Vermont Settles Data Breach Case with Insurer for $55K

The Vermont Attorney General’s office says a Connecticut-based health insurance company is ready to pay $55,000 to settle a complaint that it didn’t inform customers that personal information had been lost along with an unencrypted computer hard drive.

The state says the complaint and proposed settlement with Health Net and Health Net of the Northeast, of Shelton, Conn., were both filed on Friday.

The case arose after the loss of a portable hard drive that contained protected health information, social security numbers, and financial information of approximately 1.5 million people, including 525 Vermonters.

Health Net discovered that the drive was missing on May 14, 2009 but did not start notifying affected Vermont residents until more than six month later.