Health care provider EmblemHealth has agreed to pay $575,000 to the state of New York to settle allegations that it inadvertently disclosed the Social Security numbers of more than 81,000 people.

SSN printed on envelope

According to the New York Attorney General's Office, 81,122 EmblemHealth policyholders, including 55,664 New York residents, were sent a paper mailing with a label that included their Social Security number on it in October 2016. Normally, all mailings include a unique mailing identifier that is printed on the envelope, Attorney General Eric Schneiderman said in a press release announcing the settlement.

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An EmblemHealth spokesperson said in an email, “upon discovery of this issue, we immediately took action to identify affected members and put precautionary protective measures in place. We are committed to providing the best service to our customers and have worked closely with the attorney general to enhance our procedures and to give our members peace of mind.”

Comprehensive risk assessment ordered

In addition to the monetary penalty, the agreement requires EmblemHealth to implement a corrective action plan and conduct a comprehensive risk assessment.

“The careless handling of Social Security numbers is never acceptable,” Schneiderman said in the statement. “New Yorkers need to be able to trust that companies entrusted with their private information will guard it appropriately. This starts with good governance — which is why my office will continue to push for stronger security laws and hold businesses accountable for protecting their customers' personal data.”

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It's not the first time in recent years that Schneiderman has reached a settlement with the New York City-based health care provider that has 3.4 million members.

In 2014, EmblemHealth paid $1.2 million to settle allegations that the company's subcontractor issued 64 percent more denials of coverage for behavioral and substance abuse issues than it did in medical cases, allegedly in violation of New York's 2006 mental health parity law.

Kristen Rasmussen ([email protected]) is an Atlanta-based reporter for our sister publication, New York Law Journal, who covers health care, corporate legal departments and in-house attorneys.