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Horizon BCBS of New Jersey Pays State $1.1 million for HIPAA violations

By Linn Foster Freedman on March 7, 2017
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We often forget that state AG’s have jurisdiction under the HIPAA Omnibus Rule to levy fines and penalties against HIPAA covered entities for violations. This is because the Office for Civil Rights has traditionally taken the primary role in enforcing HIPAA. But Horizon Blue Cross Blue Shield of New Jersey (Horizon) was reminded of the AG’s ability to enforce HIPAA when it recently agreed to pay a $1.1 million fine to the New Jersey Division of Consumer Affairs for an incident that occurred in November of 2013  involving the theft of two unencrypted laptops from its offices.

Although the laptops were secured to the desks with security cables and were password protected, they were not encrypted. The information contained on the laptops included the names, addresses, Social Security numbers, birth dates, insurance identifiers, and some clinical data.

The Division found during its investigation that Horizon had over 100 unencrypted laptops. Because the laptops were not purchased pursuant to Horizon’s procurement process, the IT Department did not know they had not been encrypted.

This settlement sends two messages: 1) Don’t forget that State AGs can enforce HIPAA violations; and 2) It is important that the IT department issue mobile devices, including laptops and phones, so it can keep track of the devices, make sure they are encrypted and updated with security tools as necessary, and can remote wipe them in the event they are lost or stolen.

This post is also being shared on our Data Privacy +Security Insider blog. If you’re interested in getting updates on developments affecting data privacy and security, we invite you to subscribe to the blog.

Photo of Linn Foster Freedman Linn Foster Freedman

Linn Freedman is chair of the firm’s Data Privacy + Security Team. She is also an active member of firm’s Health Law Group, education practice, Environmental + Utilities Group, Insurance + Reinsurance Group, and Business Litigation Group. Her practice focuses on data privacy…

Linn Freedman is chair of the firm’s Data Privacy + Security Team. She is also an active member of firm’s Health Law Group, education practice, Environmental + Utilities Group, Insurance + Reinsurance Group, and Business Litigation Group. Her practice focuses on data privacy and security law, responses to data breaches, compliance with federal and state privacy and security laws, breach notification laws, and assisting clients with regulatory investigations.

Ms. Freedman is experienced in providing counsel to health care organizations, Regional Health Information Organizations, and privacy and security issues related to interoperability of electronic health records. She has litigated complex cases, including privacy cases, and class action data breach litigation in state, federal, and appellate courts, government investigations, and serves as general counsel of the Rhode Island Quality Institute. Read her full rc.com bio here.

Read more about Linn Foster FreedmanEmail
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  • Posted in:
    Health Care and Life Sciences
  • Blog:
    Health Law Diagnosis
  • Organization:
    Robinson & Cole LLP
  • Article: View Original Source

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