FTC Chairwoman Edith Ramirez Steps Down

The Federal Trade Commission (“FTC”) recently announced that FTC chairwoman Edith Ramirez will be stepping down effective February 10, 2017. Ms. Ramirez guided the agency through a period of significant enforcement activity, particularly in the areas of cybersecurity and consumer privacy. President-elect Donald Trump will now have the opportunity to fill three vacancies at the federal consumer protection agency.

At the start of 2016, the FTC announced its intention to increase its cybersecurity enforcement authority, and has done just that. The broad power allocated to the FTC under Section 5 of the FTC Act provides it the unique opportunity to regulate private actors, both in handling of data and responding to a data breach.

The FTC has gone after a wide range of data security related private offenders in 2016 including: digital advertising companies (Turn Inc.), medical service providers (LabMD, Inc.), and telemarketing operations (Data Guri LLC). Just last week, the FTC filed a lawsuit against internet router manufacturer, D-Link Corporation, for failure to take proper steps to protect their devices, leaving thousands of customers vulnerable to hackers.

In addition to lawsuits, the FTC has demonstrated its cyber “watchdog” status in 2016 through issuance of: warnings against ransomware, guidelines on background screening, and a report discussing “big data”.

The FTC is headed by five Commissioners, nominated by the President and confirmed by the Senate, with one chosen by the President to be Chairperson. No more than three Commissioners can be of the same political party. Following Ms. Ramirez’ departure, only two Commissioners remain: Maureen K. Ohlhausen (R) (term expires Sept. 25, 2018) and Terrell McSweeny (D) (term expires Sept. 25, 2017). Thus, Mr. Trump will be able to appoint 2 persons from his party and a Democrat.

While President-elect Trump’s stance on cybersecurity is still unclear – Mr. Trump recently announced that former New York City Mayor Rudi Giuliani will head his cybersecurity advisory team – what is clear is that given the number of FTC vacancies, Mr. Trump will have the opportunity to impact the direction of the FTC, including its regulation of cybersecurity and enforcement activity.

The White House’s Revisions to its Breach Response Policy For Federal Agencies and Departments Also Affect Contractors

On January 3, 2017, the Obama Administration issued a memorandum to all executive departments and agencies setting for a comprehensive policy for handling breaches of personally identifiable information (the “Memorandum”), replacing earlier guidance. Importantly, the Memorandum also affects federal agency contractors as well as grant recipients.

The Memorandum is not the first set of guidance to federal agencies and departments for reporting breaches of personally identifiable information (PII), but it establishes minimum standards going forward (agencies have to comply within 180 days from the date of the Memorandum). The Memorandum makes clear that it is not setting policy on information security, or protecting against malicious cyber activities and similar activities; topics related to the recent fiery debates concerning the 2016 election results and Russian influence.

The Memorandum sets out a detailed breach response policy covering topics such as preparedness, establishing a response plan, assessing incident risk, mitigation, and notification. For organizations that have not created a comprehensive breach response plan, the Memorandum could be a helpful resource, even for those not subject to it. But it should not be the only resource.

Below are some observations and distinctions worth noting.

  • PII definition. Unlike most state breach notification laws, the Memorandum defines PII broadly: information that can be used to distinguish to trace an individual’s identity, either alone or when combined with other information that is linked or linkable to a specific individual. So, for example, the notification obligation for a federal contractor will not just apply if Social Security numbers or credit card numbers have been compromised.
  • Breach definition. Breaches are not limited phishing attacks, hackings or similar intrusions. They include lost physical documents, sending an email to the wrong person, or inadvertently posting PII on a public website.
  • Training. Breach response training must be provided to individuals before they have access to federal PII. That training should advise the individuals not to wait for confirmation of a breach before reporting to the agency. A belief (or hope) that one will find that lost mobile device should not delay reporting.
  • Required provisions in federal contracts. Federal contractors that collect or maintain federal PII or use or operate an information system for a federal agency must be subject to certain requirements by contract. The Memorandum requires agencies to update their contracts with contractors to ensure the contracts contain certain provisions, such as requiring contractors to (i) encrypt PII in accordance with OMB Circular A-130, (ii) train employees, (iii) report suspected or confirmed breaches; (iv) be able to determine what PII was or could have been accessed and by whom, and identify initial attack vectors, and (v) allow for inspection and forensic analysis. Because agencies must ensure these provisions are uniform and consistent in all contracts, negotiation will be difficult. The Federal Acquisition Regulatory Council is directed to work the Office of Management and Budget to promptly develop appropriate contract clauses and regulatory coverage to address these requirements.
  • Risk of harm analysis. Agencies will need to go through a complex risk of harm analysis to determine the appropriate breach response. Notably, encryption of PII is not an automatic exception to notification.
  • Notification. The rules for timing and content of breach notification are similar to those in many of the state breach notification laws. The Memorandum also advises agencies to anticipate undeliverable mail and to have procedures for secondary notification, something not clearly expressed in most state notification laws. The Memorandum also suggests website FAQs, which can be more easily updated and tailored. Agency heads have ultimate responsibility for deciding whether notify. They can consider over-notification and should try to provide a single notice to cover multiple notification requirements. They also can require contractors to provide notification following contractor breaches.
  • Tabletop Exercises. The Memorandum makes clear that testing breach response plans is essential and expressly requires that tabletop exercises be conducted at least annually.

