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July 06, 2010 at 08:00 PM
A health insurer has agreed to pay $250,000 to Connecticut to resolve allegations relating to the loss of a computer disk drive that contained information about 2 million consumers.
Connecticut Attorney General Richard Blumenthal negotiated the settlement with two former subsidiaries of Health Net Inc., Woodland Hills, Calif. (NYSE:HNT) — Health Net of Connecticut Inc. and Health Net of the Northeast Inc.
The settlement also includes UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH), which acquired Health Net’s operations in Connecticut, and Oxford Health Plans, a UnitedHealth subsidiary.
Health Net Inc. is still administering the Connecticut operations for UnitedHealth.
Health Net lost track of a disk drive in May 2009, and there is evidence that the drive may have contained unencrypted Social Security numbers and bank account numbers, Blumenthal alleged in the suit filed in January.
Health Net of Connecticut began telling policyholders about the loss of the drive in November 2009, without letting Connecticut authorities know that the drive had disappeared, Blumenthal alleged in the suit.
Blumenthal is now praising the settling companies for accepting responsibility for the data breach and cooperating with efforts to resolve the matter.
“This settlement sends a strong message to Health Net and all guardians of private health and financial information about their profound responsibilities to protect medical and financial records,” Blumenthal says.
So far, there is no evidence that anyone has misused data from the missing Health Net of Connecticut disk drive, Blumenthal says.
Health Net has issued a statement emphasizing the lack of evidence that personal information has been misused and noting that Blumenthal has described the company as working cooperatively with state regulators.
“Protecting the privacy of our members is extremely important to us,” Health Net says.
The improvements in security systems, security programs and training made since Health Net of Connecticut began working with Connecticut regulators “will result in Health Net being in the forefront of securing member health information,” the company says.
