SOC 2 vs HIPAA Compliance: What’s the Difference?

SOC 2 vs HIPAA Compliance: What’s the Difference?

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Everyone feels the pressure to level up their data security game but what’s the difference between SOC 2 and HIPAA? Which do you need to build trust? Well, it depends on the industry you work in and the type of customers you have. 

Let’s look at SOC 2 vs HIPAA and their similarities and differences.

What is SOC 2

SOC 2 is an audit process evaluating your organization’s ability to securely manage the data you collect and use during everyday business operations. A SOC 2 Type 1 reports on controls at the time of your audit, while a SOC 2 Type 2 looks at the same set of controls as Type 1 but reports on how effectively you maintain them over a period of time. Here, you can learn more about SOC 2 Type 1 and SOC 2 Type 2.

SOC 2 applies to most SaaS companies and businesses using the cloud to store customer data. 

Why SOC 2

A passing SOC 2 attestation exemplifies dependability and trustworthiness. You’re clearly able to show customers and prospects that you can be trusted with their data. Generally speaking, a SOC 2 Type 1 audit takes one to three months, including prep time, and a SOC 2 Type 2 audit ranges from six to 12 months. 

So why do customers and prospects trust SOC 2 so much? A SOC 2 report is valid for a year which means it’s reviewed by a third party regularly, reflecting current information. 

Process of SOC 2 Certification

A certified public accountant (CPA) performs the audit, and their report documents your controls and Trust Service Criteria.

The five Trust Service Criteria include:

  • Security: Security refers to the protection of data throughout its entire lifecycle.
  • Availability: Availability proves your systems are available for operation and meet the entity’s objectives.
  • Processing integrity: System processing is complete, valid, accurate, timely, and so there are no accidental errors. Basically, you prove your systems are reliable.
  • Confidentiality: Information designated as confidential is protected to meet the entity’s objectives, like with NDA’s and data disposal. 
  • Privacy: Similar to Confidentiality, except Privacy refers specifically to PII and how it’s handled.

To comply with SOC 2, the only criterion you need to address is security.

Your SOC 2 journey will be as unique to your business as a fingerprint but there are some steps you’ll have to take (or you can’t count out):

  1. Define your scope
  2. Select an auditor
  3. Write/update/implement policies and controls
  4. Collect evidence
  5. The audit

Unfortunately, the AICPA hasn’t issued an official SOC 2 compliance checklist, but you can learn from our SOC 2 audit experience.


What is HIPAA

We’ve explored HIPAA a lot lately! First, there’s our comprehensive primer on HIPAA, followed by deep dives into  HIPAA vs GDPR and HIPAA vs HITRUST

At a very high level, HIPAA (Health Insurance Portability and Accountability Act of 1996) is a U.S. law. It oversees the privacy and security of protected health information, also known as PHI. Personal identifiers, like names, telephone numbers, license plates or addresses, are examples of PHI. This is valuable information that bad actors target, making it extra important that covered entities put all possible safeguards in place. 

HIPAA’s covered entities and their business associates include: 

  • Health insurers (health insurance companies, company health plans, etc.)
  • Healthcare providers (doctors, clinics, dentists, chiropractors, pharmacies, etc.)
  • Healthcare clearinghouses (entities that process nonstandard health information which they receive from another entity into a standard format)

… in other words, any organization that comes in contact with patients’ PHI. 

The U.S. Department of Health and Human Services, Office for Civil Rights (OCR) enforces steep penalties for HIPAA violations. The law contains the Privacy, Security and Breach Notification Rules. Together, they protect and give individuals rights to their health information.


As mentioned above, HIPAA is not optional. It’s the law. If your organization is a covered entity or business associate, HIPAA needs to be baked into your business DNA. Otherwise, you’re in for some hefty fines and a unique feature on the OCR’s “Wall of Shame.” Irreparable damage to your reputation isn’t easy to bounce back from.

The Process of HIPAA Certification

There’s no certification body for HIPAA. We’re a broken record but HIPAA is law, so it isn’t auditable or certifiable. The law’s security rule includes an evaluation standard requiring organizations to perform periodic technical and nontechnical evaluations to ensure compliance. While the OCR enforces the law and penalizes organizations for non-compliance, it doesn’t hand out certifications. 

However, there’s a little gray area here. To evaluate your systems, you can retain a certified public accountant (CPA) specializing in SOC 2 + HIPAA audits. These particular CPAs will provide a SOC 2 report and a document regarding your HIPAA compliance after the audit. 


Similarities Between SOC 2 vs HIPAA

While the responsibilities of HIPAA covered entities and business associates vary, it’s common to pursue a SOC 2 attestation as well. To comply with SOC 2, the only Trust Service Criteria you need to address is security but healthcare organizations often choose to include the availability and confidentiality criteria. 

SOC 2 vs HIPAA Encryption of Data at Rest

Both SOC 2 and HIPAA require that customers’ sensitive data at rest must be encrypted at all times. In addition, any data repositories that house sensitive data should be encrypted by default to keep it simple.  