Federal contractors and federal grant recipients that have access to federal PII will need to revisit (or develop) their own breach response plans to ensure they comply with the Memorandum, as well as the requirements of the applicable federal agency or department which can be more stringent. Of course, those plans must also incorporate other breach response obligations the organizations may have, whether those obligations flow from other federal laws (e.g., HIPAA), state laws, or contracts with other entities. Putting aside presidential politics, cybersecurity threats are growing and increased regulation, enforcement and litigation exposure is likely.

FTC Settles Claim of False Representations by Digital Advertising Company

The Federal Trade Commission (“FTC”) has entered into a Consent Order to resolve a complaint brought against a digital advertising company, Turn Inc. Turn provided advertisers with the ability to engage in targeted advertising by tracking consumer’s activities or characteristics to deliver ads tailored to the consumer’s interests.  The FTC alleged that Turn violated federal law by falsely representing to consumers the extent to which consumers could restrict the company’s tracking of their activities and the extent to which Turn’s opt-out applied to mobile app advertising.

According to the FTC Complaint, Turn misrepresented that consumers could prevent Turn’s tracking by blocking or limiting cookies. The FTC claimed that even if a consumer deleted cookies or reset their device, Turn would nonetheless be able to recognize the users by cross-referencing other data to which it had access.

The proposed Consent Order requires, among other things, that Turn: 1) cease misrepresentations regarding what consumer information it collects and/or shares; 2) create an opt-out option that limits tracking by Turn; 3) post a “clear and conspicuous hyperlink” on its website that will take consumers to another page to explain what information Turn collects and uses for targeted advertising; 4) describe on its web site the technologies and methods it uses for targeted advertising; and 5) retain documents relating to compliance for five years. The Consent Order will become final after a 30-day public comment period. See the analysis of the FTC’s Consent Order.

The Consent Order demonstrates the significant and ongoing focus by the FTC on the accuracy of disclosures and statements regarding consumer information. This includes disclosures and statements made in website privacy statements and terms of use. Companies are advised to review their communications with customers and potential customers to be sure those communications are aligned with the companies’ practices and procedures. Such an assessment would help to reduce the possibility of an FTC complaint.

Thomas Bossert Selected to be President-elect Trump’s Top Counterterrorism Advisor

As we’ve noted previously, President-elect Trump’s campaign was light on details about his plans to address cybersecurity. However, his announcement yesterday that Thomas P. Bossert will serve as his assistant for homeland security and counterterrorism, a position equal in status to national security advisor according to the transition team, may offer greater insight into the President-elect’s intentions and plans for cybersecurity and related issues.

BossartMr. Bossert, who served as a top homeland security advisor to the latter President Bush, and who is currently the president of a risk management consulting firm that provides services to companies and governments, noted in the statement announcing his appointment:

We must work toward cyberdoctrine that reflects the wisdom of free markets, private competition and the important but limited role of government in establishing and enforcing the rule of law, honoring the rights of personal property, the benefits of free and fair trade, and the fundamental principles of liberty.

Mr. Bossert’s statement – in particular the portion regarding the “limited role of government” – suggests that the Trump Administration may be slow to pursue new federal cybersecurity statutes and regulations, and that it may give federal agencies, such as the FTC, FBI, and DHS, shorter leashes to enforce existing cybersecurity laws. This statement is consistent with Mr. Bossert’s past advocacy of utilizing a free market approach to cyber insurance, instead of a government-backed program.

