Health Net, a Woodland Hills, California-based managed healthcare provider realized that a missing hard drive contained protected health information (PHI). It affected 1.5 million customers, and 466,000 in Connecticut alone.

“The company reported the breach Wednesday to State Attorneys Generals offices in Arizona, Connecticut, New Jersey and New York. Health Net said it was beginning the data security breach notification process of sending out letters to its customers. The company said it expects to send notification

letters the week of Nov. 30.”, according to a SearchSecurity News article.

Connecticut Attorney General Richard Blumenthal comments: “My investigation will seek to establish what happened and why the company kept its customers and the state in the dark for so long,” Blumenthal said in a statement. “The company’s failure to safeguard such sensitive information and inform consumers of its loss — leaving them naked to identity theft — may have violated state and federal laws.”

Although disk encryption could not have prevented the drive from being lost it certainly could have prevented unsecured protected health information from being accessible to unauthorized individuals. Federal breach notification rules under HIPAA/ARRA/HITECH Act took effect in September, 2009, but will be start being enforced until February, 2010.

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