If you are one of the many businesses licensed by the New York Department of Financial Services (DFS), and cannot avail yourself of the (very) limited exemptions, you must be ready for the first compliance transition date for the stringent DFS cybersecurity regulations – August 28, 2017.

Just in case you’d forgotten, the DFS cybersecurity regulations became effective March 1, 2017 and you can refresh your memory here. Continue Reading Are You Ready for the New York August 28th Compliance Deadline?  

If you are a retailer with locations in New Jersey, you will need to review your procedures in anticipation of a new law effective October 1, 2017. 

New Jersey Governor Chris Christie has signed the Personal Information Privacy and Protection Act (we can now add #PIPPA to the alphabet soup of privacy acronyms…..), which limits the ability of retailers to collect PII scanned from customer driver’s licenses and identification cards and restricts the usage of any PII collected for the purposes identified in the Act.

Within recent years, retailers have commonly started a practice of scanning the barcodes on customer ID cards to verify the authenticity of an ID presented, verify identity when credit cards are used, or to prevent and control fraudulent merchandise return practices (or to identify consumers who abuse return policies).

Under PIPPA, retailers will only be permitted to scan ID cards to:

  • Verify the card’s authenticity or the person’s identity, if the customer pays for goods or services with a method other than cash; returns an item; or requests a refund or exchange.
  • Verify the customer’s age when providing age-restricted goods or services to the customer.
  • Prevent fraud or other criminal activity if the person returns an item or requests a refund or an exchange and the retailer uses a fraud prevention company or service.
  • Establish or maintain a contractual relationship.
  • Record, retain, or transmit information as required by state or federal law.
  • Transmit information to a consumer reporting agency, financial institution, or debt collector to be used as permitted by federal laws, including the Fair Credit Reporting Act, Gramm-Leach-Bliley Act, and Fair Debt Collection Practices Act.
  • Record, retain, or transmit information by a covered entity under HIPAA and related regulations.

PIPPA prohibits retailers from sharing the information with marketers or other third parties that are unknown to consumers.   It is unlikely that an online privacy notice describing sharing of scanned ID information with third parties would comply with PIPPA.  In-store notice of any such practices will likely be required.

The big “however” in this legislation is the restrictions on retention of the information when collected for the permitted purposes.  Under PIPPA businesses cannot retain information related to how the customer paid for the goods, whether the customer returned an item or requested a refund, and cannot store ages.   Retailers will only be permitted to collect the customer’s name, address, and date of birth; the issuing state; and the ID card number.    Any of this information collected from scanned ID cards Is required to be “securely stored” and PIPPA makes it clear that any security breach of this information is subject to New Jersey’s data breach notification law and must be reported to any affected individual and the New Jersey State Police.

And there are penalties.   PIPPA provides civil penalties of $2,500 for a first offense, and $5,000 for any subsequent offices.   Further the law allows for “any person aggrieved by a violation” to bring an action in NJ Superior Court to recover damages.

 


Decisions you make when founding and/or investing in an insurtech venture can dictate your regulatory obligations, tax liability, operational structure and, ultimately, profitability.

Here are five seemingly simple questions to ask when launching an insurtech venture (and do not miss question #3): Continue Reading Five Questions for Investors in Insurtech

Oregon’s legislature recently expanded the scope of statutory consumer protections by passing a bill to amend the state’s Unlawful Trade Practices Act (the “Act”). Recently, Oregon’s Governor Kate Brown signed H.B. 2090 into law after near unanimous passage by state lawmakers. The bill is particularly notable because it squarely targets online commerce and imposes liability on businesses for publishing false or misleading online privacy policies. Continue Reading Oregon Ramps up State Consumer Protections in an Era of Deregulation

In another example of increased restriction on the rights of non-U.S. Citizens, last week the Department of Homeland Security (“DHS”) published a policy memorandum limiting the privacy rights of immigrants and foreign nationals under the Federal Privacy Act of 1974.  This new guidance was issued to bring DHS policy in line with President Trump’s January 25 executive order.

The Privacy Act was established to govern the collection, maintenance, use and dissemination of personally-identifiable information maintained by federal agencies.  The Privacy Act, with specific exceptions, prohibits disclosure of such records without the consent of the individual.  It also provides individuals a means to access and amend their records.

Previous DHS guidance stated that such personally-identifiable information would be treated the same, regardless of citizenship.  However, consistent with the January 25 executive order, the new guidance provides that immigrants and nonimmigrant foreign nationals may not utilize these provisions and may only access their information through a request made pursuant to the Freedom of Information Act (FOIA).  Additionally, they may not request amendments of their records.  Furthermore, in connection with the new guidance, DHS stated that it permits the sharing of such information about immigrants and nonimmigrant foreign nationals from agency records with federal, state and local law enforcement.

In response to the current Administration’s “citizen-centric” policies, we are seeing an increased interest in applications for naturalization by U.S. Lawful Permanent Residents.

