Yost anounces multistate data breach settlement


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COLUMBUS, Ohio — Ohio Attorney General Dave Yost today announced a multistate settlement requiring the health insurance company Premera Blue Cross to pay $10 million for its failure to secure sensitive consumer data.

Premera’s insufficient data security exposed the protected health and personal information of more than 10.4 million consumers nationwide, including 52,677 people in Ohio. A coalition of 30 states investigated Premera’s cybersecurity vulnerabilities that gave a hacker unrestricted access to protected health information for almost a year.

“Exposing personal information gets to the core of vulnerability – it can now be used whenever, however and without your knowledge,” Yost said. “Premera was well aware of its faulty defenses and had been warned but rather decided to sweep the problem under the rug.”

Under the settlement, Premera will pay $10 million total to the states, with $67,792 going to Ohio. The company is also required to implement specific data security controls intended to protect personal health information, annually review its security practices and provide data security reports to the attorneys general. Premera’s $10 million payment to the states is in addition to any amount Premera will be paying as a result of a proposed class action settlement, which received preliminary approval on July 29 from a federal court in Oregon.

In the complaint announced today, Attorney General Yost asserts that the company failed to meet its obligations under the federal Health Insurance Portability and Accountability Act (HIPAA) and violated Ohio’s Consumer Sales Practices Act by neglecting to address known cybersecurity vulnerabilities that gave the hacker access to protected health information.

From May 5, 2014, until March 6, 2015, the hacker had unauthorized access to the Premera network containing sensitive personal information, including private health information, Social Security numbers, bank account information, names, addresses, phone numbers, dates of birth, member identification numbers and email addresses.

The hacker took advantage of multiple known weaknesses in Premera’s data security. For years prior to the breach, cybersecurity experts and the company’s own auditors repeatedly warned Premera of its inadequate security program, yet the company accepted many of the risks without fixing its practices.

The complaint asserts that Premera misled consumers nationwide about its privacy practices in the aftermath of the data breach. After the breach became public, Premera’s call center agents told consumers there was “no reason to believe that any of your information was accessed or misused.” They also told consumers that “there were already significant security measures in place to protect your information,” even though multiple security experts and auditors warned the company of its security vulnerabilities prior to the breach.

Under HIPAA, Premera is required to implement administrative, physical and technical safeguards that reasonably and appropriately protect sensitive consumer information. Premera repeatedly failed to meet these standards, leaving millions of consumers’ sensitive data vulnerable to hackers for nearly a year.

Today’s settlement also requires Premera to:

Ensure its data security program protects personal health information as required by law.

Regularly assess and update its security measures.

Provide data security reports, completed by a third-party security expert approved by the multistate coalition, to the Washington State Attorney General’s Office.

Hire a chief information security officer, a separate position from the chief information officer. The information security officer must be experienced in data security and HIPAA compliance and will be responsible for implementing, maintaining and monitoring the company’s security program.

Hold regular meetings between the chief information security officer and Premera’s executive management. The information security officer must meet with Premera’s CEO every two months and inform the CEO of any unauthorized intrusion into the Premera network within 48 hours of discovery.

The multistate settlement against Premera involves Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, Utah, Vermont and Washington.

Submitted by the office of Attorney General Dave Yost.

Submitted