That said, given the prominent role cybersecurity issues have played in the lead-up to and wake of the presidential election, and the increased incidence in recent years of cyberattacks against high-profile businesses and government entities, the Trump Administration could face enormous political pressure to take action on the cybersecurity front. One way Mr. Trump may respond to that pressure is by investing heavily in measures designed to protect public and private organizations in the U.S., including private businesses, from cyber conduct perpetuated by foreign actors.  Mr. Bossert, who has warned that businesses “don’t have enough money to compete with a motivated Chinese intelligence community data collection apparatus that can spend billions when [businesses] can only spend millions,” would likely agree with such an approach. The business community should bear in mind, though, that an effective plan for disrupting international interference with U.S. business affairs will likely require some degree of domestic regulation.

Additionally, it is worth noting state and local governments have not waited for the federal government to act, and have legislated in a number of areas concerning cybersecurity. Examples include stringent regulations in California and Massachusetts designed to safeguard information systems and personal data. More recently, New York State is poised to finalize new, stringent cybersecurity regulations, potentially prompting other states to do the same. Indeed, other states and cities have already signaled their intent to pursue activist immigration and climate change agendas in response to what they believe the Trump Administration’s agenda will be.

We will keep you posted as Mr. Trump’s cybersecurity policies, and state and local responses thereto, come into clearer view.

DFS’ Proposed Cybersecurity Regulation Edges Closer to Becoming Final Following Public Hearing

The New York State Assembly Committee on Banks held a public hearing on December 19, 2016, receiving testimony about both the benefits and challenges of a recently proposed regulation to address the growing threat posed by cyber-attacks on banks, insurance companies and most other entities which are regulated by the Department of Financial Services (DFS). The proposed regulation was initially published by DFS on September 28, 2016 and since that time has been subject to a public comment period before final issuance.

The proposed regulation, if adopted, is likely to require most DFS-regulated organizations to establish a cybersecurity program, including the adoption of policies and procedures, the reporting to DFS of all successful and unsuccessful cybersecurity attacks, the appointment of a chief information security officer to oversee cybersecurity plans, and the inclusion of certain required provisions in third-party service provider agreements. We have outlined the proposed regulation in more detail here.

Representatives from community banking and other relatively small DFS-regulated entities testified during the hearing that the proposed regulation is a “one size fits all” solution that are too onerous for small to mid-sized entities, fail to coordinate with existing federal cyber requirements, and seek to focus on a national security threat that should be addressed exclusively at the federal level. They also noted that the reporting requirements under the proposed regulation are particularly onerous in that reporting would be required for successful and unsuccessful cybersecurity attacks, which will further contribute to additional regulatory compliance costs that will be passed on to the consumer, resulting in higher consumer prices and possibly reduced consumer choice in some markets. Other witnesses claimed the proposed regulation does not go far enough, calling for more comprehensive and prescriptive requirements.  DFS did not testify at the hearing.

Meanwhile, DFS has indicated informally that it intends to publish a revised regulation in the coming weeks, and that, in so proceeding, will among other things extend the proposed regulation’s January 1, 2017 effective date. DFS has not signaled — either informally or formally – what other changes it intends to make the in the revised regulation.   It is possible the testimony from today’s public hearing could influence some of the changes.

We will report on this blog once DFS publishes its revised regulation. We continue to urge DFS-regulated companies to carefully review their current programs, policies, and procedures to understand their current cyber footing and evaluate what action, if any, they will need to take once the revised regulation is adopted.

Data Analytics Enables Health Plans to Predict When Employees Need Health Services and For How Long

We know that data analytics is being used to influence a wide range of things such as the pair of shoes one might want to buy or what news is “trending” on Facebook. Similar tools are being applied to employer-sponsored group health plans. According to a recent HealthcareITnews article, vendors such as Advanced Plan for Health (APH) are using predictive modeling functionality to support population health management. The ability to better anticipate and manage plan costs while shaping plan design to meet the needs of plan participants likely will be very appealing to plan sponsors, but employers should think through implementation carefully.

According to the article, these products (APH calls its product “Poindexter”) can make predictions about when certain health events are likely to occur (such as an ER visit), or forecast the nature of the services to be provided (such as the length of the participant’s hospital stay). We will leave to the data scientists to describe how this sausage is actually made, but here is how it is summarized in the article:

Currently, the Poindexter engine calculates care gaps and predicts the likelihood of hospital admissions, as well as readmissions, 6 to 12 months in advance for any given patient population — typically covered lives in a self-insured employer’s health plan. The tool also examines data from claims, pharmacy and clinical sources, benchmarking against real-world health data adjusted for comparable demographics, geography and industry of the employer.

