California settles with Anthem Blue Cross over data breach

SACRAMENTO
October 1, 2012 9:00pm

Blue Cross of California, one of the state’s largest health insurers, has agreed to clamp down on how it handles its customers’ Social Security numbers after allegations it failed to protect the personal information of its members.

The state of California sued Blue Cross of California, which does business under the trade name Anthem Blue Cross, after it was revealed that the company had printed Social Security numbers on letters mailed to more than 33,000 of its Medicare Supplement and Medicare Part D subscribers between April 2011 and March 2012.

In doing so, Anthem violated a state law that restricts the disclosure of Social Security numbers, says Attorney General Kamala Harris.

“This settlement requires the company to make significant improvements to its data security procedures to ensure this type of error does not happen again,” Ms. Harris says.

After the incident, Anthem sent a letter to all affected members whose Social Security numbers were visible through the mailed envelope, notifying them of the breach and offering each a year of free credit monitoring services.

The settlement also requires Anthem to implement new technical safeguards for its data management system, restrict employee access to members’ Social Security numbers and provide enhanced data security training for all of its associates.

The company must also pay $150,000 to settle the claim.