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Health Net: The Cost of a Data Breach

You may recall, in 2009 a data breach at Health Net exposed the personal and medical information of 1.5 million patients in several states: Arizona, Connecticut, New Jersey, New York, and Vermont. Some updates:

  • The Hartford Courant reported that the State of Connecticut fined the insurer $375,000, as the breach affected 446,000 Connecticut residents
  • The insurer will pay a $55,000 fine to the State of Vermont for failing to notify affected Vermont residents of the breach
  • In July 2010, the insurer had settled with the State of Connecticut for a $250,000 fine and a "Corrective Action Plan" to prevent future breaches

The actual costs to the insurer are far more, including the cost of security investigations, internal process and data security changes, two years of paid credit monitoring service for breach victims, and legal fees.


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