How Cyber Secure is Your Self Funded Plan?

Self-Funded Insurance plans are not immune from the many data breaches that have been occurring in the last several years. Not only has the number of breaches increased, but the level of sophistication used by hackers to steal date has also increased. Preventing a breach requires diligence but the alternative can be detrimental to an organization.

So what does an insurance plan do to help protect itself?

Because all plans have access to PHI (personal health information) and PII (personal identifiable information) they should understand the state and federal laws surrounding the privacy and security of participants PHI and PII. Health and welfare plans are subject to HIPAA (Health Insurance Portability and Accountability Act) and the HITECH (Health Information Technology for Economic and Clinical Health) Act. In addition, organizations that hold Massachusetts residents’ personal information must comply with 201 CMR 17.00, the Massachusetts data security law. Using secure email and other secure websites to transmit data will help encrypt data sent between parties. While plans are not responsible for personal information sent to them electronically by plan participants, it’s a best practice to offer a portal or other secure method for receiving sensitive data.

They should also be sure that their partner service providers, which include the TPA or ASO carrier, broker, consultant and stop loss carrier, carry cyber liability coverage and should be able to show proof of that coverage.

If something does go wrong, being prepared makes a big difference.

A plan can design a strong security or a formal incident–response plan prior to any incident. This can help cut down on the average response time and cost of a data breach.

Also, plans should consider buying Cyber Liability insurance coverage which will pay the policyholder’s notification cost, which can be quite steep. In addition, should an individual ever sue or seek financial damages in connection with a data breach, cyber liability insurance provides defense, settlement and judgement costs. Once a cyber -liability policy is triggered, the insurance company can provide the policyholder with access to experts to help resolve the situation, whether it be halting a breach in progress or help in the often complex notification process.


Contact Block (Blog)

Recent Comments

    Newsletter Signup

    Signup to start receiving the latest newsletters from StopLoss right to your email.
    Stay up to date on insurance trends and insights.

    Back to Top

    In 2011, the top 5 most expensive medical conditions treated in US hospitals were: Septicemia, Osteoarthritis, Complication of device, implant or graft, Liveborn, and Acute myocardial infarction

    From 2010 to 2013, the number of claims that were individually $1 million or above rose by 1,000%

    In 2017 approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape.

    In 2014, 98% of large firms (= 200 Workers) offer 1+ wellness programs to their employees.

    The most costly 1% of patients account for 20% of national health expenditures – accruing average annual expenses of nearly $90,000 per person.

    6% of firms offering fully-insured plans report they intend to self-insure because of Obamacare.

    In 2014, PPO plans remained the most common plan type, enrolling 58% of covered workers.

    In 2012, 93% of businesses with 5,000+ employees and 80% of companies with 1,000-4,999 employees were self-funded

    Massachusetts has the third-highest prevalence of self-funded insurance in the small-group market (Fewer than 50 employees).

    In 2013, the average deductible was $2,906 for individuals selecting plans from marketplaces. This compares with average deductibles of $1,135 for an individual with employer coverage.

    In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage, up 5% and 4% respectively from 2012.

    From 2010 – 2013, cancer followed by chronic/end stage renal disease and leukemia accounted for the top 3 costliest illnesses.