Poindexter assigns risk scores to individuals within that population – identifying people whose health profile suggests elevated risk. With this information, case managers can improve outcomes and lower costs when they help patients avoid catastrophic events by improving their health through timely interventions.

One thing seems clear about this process – there’s a lot of data, a lot of very sensitive data, involved that is coming from a number of different sources. Certainly, data privacy and security compliance, yes this means HIPAA, must be taken into account by employers when considering whether and how to apply these analytical tools to their group health plans. Employer-sponsored wellness programs have raised similar issues as participants often must tender personal health information about themselves to take advantage of incentives under those programs.

Speaking of wellness programs, if analytics can predict and help employers better design their health plans, couldn’t the technology also be used to help prevent or put off more adverse and expensive health events. That is, in the course of “population health management,” would it be unreasonable to expect that a health plan that can reasonably anticipate or predict a significant health event would take some steps to try to prevent it from happening? Coupling analytics with traditional wellness programs, incentives perhaps could be more targeted to better steer participants toward healthier behaviors or to get care sooner and less expensively.

In the course of administering benefit plans with features like these, keeping protected health information anonymous may be easier said than done. Additionally, providing inducements can raise issues under HIPAA, the ACA, and the Equal Employment Opportunity Commission’s ADA and GINA regulations, which also have confidentiality protections. So, as technologies like analytics emerge to power employee benefit plans, particularly health plans, they need to be run through the array of law and regulations that apply to those plans.

Claim For Violation of Wiretap Act Not A Slam Dunk under Spokeo

A motion to dismiss has been filed in a California case filed by a New York woman who claims that the National Basketball Association’s Golden State Warriors violated the Electronic Communications Privacy Act (the “Wiretap Act”), 18 U.S.C. § 2510, et seq., by distributing a mobile content app that invades users’ privacy by turning on a device’s microphone and eavesdropping on the audio it picks up. Satchell v. Sonic Notify Inc., et al., 16-c v-04961 (N.D. Cal.)

The app uses the phone’s microphone to track the user’s location by picking up on sonic beacons but fails to warn users that it is doing so and that it is picking up nearby conversations in the process.  The beacons then trigger the delivery of custom-tailored content, promotions, and advertisements directly to users’ smartphones.

The motion, filed by the Warriors and the company that operates the beacons, claims that Plaintiff has not alleged an injury in fact, as required by the Supreme Court’s recent decision in Spokeo v. Robins, 136 S. Ct. 1540 (2016).  According to defendants, Plaintiff’s sole allegation of injury is that there was wear and tear on her phone and that her phone lost battery power.

Defendants also assert that Plaintiff misunderstands how the app operates stating that the beacon technology does not “record” or “intercept” anyone’s communications in that any such recordings remain on the user’s phone and are never transmitted beyond the device to any Defendant. Thus, Defendants could not have committed an illegal “intercept[ion]” within the meaning of the Wiretap Act, which requires an “acquisition of the contents” of an “oral communication.”

Plaintiff responded to the motion by arguing that Defendants misapply Spokeo.  Plaintiff contends that she alleges a substantive (rather than merely procedural) violation of the Wiretap Act, stating that the Wiretap Act guards against intangible harms that are firmly rooted in common-law privacy torts and protects substantive privacy interests that Congress explicitly sought to protect in enacting the Wiretap Act. Thus, taking the position that history and the judgment of Congress establish that the invasion of privacy Plaintiff suffered is a concrete injury sufficient to confer Article III standing, Plaintiff argues the Defendants’ motion should be denied.

We will continue to keep our eye on the ball in this case and report back once the court rules on Defendants’ motion.

Study Finds Companies May Do Too Much For Data Breach Victims

A recent study at the University of Arkansas suggests that organizations should avoid doing too much for individuals affected by a data breach. That is, when organizations provide compensation to breach victims that exceeds the victims’ expectations it could backfire. Those victims may become suspicious, thinking the organization has something to hide, which could have an adverse impact on the victims’ willingness to continue doing business with the organization.

If you have gone through a data breach, then you know the anxiety organizations experience throughout the process. Among other things, they have to quickly secure their information systems, investigate how the incident happened, and coordinate with law enforcement and other agencies. But perhaps the biggest concern is what to do for the individuals affected by the breach beyond providing breach notification.

