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We have always been concerned about the confidentiality of medical information we receive in the course of our business. We maintain appropriate physical, electronic, and procedural safeguards to protect the privacy of medical and financial information of our customers. However, we have recently taken additional steps in this area that we would like to make you aware of.

In 1996 Congress passed and the President signed into law the Health Insurance Portability and Accountability Act. One aspect of this law was setting a floor of federal standards regarding the privacy of individually identifiable medical information. Although we are not a covered entity under this law, we feel the law had necessary and admirable aspects to it. We, therefore, have incorporated into our current business privacy practices many of the federal standards and in some areas we have gone beyond the minimum required of entities covered under the law.

We believe that:

• Medical claims and underwriting information should be treated as privileged information
• Care should be taken to protect the privacy of all medical information
• Care should be taken to protect the dignity of individuals referred to in medical information

In order to fulfill these beliefs, we have taken several actions.

We have trained our workforce and written protocols so that only the minimum information that is necessary to conduct our business will be requested or disclosed by our employees. Also, only people who are involved in performing the tasks involving medical information will be allowed access to that information. Care will be taken to assure that medical information is not inadvertently seen by unauthorized persons. We have a written privacy policy and code of ethics to which our employees are subject.

We have appointed a Privacy Coordinator to be responsible for all training of personnel, writing of policies and procedures, and handling questions and concerns from our employees as well as our clients.

Our clients will notice certain new privacy safeguards. Claimants may be asked for additional identifying information when they call in for claims status or coverage inquiries. Spouses will no longer be given medical information about a claimant and under some circumstances parents may need to get the consent of their minor children when inquiring about a claim. Also, all our client reports will be purged of identifying information that is customary but unnecessary to the object of the reports.

Some aspects that our clients may not be aware of, but are already implemented, and are important to this privacy policy are:

• Only dedicated fax machines have always been and will continue to be used when sending or receiving medical information so that outside personnel will not have access to this data.
• All paper files have always been and will continue to be kept in locked repositories.
• All electronic files have always been and will continue to be protected by passwords and other electronic safeguards.
• All printers in the claims and underwriting departments have always been and will continue to be used only by these departments.
• The claims and underwriting departments have never been and will continue not to be a thoroughfare for foot traffic. Traffic patterns have been modified so that there are no shortcuts through these departments.

We hope you, our clients, will be pleased with these steps we have taken and will notice a renewed dedication of our workforce to the confidentiality of your medical records.

We will be looking for additional steps we can take to be responsive to privacy concerns of our clients and their workforces. Please contact our Privacy Coordinator, Dana Wiser at 800-228-1803, extension 141 to make suggestions or to have any questions answered.