On April 5, 2011, Keller Grover filed a class action complaint against Health Net and IBM over their alleged loss of several server hard drives containing personal and medical information associated with approximately 1.9 million current and former Health Net insurance subscribers, including an estimated 845,000 California residents.
The lost personal and medical information is believed to be highly sensitive and includes subscribers’ names, addresses, health information, social security information, and financial information, potentially putting subscribers at risk of identity theft and other forms of injury.
The loss of the server drives was reported to Health Net by its data center operator, IBM, on January 21, 2011. Health Net then took nearly two months before it informed its subscribers and the public of the loss in a press release issued on March 14, 2011. Health Net also began sending letters to affected individuals on that same day.
In July 2014, the parties settled the class action that provided certain plaintiffs with reimbursements for identity theft losses, required Health Net to offer credit monitoring to all 2 million affected by the breach as well as insurance coverage. Further the settlement required Health Net to make changes to improve its physical and information security practices.