Except for California and Connecticut which require credit monitoring and related services be provided following breaches involving certain personal information, most state data breach notification statutes only require that affected persons be given notice of the breach. Yet, when considering their breach response, many organizations think about what to do for affected persons regardless of state law requirements. In many cases, companies wind up offering credit monitoring and related remediation services, but some companies also will provide compensation of some kind.

The study found, however, that when compensation (e.g., gifts, discounts, free memberships, etc.) exceeds what the affected persons expected would be provided, those persons are more likely to become suspicious, rather than appreciative. If affected persons are suspicious they may not only be less likely to associate with the organization or continue to buy its products or services, they may be more likely to inquire more deeply about the incident or take legal action.

When considering breach response strategies, therefore, organizations should think more carefully about the kinds of benefits or compensation to offer to persons affected by the breach. We have emphasized here many times the importance of developing a breach response plan and practicing that plan. That process should include thinking through different remediation strategies, including what, if any, credit monitoring services or compensation the organization would be prepared to offer in the event of a breach. A rash decision to provide robust compensation to affected persons, made in the heat of an actual breach, could be the wrong one, according to the study.

FTC Joins Other Agencies In Warning Organizations About Ransomware

Earlier this month, the Federal Trade Commission (FTC) blogged about How to defend against ransomware, and published Ransomware – A Closer Look in the “Tips and Advice” section of its website. This follows warnings from other federal agencies and law enforcement concerning this serious online threat to organizations, such as Dept. of Health and Human Services and the Federal Bureau of Investigation. The FTC’s guidance also follows a ransomware attack on a union pension plan and came at the same time as recommendations to the Department of Labor concerning cybersecurity. Organizations in all industries are exposed to this threat, particularly organizations that need data all the time to function, such as healthcare providers, professional service providers (e.g., legal and accounting services), financial service providers and others. From an FTC perspective, failing to take appropriate steps to prevent and address ransomware attacks could violate Section 5 of the FTC Act.

What is “ransomware” and how can we be attacked?

Ransomware is a type of malware that denies the affected organization access to its data, typically by encrypting it. Once the data is encrypted, the hacker who launched the ransomware attack notifies the organization that, in order to obtain a key to decrypt the data, it must pay a ransom, often in a cryptocurrency, such as Bitcoin.

According to the FTC’s article, most ransomware arrives through email phishing attacks that are carried out when someone at the organization clicks on a link or downloads a malicious attachment, allowing the malware to infect the system or device. Ransomware also can get on to an organization’s computer if a user visits a malicious or compromised website.

How can a ransomware attack affect our business?

Some of the effects will be obvious and others not so much. Ransomware locks your data while bad actors look to extract money from you in order to regain access. Such an attack can disrupt services to your customers and be costly to remediate. However, the attack also may have resulted in a breach of the security of your system triggering notification obligations to individuals whose personal information was accessed or acquired, or to your business partners for whom you maintain confidential information. If the malware is not competently and completely remediated, it can spread to other systems and equipment causing future attacks.

What should we be doing?

Prepare. Prepare. Prepare.

Confirm you have the right team. A key component of your team will be either your internal IT department or a third party vendor that provides IT services. However, these professionals are not always well versed in data security or the latest techniques used by the bad guys to access your systems. The IT department/third party may be saying “We got this.” But, while it is OK to trust, you should verify. And, if you are not sure, get help.

Secure your systems.  With the right team in place, there are a number of steps that should be taken to stop an attack before it happens:

  • Conduct a risk assessment and penetration test to understand your potential for exposure to malware. This includes understanding the websites visited by users on your systems and their other activities online.
  • Implement technical measures and policies that can prevent an attack, such as endpoint security, email authentication, regular updates to virus and malware protections, intrusion prevention software and web browser protection, and monitor user activity for unauthorized and high risk activities.

Make your workforce aware of the risks and steps they need to take in case of an attack. In many cases, users of an organization’s systems are unaware of these kinds of attacks and how they can occur. Education can be critical prevention tool:

  • Help users recognize phishing attacks and dangerous sits – don’t just say it, show them and do it regularly. It may help if you also explain that they can be victims too.
  • Instruct them on what to do immediately if they believe there may be an attack. This might include notifying the IT department, disconnecting their computer from the organization’s network, and other measures.
  • Also instruct them on what not to do. For example, deleting system files may make it more difficult if not impossible later on to forensically determine the source of the problem and what happened.

