Health Insurer Settles Security Breach Case

Connecticut has reached a ground-breaking settlement with insurer HealthNet, after a security breach affecting the information of half a million state residents. WNPR’s Harriet Jones reports. In May last year, HealthNet lost a computer disk drive containing the private information of one and a half million customers around the nation, including 500,000 in Connecticut. A company investigation concluded the disk was likely stolen, but Health Net delayed informing affected customers and law enforcement. The insurer Tuesday settled a lawsuit brought by Connecticut, saying it will pay a quarter million dollars to the state, and will provide new, stronger security protections for consumers. Attorney General Richard Blumenthal: “As important as the money, this settlement sends a powerful message to not only HealthNet, but all guardians of private health and financial information about their profound responsibility to protect these highly confidential, intimate private records, and also to report promptly any breach of security.” The case marks the first time an insurer has been sued by a state attorney general under the federal Health Insurance Portability and Accountability Act, or HIPAA. For WNPR, I'm Harriet Jones.