SOC 2 vs HIPAA Password Policy and Enforcement

Implementing a central password management system to enforce strong passwords and manage access to applications is a crucial component of both SOC 2 and HIPAA frameworks. A password management system strengthens your security posture but users should pick their own passwords. This makes it easier to remember than machine-generated ones while enforcing a certain level of strength. 

SOC 2 vs HIPAA Vendor Risk Assessment Report

Vendor Risk Assessments (VRAs) are mandatory for passing audits like HIPAA and SOC 2. Conducting vendor risk assessments can be complicated. However, failing to complete VRAs often results in reputational damage, lost business, legal fees and fines. So don’t skip or skimp on performing VRAs. Long term, they’ll help you select partners aligned with your security and compliance values, building stronger relationships. 

SOC 2 vs HIPAA Code of Conduct and Ethics Reviews

To comply with SOC 2 and HIPAA, organizations and covered entities must define a Code of Conduct and Ethics and review them annually. A well-written code of conduct clarifies an organization’s mission, values and principles, linking them with standards of professional conduct. All employees must acknowledge the code of conduct during onboarding or any significant changes.

More Certifications, Less Work

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Differences Between SOC 2 vs HIPAA

Comparing SOC 2 and HIPAA is a little like comparing apples and oranges. But there are some significant differences between the two frameworks. 

SOC 2 vs HIPAA Purpose

HIPAA oversees how healthcare organizations and their business associates handle PHI in the U.S. SOC 2, on the other hand, is less niche. Systems and Organization Controls 2 (SOC 2) is an audit process that evaluates your company’s ability to securely manage the data you collect and use during business operations. Typically, SaaS businesses will pursue SOC 2 because a business or prospect requires it. 

SOC 2 vs HIPAA Cost 

SOC 2 and HIPAA are unique compliance journeys and many factors come into play when you’re vetting them. SOC 2 is a much more affordable undertaking.

The number of Trust Services Criteria that apply to your organization for SOC 2 will affect the final price with or without a tool like Tugboat Logic. For a detailed breakdown of SOC 2 costs, read our SOC 2 Cost Guide.

The U.S. Department of Health and Human Services, Office for Civil Rights, includes estimated costs for HIPAA. The figure they provide, $1,040, is likely pulled from a hat and does not accurately represent implementation costs. According to SecurityMetrics, small covered entities or business associates are looking at $4000 – $12,000. Larger entities, higher prices. 

SOC 2 vs HIPAA Time

Time is valuable, so, understandably, SOC 2 and HIPAA compliance weighs heavily on organizations. On your own or with a consultant, SOC 2 compliance can be a long one. SOC 2 prep time will eat up four to six months, potentially more, of your time and then the audit will vary based on your needs. How Long Does SOC 2 Compliance Take can answer your questions.

HIPAA compliance is a significant undertaking, so the earlier an organization takes it on, the better. The following are typical timelines for HIPAA compliance:

  • Hospitals and large healthcare organizations—two to three years
  • Medium-sized healthcare organizations—one to two years
  • Single-location healthcare and business associates—less than six months

SOC 2 vs HIPAA Data Processing Integrity Policy and Procedure

SOC 2 requires organizations to identify and define types of data necessary to support a product or service and the data that is considered key while collecting, storing, analyzing, and reporting any information. 

Elements to consider while creating define the data integrity policy requirements:

  • Type of data processed (e.g., PHI, transaction amount for services, billing information, etc.) 
  • Scope of data collected (e.g., time period or events)
  • Source of the data
  • How it’s collected

HIPAA does not require a data diagnosis. 

SOC 2 vs HIPAA Breach Notification Rule 

The Breach Notification Rule requires HIPAA-covered entities and their business associates to provide notification following a breach of unsecured protected health information.

Individuals must be notified within 60 days of a breach of PHI by first-class mail or email if the individual has agreed to receive emails. Suppose outdated contact information exists for ten or more affected individuals. In that case, they must post the notice on their webpage for at least 90 days or provide it in major print or broadcast media. 

Breaches impacting more than 500 individuals require organizations complying with HIPAA to provide notice to prominent media outlets serving their jurisdiction within 60 days. 

Covered entities must also notify the secretary of breaches involving PHI here. If 500 or more individuals were impacted, the covered has 60 days to share the news. If less than 500 individuals were affected, the organization could notify the secretary annually.

SOC 2 does not have any rules regarding data breach notification. But it’s a good idea to have a plan in place if an event occurs.


How Tugboat Helps SOC 2 and HIPAA Compliance

Tugboat Logic supports both HIPAA and SOC 2 compliance! Using one platform, you can manage multiple frameworks without duplicating any work.

With our SOC 2 automation, you’ll have a clear roadmap to certification to complete your SOC 2 quickly, confidently, and cost-effectively.

We offer a similar flow and feature for HIPAA! Our pre-built policies are mapped to all of the controls, risks and associated evidence you need to collect to ensure you’re always compliant. There’s even a built-in breach notification template to quickly and effortlessly comply with the HIPAA Breach Notification Rules.

So, if you’re looking for a stress-free and straightforward way to get through SOC 2 and or HIPAA, grab a free trial of our product. And if you’re ever confused, don’t hesitate to contact us. Our team of ex-auditors and security veterans has over 100 years of combined experience working in security. We’re always here to help.