Blumenthal announces the first state settlement with Healthnet

This January Connecticut State Attorney General Richard Blumenthal painted the headlines red when he brought a HIPAA enforcement action against insurance giant Health, thus becoming the first AG in the country to do so. Health Net has been under suit for it’s loss of a hard drive containing over 500,000 individuals’ records including clinical data, social security numbers, addresses, and other financial information. According to Blumenthal, Healthnet then compounded the gaffe (which they chalked up to theft) by failing to inform those affected about what had occurred for over six months after the incident occurred.

Now, Blumenthal has added more to the news with his announcement that he has brokered the first state settlement of such an action. Under the terms of the settlement Healthnet will be ordered to pay $250,000 directly to the state of Connecticut representing statutory damages (and to serve as a warning to other health insurance companies as well no doubt) They will also have to put aside a further $500,000 to cover damages should it eventually be found that the missing hard drive was accessed and that members personal information was ever used in an illegal manner.

This is sure to add more lines to some already wrinkled brows at Healthnet……..