231-922-9460 | Google +

Thursday, July 8, 2010

Health Net Settles Connecticut Suit Involving Lost Data

The Wall Street Journal

Health Net Inc. (HNT) will pay $250,000 to Connecticut and enact privacy-protection measures in a settlement with the state's attorney general, who sued the insurer after it lost a computer drive last year.

The deal, announced by Richard Blumenthal's office Tuesday, also includes two years of credit monitoring, $1 million of identity theft insurance and reimbursement for the costs of security freezes. It also includes a possible $500,000 payment to the state should the lost disk drive result in any illegal identity fraud.

Health Net later Tuesday highlighted the attorney general's comments that the company "worked closely and cooperatively" with him and state regulators on security measures. It also said it has no evidence of any misuse of the data to date.

"Protecting the privacy of our members is extremely important to us," the company said in a statement, adding that the measures made as a result of the case have put it in the forefront of securing health information.

Blumenthal, a Democratic candidate to succeed Sen. Chris Dodd (D., Conn.), said the stolen disk had medical records and financial info on about 500,000 Connecticut enrollees, part of the 1.5 million people whose data were on the disk. The drive went missing in May 2009. Blumenthal also said Health Net delayed notifying consumers and law enforcement authorities about it, which the company later concluded was likely a theft.

The settlement involves Health Net affiliates Health Net of the Northeast Inc. and Health Net of Connecticut Inc. and parent companies UnitedHealth Group Inc. (UNH) and Oxford Health Plans Inc. (OHP).