Insurance company, WellPoint, fined $1.7m over data exposure

WellPoint failed to secure its online application database, which exposed more than 600,000 records

Insurance provider WellPoint has agreed to pay a $1.7 million fine for exposing more than 600,000 personal records online due to weak database security, the U.S. Department of Health & Human Services (HHS) said Thursday.

WellPoint, based in Indianapolis, is one the largest health insurers in the U.S., with more than 100 million customers covered by it and its subsidiaries.

In 2009, WellPoint reported to the federal agency that an online database holding personal and health information for 612,402 individuals was left accessible over the Internet between October 2009 and March 2010. The data included names, addresses, birth dates, Social Security numbers, phone numbers and health information.

The Health Information Technology for Economic and Clinical Health Act requires that organizations which fall under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules must report health-related data breaches, according to HHS.

An HHS investigation found that WellPoint did not have adequate policies and procedures for access to the online application database. WellPoint did not have "technical safeguards" in place to verify people seeking access to the health information held in system, HHS said.

The case should remind HIPPA entities to take care in managing information systems, particularly when changing Web-based applications or portals, HHS said in news release.

HHS advised that starting Sept. 23, the liability for many HIPPA requirements will extend to contractors and subcontractors.

Send news tips and comments to jeremy_kirk@idg.com. Follow me on Twitter: @jeremy_kirk

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