Managing sensitive company information is a shared responsibility across various departments, but HR teams play a crucial role because of their access to employee data for benefits administration.
Though every business has a duty to protect sensitive data through stringent cybersecurity measures, many don’t fully understand the vulnerabilities within their administration systems – or how to safeguard their security effectively.
Why Cybercriminals Place a High Value on Benefits Data
Employee benefits data is a prime target for cybercriminals, especially during open enrollment periods when a substantial volume of sensitive information is shared. Here’s why this data is valuable to cybercriminals:
Access to Personal Identifiable Information (PII)
Personal identifiable information, or PII, is highly sought by cybercriminals. This may include everything from passport details to names and addresses to banking information. Once this information is in the wrong hands, cybercriminals can use it to commit identity theft or financial fraud, exploiting the details for malicious purposes.
Unencrypted Financial Data
During benefits enrollment, sensitive financial data like direct deposit details or credit card information are often collected by HR systems. If cybercriminals gain access to these unsecured systems, they can use the financial data for authorized transactions, divert payments to their accounts, manipulate payroll deposits, and more.
In addition, stolen salary information can be used to alter tax withholdings or fraudulently claim tax refunds. They can also use credit card information to make unauthorized purchases or open new lines of credit under the employee’s name, ruining their credit and leading to significant expenses.
Leverage to Disrupt Business Operations
In addition to the harm to individuals, the theft of benefits data can be a risk to your business. Cybercriminals can use this information to execute sophisticated phishing attacks, impersonate employees or HR personnel, or disrupt business processes. Access to the underlying systems may also allow them to alter benefit selections or file fraudulent claims, resulting in considerable financial losses and a lengthy recovery process for your business.
Identifying Certain Risks in Benefits Administration Procedures
Traditional benefits administration processes can leave your business exposed to numerous vulnerabilities with employee and business data. Some of the key areas of concern for your benefits administration procedures include:
Data Breaches from Third-Party Vendors
Benefits administration often includes multiple third-party vendors that are privy to your system, including insurance providers, benefits brokers, and payroll services, all of which have access to sensitive data. While you may have robust cybersecurity measures internally, these protections don’t necessarily extend to your vendors. If a cybercriminal compromises a vendor’s security, it can create a trail to get to your business’s high-value, sensitive data.
Unsecured Benefits Platforms
Employee self-service portals are designed to simplify the benefits enrollment process and provide access to plan information. However, if these portals are not secured properly, they can become a potential entry point for cybercriminals. Your employees may use weak passwords or skip multi-factor authentication for convenience, making it much easier for unauthorized users to access and steal data from your business systems or accounts.
Outdated Legacy Systems
Legacy software and hardware is common in benefits administration system, but they represent another area of vulnerability. If you don’t have the knowledge or experience in cybersecurity, you may not be able to identify outdated systems or delay updates to avoid potential downtime. This can expose your business to data breaches, as outdated systems are often targeted by cybercriminals as a known point of weakness.
The Human Factor
HR teams can unintentionally become the weakest link in your security chain. Common issues include falling for phishing attacks, reusing passwords, and accidental data leaks from poor cybersecurity practices. Without thorough employee training on cybersecurity and best practices, even the most advanced technical defenses can be undermined by human error.
Cybersecurity Strategies for a Resilient Benefits Program
Proactive Risk Assessments
Routine risk assessments are important for identifying your potential threats and vulnerabilities, particularly for benefits administration. These assessments should evaluate both internal and external risks from your employees and third-party vendors. A comprehensive risk assessment allows your business to determine weaknesses and prioritize areas for improvement to reduce your attack surface and minimize risk.
Implementing Encryption
Encrypting sensitive employee benefits data is essential for protecting your business from unauthorized access. Data should be encrypted when it’s stored (at rest) and when it’s being shared (in transit). Data encryption from both angles ensures that if a cybercriminal gains access, it’s practically useless to them.
Developing an Incident Response Plan
No matter how careful you are about cybersecurity, a breach can still occur. It’s important to be not only proactive but have an incident response plan in place to address a breach if one happens. You should have detailed procedures to investigate the incident, contain the damage, and notify affected individuals. You should also have measures in place to prevent future incidents.
Empowering Employees Through Security Awareness Training
Regular cybersecurity training should be built into your cybersecurity plan to raise awareness among your employees and HR teams. Training should cover how to recognize phishing attempts, identify and report suspicious activity, and understand the importance of safeguarding sensitive information. Well-informed employees are less likely to accidentally leave the business open to a breach and will take a stronger stance toward protecting data.
Partnering with Qualified Benefits Technology Providers
Collaborating with reputable providers who specialized in benefits administration security ensures that your internal measures are backed by your partners and can enhance your cybersecurity posture. Look for partners with expertise in assessing vulnerabilities, implementing strong security measures, and assisting with incident response if a breach should occur.
Prioritize Your Sensitive Data with Benefits Administration Security
Cybersecurity should be a top priority for organizations and their HR teams when managing benefits. By following best practices and partnering with reliable technology providers, you can significantly reduce your company’s digital risk and protect your sensitive employee data.
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ABOUT THE AUTHOR
Frank Mengert
Founder and CEO of ebm
Frank Mengert continues to find success by spotting opportunities where others see nothing. As the founder and CEO of ebm (https://getebm.com) a leading provider of employee benefits solutions, Frank has built the business by bridging the gap between insurance and technology-driven solutions for brokers, consultants, carriers, and employers nationwide.
