If I understand you.... you are referring to the privacy portion of it?
HIPPA is a vast set of laws that are very complicated, but for the most part the privacy portion only refers to health care providers that I am aware of. It refers to "covered entities" those are health plans, health care providers, and health care clearing houses. Unless the employers is operating in one or more of those capacities the law does not apply to them.
Basically the law was written by the slick Willy and cronies to "help" get health records into the electronic age, but it is much more than that. The law has many gray areas that are miss understood and even the federal government has given conflicting stories over the years. IMHO all it has done is drive health care cost up.