Originally posted in Mintz Levin’s Immigration Law Blog on May 2, 2017

After a quiet winter there has been significant activity in state legislatures to enact, strengthen or clarify their data breach notification statutes. The latest happenings are summarized below and we have updated our “Mintz Matrix” to reflect these new and pending laws.  Continue Reading States Take Action! New Mexico, Tennessee and Virginia Pass New Data Breach Legislation

At last week’s Health Care Compliance Association’s annual “Compliance Institute,”  Iliana Peters, HHS Office for Civil Rights’ Senior Advisor for HIPAA Compliance and Enforcement, provided a thorough update of HIPAA enforcement trends as well as a road map to OCR’s current and future endeavors.

Continuing Enforcement Issues

Ms. Peters identified key ten enforcement issues that OCR continues to encounter through its enforcement of HIPAA.  Do any of them look familiar to you? These issues include:

  1. Impermissible Disclosures. HIPAA’s Privacy Rule prohibits covered entities and business associates from disclosing PHI except as permitted or required under HIPAA. Impermissible disclosures identified by Ms. Peters all center on the need for authorization, and include:
    • Covered entities permitting news media to film individuals in their facilities prior to obtaining a patient’s authorization.
    • Covered entities publishing PHI on their website or on social media without an individual’s authorization.
    • Covered entities confirming that an individual is a patient and providing other PHI to reporters without an individual’s authorization.
    • Covered entities faxing PHI to an individual’s employer without the individual’s authorization.
  2. Lack of Business Associate Agreements. OCR continues to see covered entities failing to enter into business associate agreements.
  3. Incomplete or Inaccurate Risk Analysis. Under HIPAA’s Security Rule, covered entities are required to conduct an accurate and thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic PHI (ePHI). According to Ms. Peters, organizations frequently underestimate the proliferation of ePHI throughout their environment, including into systems related to billing, faxing, backups, and medical devices, among others.
  4. Failure to manage identified risks. HIPAA requires regulated entities to put in place security measures to reduce risks and vulnerabilities. According to the presentation, several OCR breach investigations found that the causes of reported breaches were risks that had previously been identified in a risk analysis but were never mitigated. In some instances, encryption was included as part of the remediation plan, but was never implemented.
  5. Lack of transmission security. While not required in all cases, HIPAA does require that ePHI be encrypted whenever it is deemed appropriate. The presentation identified a number of applications in which encryption should be considered when transmitting ePHI, including email, texting, application sessions, file transmissions (e.g., FTP), remote backups, and remote access and support services (e.g., VPNs).
  6. Lack of Appropriate Auditing. HIPAA requires the implementation of mechanisms (whether hardware, software or procedural) that record and examine activity in systems containing ePHI. HIPAA-regulated entities are required to review audit records to determine if there should be additional investigation. The presentation highlighted certain activities that could warrant such additional investigation, including: access to PHI during non-business hours or during time off, access to an abnormally high number of records containing PHI, access to PHI of persons for which media interest exists, and access to PHI of employees.
  7. Patching of Software. The use of unpatched or unsupported software on systems which contain ePHI could introduce additional risk into an environment. Ms. Peters also pointed to other systems that should be monitored, including router and firewall firmware, anti-virus and anti-malware software, and multimedia and runtime environments (e.g., Adobe Flash, Java, etc.).
  8. Insider Threats. The presentation identifies insider threats as a continuing enforcement issue. Under HIPAA, organizations must implement policies and procedures to ensure that all members of its workforce have appropriate access to ePHI and to prevent those workforce members who do not have access from obtaining such access. Termination procedures should be put in place to ensure that access to PHI is revoked when a workforce member leaves.
  9. Disposal of PHI. HIPAA requires organizations to implement policies and procedures that ensure proper disposal of PHI. These procedures must guarantee that the media has been cleared, purged or destroyed consistent with NIST Special Publication 800-88: Guidelines for Media Sanitization.
  10. Insufficient Backup and Contingency Planning. Organizations are required to ensure that adequate contingency planning (including data backup and disaster recovery plans) is in place and would be effective when implemented in the event of an actual disaster or emergency situation. Organizations are required to periodically test their plans and revise as necessary.

Upcoming Guidance and FAQs

OCR also identified upcoming guidance and FAQs that it will use to address the following areas:

  • Privacy and security issues related to the Precision Medicine Initiative’s All of Us research program
  • Text messaging
  • Social media
  • Use of Certified EHR Technology (CEHRT) & compliance with HIPAA Security Rule (to be release with the Office of the National Coordinator for Health Information Technology (ONC))
  • The Resolution Agreement and Civil Monetary Penalty process
  • Updates of existing FAQs to account for the Omnibus Rule and other recent developments
  • The “minimum necessary” requirement

Long-term Regulatory Agenda

The presentation also identifies two long-term regulatory goals to implement certain provisions of the HITECH Act. One regulation will relate to providing individuals harmed by HIPAA violations with a percentage of any civil monetary penalties or settlements collected by OCR, while the second will implement a HITECH Act provision related to the accounting of disclosures of PHI.

