocols combine both asymmetric encryption to negotiate and exchange a session key, then symmetric encryption to protect the actual data being transmitted. Transport Layer Security (TLS), the protocol underlying secure email and web traffic, works exactly this way.

 

Encryption at rest versus encryption in transit

The distinction between these two categories determines both what is protected and when, and healthcare organizations need both to work reliably.

Encryption in transit protects data while it moves between systems from a clinician's email client to a patient's inbox, from a hospital server to a cloud-based EHR, or between two healthcare organizations exchanging referral information. HHS's breach notification guidance specifies that valid encryption for data in motion must comply with NIST Special Publication 800-52, which covers TLS implementations, or NIST SP 800-77 for IPsec VPNs. TLS 1.2 is the current minimum acceptable standard, with TLS 1.3 recommended for new implementations given its improved security and performance characteristics.

Encryption at rest protects data stored on devices, servers, databases, and backup media. NIST SP 800-111, which covers storage encryption for end-user devices, defines the acceptable standards for this category. AES-256 is the algorithm most commonly implemented for healthcare data at rest because it satisfies NIST requirements and provides a security margin appropriate for protecting sensitive patient information over extended time periods.

Both categories matter independently. An organization that encrypts its stored patient data but sends it unencrypted over email has protected one half of the exposure while leaving the other open. The reverse is equally true. Healthcare organizations frequently have encryption policies without realizing their email platform is not applying those policies consistently, a gap that Paubox's certificate validation research found affects approximately 4% of all outbound healthcare email connections, where the receiving server presents invalid certificates that cause standard TLS encryption to either fail silently or not apply at all.

 

Encryption and the HIPAA breach notification safe harbor

One of the most practically significant aspects of encryption in healthcare is the breach notification safe harbor it provides. Under 45 CFR 164.402, an acquisition, access, use, or disclosure of protected health information is not considered a breach if the PHI involved was encrypted in accordance with NIST standards and the encryption keys were not compromised alongside the data. An organization that loses an encrypted laptop containing patient records, or whose email is intercepted in transit but was protected by valid TLS, is not required to notify affected patients or report to HHS OCR under those circumstances.

The inverse is equally clear, unencrypted PHI that is lost, stolen, or accessed without authorization triggers the full breach notification process regardless of the circumstances. That means patient notifications within 60 days, HHS OCR reporting, and for breaches affecting 500 or more individuals in a state, media notification in that state as well. OCR enforcement actions involving unencrypted email and unencrypted devices have produced penalties ranging into the millions of dollars, and the agency has consistently cited failure to implement addressable encryption requirements as a primary finding in those investigations.

 

Encryption and the HIPAA Security Rule

HIPAA's Security Rule classifies encryption as an "addressable" implementation specification rather than a required one, which is widely misunderstood. Addressable does not mean optional it means organizations must either implement the specification or document why an equivalent alternative provides the same protection. Given the breach safe harbor, the enforcement history, and the absence of any equivalent alternative to encryption for protecting ePHI in transit, virtually every risk analysis will conclude that encryption is necessary.

HHS published a proposed update to the HIPAA Security Rule in December 2024 that would remove the addressable/required distinction entirely and make encryption a mandatory requirement for all ePHI at rest and in transit, with no exceptions. The comment period closed in March 2025, and the rule has not yet been finalized, but the direction is unambiguous. Organizations relying on the current addressable classification to defer encryption implementation are taking on regulatory risk that the proposed rule would eliminate as a matter of policy.

 

What encryption does not protect

Encryption protects data from being read by unauthorized parties during transmission or storage. It does not protect against unauthorized parties who obtain valid credentials and authenticate normally, against insider threats from individuals who have legitimate access to decryption keys, or against attacks that target the endpoints where data is decrypted rather than the encrypted data itself. A clinician who is phished into surrendering their login credentials exposes their email account. Regardless of whether the emails in that account were encrypted in transit, once an attacker is authenticated as a legitimate user, the data is available to them in readable form because they hold the keys.

That boundary is why encryption is necessary but not sufficient. Phishing prevention, access controls, multi-factor authentication, and monitoring for anomalous behavior all address threats that occur at the layer above encryption, where data is accessible to authenticated users. According to Paubox's 2026 Healthcare Email Security Report, phishing-driven mailbox takeovers exposed 630,000 individuals in 2025, making them the most damaging email attack type by patient data impact, and none of those exposures would have been prevented by encryption alone because the attacker in each case obtained legitimate, authenticated access.

Paubox Email Suite encrypts every outbound message automatically by default, validates the receiving server's certificate before sending to ensure TLS is actually applied rather than assumed, and handles fallback delivery through a secure channel when certificate validation fails, so PHI is never transmitted unencrypted regardless of the recipient's mail infrastructure. Paubox Inbound Email Security addresses the layer above encryption, using AI to detect and block phishing attempts before they reach clinical staff. According to Paubox's report on what healthcare gets wrong about HIPAA and email security, organizations that rely on user judgment to recognize when encryption is needed cannot demonstrate the consistent, provable application that OCR looks for when investigating email-related breaches.

Learn more: HIPAA Compliant Email: The Definitive Guide

 

FAQs

Does HIPAA require encryption?

HIPAA classifies encryption as an addressable specification, meaning organizations must implement it or document why an equivalent alternative suffices. In practice, no equivalent alternative exists for email and data transmission, making encryption a functional requirement. A proposed HHS rule published in December 2024 would make encryption explicitly mandatory for all ePHI at rest and in transit.

 

What is the breach notification safe harbor, and how does encryption trigger it?

Under HIPAA's breach notification rules, encrypted PHI that is lost or accessed without authorization does not require breach notification to patients or HHS OCR, provided the encryption met NIST standards and the encryption keys were not compromised. Organizations without encryption lose access to this protection and must report any unauthorized access as a breach, regardless of whether harm resulted.

 

What encryption standards does HHS recommend for healthcare?

HHS defers to NIST for specific algorithm guidance. For data at rest, NIST SP 800-111 covers storage encryption, with AES-256 widely used for healthcare workloads. For data in transit, NIST SP 800-52 covers TLS implementations, with TLS 1.2 as the minimum and TLS 1.3 recommended for new deployments.

 

What is the difference between encryption in transit and encryption at rest?

Encryption in transit protects data as it moves between systems, such as an email traveling from sender to recipient. Encryption at rest protects data stored on devices, servers, or backup media. Both are necessary and address different exposure windows. An organization can have strong at-rest encryption while still transmitting patient data unencrypted, or vice versa.

 

Can encryption prevent all healthcare data breaches?

No. Encryption protects data from being read by unauthorized parties who intercept it in transit or access storage media without authorization. It does not prevent breaches that occur through compromised credentials, where an attacker authenticates normally as a legitimate user and accesses data that is decrypted for them in the ordinary course of use. Phishing prevention, multi-factor authentication, and access controls address those threats at a different layer of the security architecture.