Maintain backups. The FTC advises, back up your data early and often, and keep backup files disconnected from your network. Organizations that can rely on backups to be up and running quickly without being forced to cooperate with (or pay) the ransomware attacker, are in a much better position to remediate the attack.

Develop and practice a “Ransomware Game Plan.”  Organizations should already have incident response plans that address a number of issues, including breaches of personal information. Some of the key components in such a plan may include the following:

  • Identify the internal team (e.g., CIO/CISO, General Counsel, CFO) and the allocation of responsibilities.
  • Identify the external team (e.g., insurance carrier, outside counsel, forensic investigator, public relations) and involve them in your planning processes before an attack happens.
  • Outline steps for business continuity during the attack, including use of backup files and new equipment, safeguarding systems, and communication to customers, employees and business partners, as necessary.
  • Strategy for involvement of law enforcement and other agencies as applicable, such as the FBI, Internal Revenue Service, or Office for Civil Rights. This includes making contacts before an attack, which may help expedite access to assistance in the event of an attack.
  • Assessment of and compliance with legal and contractual obligations, including notification obligations based on the nature and extent of the access to information.
  • Process for (i) practicing the plan with internal and external teams, and (ii) reviewing and updating the game plan, including after an incident to improve performance

Ransomware and similar forms of attacks on information systems are not going away. Organizations need to be prepared.

Pension Plan Suffers Cybersecurity Attack, ERISA Advisory Council Offers Cybersecurity Recommendations to DOL

Image resultIt has been reported that infamous bank robber, Slick Willie Sutton, once said, “I rob banks because that’s where the money is.” Data thieves, understandably, have a similar strategy – go where the data is. The retail industry knows this as it has been a popular target for payment card data. The healthcare and certain other industries do as well considering ransomware attacks have increased four-fold since 2015. But the retirement plan industry must also see that it too is a significant target – that’s where a lot of data is!

PR Newswire reported yesterday that the UFCW Local 655 Food Employers Joint Pension Plan is notifying participants that it suffered a ransomware attack. In general, a “ransomware” attack occurs when a hacker takes control of the victim’s information systems and encrypts its data, preventing the owner from accessing it unless the victim pays a sum of money, usually in the form of bitcoins. The data at risk in the UFCW Local 655 case included individuals’ names, dates of birth, Social Security numbers, and bank account information. Every retirement plan, including pension and 401(k) plans, maintains this and other data about current and former participating employees, and their surviving spouses and designated beneficiaries, as applicable.

The question is whether plan sponsors and third party service providers are doing enough to safeguard the treasure troves of data they maintain.

On November 10, the ERISA Advisory Council, a 15-member body appointed by the Secretary of Labor to provide guidance on employee benefit plans, shared with the federal Department of Labor some considerations concerning cybersecurity. The Council noted that it is not seeking to be prescriptive, nor is it providing an opinion on fiduciary duties concerning protection of data. However, it is hoping its considerations will be publicized and “provide information to the employee benefit plan community to educate them on cybersecurity risks and potential approaches for managing those risks.”

According to the Council, there are four major areas for effective practices and policies:

  • Data management.
  • Technology management.
  • Service provider management.
  • People issues.

This is a good list to work from. Consider, for example, the wide range of service providers that perform various services to retirement plans – record keepers, auditors, law firms, accountants, actuaries, investment managers, brokers, etc. These organizations access, use, maintain, and disclose vast amounts of personal information in the course of servicing their retirement plan customers. Do these organizations have sufficient safeguards in place? Do you know if they do? What does the services agreement say?

Obviously, services providers are not the only source of risk to retirement plan data. As the Council points out, there are other considerations for plans concerning cybersecurity, such as:

  • Know your data and assess your risk (how it is accessed, shared, stored, controlled, transmitted, secured and maintained).
  • Think of how you could and should protect it (e.g., applicable federal and state laws, NIST, HITRUST, SAFETY Act, and industry-based initiatives).
  • Protect it with appropriate policies and procedures and an overall strategy taking into account available resources, cost, size, complexity, risk tolerance, insurance, etc.

In most discussions about data security and employee benefit plans, HIPAA tends to loom large. While important, with respect to employee benefit plans, the HIPAA privacy and security regulations only reach health plans, not retirement plans. But, as noted above, data thieves want to go where the data is, and that includes retirement plans.