Audit Program Status

The presentation discussed the current status of OCR’s audit program. As we have previously discussed, OCR is in the process of conducting desk audits of covered entities and business associates. These audits consist of a review of required HIPAA documentation that is submitted to OCR. According to Ms. Peters, OCR has conducted desk audits of 166 covered entities and 43 business associates. Ms. Peters also used the presentation to confirm that on-site audits of both covered entities and business associates will be conducted in 2017 after the desk audits are completed. We will continue to follow and report on developments in the audit program.

Commentary

The list of continuing enforcement issues provides covered entities and business associates with a helpful reminder of the compliance areas that are most likely to get them in compliance trouble. Some of the enforcement issues may require HIPAA-regulated entities to revisit decisions that they previously made as part of a risk analysis. Transmission security (#5, above) is an example of such an area that may warrant reexamination. In the past, encrypting data was often too expensive or too impracticable for many organizations. However the costs of encryption have decreased while it has become easier to implement. A covered entity or business associate that suffers a breach due to transmitting unencrypted PHI over the internet will likely garner little sympathy from OCR going forward. The presentation is also notable for the long list of guidance and FAQs that OCR will be publishing, as well as their plan to issue regulations to address changes ushered in by the HITECH Act that were not captured by the 2013 Omnibus Rule. These regulations, particularly the regulations related to accounting for disclosures of PHI, could have a far-reaching impact on how covered entities and business associates comply with HIPAA in the future.

We are anxiously waiting to learn the fate of the data breach notification statute recently passed by state lawmakers in New Mexico. The bill remains on the desk of the governor who has until the end of the week to sign the legislation into law. If she does, New Mexico will join 47 other states (along with the District of Columbia, Puerto Rico, and the Virgin Islands) to impose at least some obligations on persons or entities holding personal information in the wake of a security incident.  We may need to update the Mintz Matrix soon. Continue Reading Better Late Than Never: New Mexico on the Cusp of Enacting Data Breach Notification Statute

Since September, the Mintz Levin Privacy Webinar Series has focused on the upcoming EU General Data Protection Regulation (GDPR) to help businesses understand the reach and scope of the GDPR and prepare for the potentially game-changing privacy regulation. The GDPR will affect how US businesses handle and process personal data originating in the EU and may require changes to business process.

Access, Correction and Erasure: How to Minimize the Burden (2/16/2017)

This webinar, the sixth and final in our EU General Data Protection Regulation Series, considers companies’ obligations to give individuals access to their data and to correct or erase it.  We explore the new data portability requirements. The webinar concludes with some suggestions on how to make these requirements less burdensome.

Transferring Data from the EU (1/12/2017)

This webinar, the fifth in our EU General Data Protection Regulation Series, explores the ways in which the Regulation creates new avenues for data transfers, and narrows others. In particular, we consider sector-specific Commission decisions, privacy seals/certifications, the exception for non-repetitive, limited transfers, and the outlook for BCRs and Model Clauses.

Data Protection Officers: Do You Need One? (12/15/2016)

This webinar, the fourth in our EU General Data Protection Regulation Series, examines the criteria that dictate whether or not your organization needs to appoint a Data Protection Officer. We discuss the role of the DPO, the significance of the “independence” requirement, and the qualifications required to hold the position.

Good-bye to the Cure-all: The New Rules on Consent (11/10/2016)

This webinar, the third in our EU General Data Protection Regulation Series, reviews the new restrictions on relying on user consent to data processing and data transfers. In addition to the general “imbalance of power” problem, we consider the implications of the Directive on unfair terms in consumer contracts and changes that may need to be made to terms of use and privacy policies when dealing with consumers.

Accountability, Data Security, Data Impact Assessments and Breach Notification Requirements (10/13/2016)

This webinar, the second in our EU General Data Protection Regulation Series, focuses on the data security and accountability requirements of the Regulation, including reviews and documentation of internal policies and procedures and data impact assessments. We also explore the breach notification requirements and actions that companies can take in advance to mitigate the need for breach notification.

One-Stop Shopping Mall? The New Regulatory Structure (9/14/2016)

This webinar, the first in our EU General Data Protection Regulation Series, explains the powers and role of the new European Data Protection Board, how a “lead supervisory authority” will be designated for each controller, and how the lead supervisory authority will interact with other interested supervisory authorities. We also look at the complaint process from the point of view of the individual who is claiming a violation, and explore the likely role that will be played by public interest organizations bringing group complaints.

“Don’t make promises that you don’t intend to keep” is an admonishment received by every child and delivered by every parent. This pithy maxim is equally applicable to consent orders entered into with regulatory authorities. Indeed, Upromise’s failure to abide by it is costing the company $500,000 in the form of a civil penalty from the Federal Trade Commission (FTC). Continue Reading More Broken Privacy Promises from Upromise: Key Takeaways From Upromise’s Latest Settlement with the FTC