Defending Against Bad Health Insurance

April 9, 2021

ACS CAN filed an amicus brief in the case of Data Marketing Partnership LP et al v U.S. Department of Labor, a lawsuit regarding a health insurance coverage arrangement that seeks to evade the Affordable Care Act (ACA)’s standards for individual and small group markets. Data Marketing Partnership (DMP) is a company offering “limited partnership arrangements” that provides access to a group health plan to any individual who installs tracking software on their computer allowing DMP to collect data from the individual’s web browsers for the purpose of selling that data to third parties. DMP terms participating individuals “working owners” of DMP.   DMP’s partner company, LP Management Services (LPMS) sought a Department of Labor (DOL) advisory opinion saying the DMP arrangement qualified as a single-employer self-insured group health plan under Employee Retirement Income Security Act (ERISA). Such designation would allow the plan to escape the ACA's stronger standards for the individual and small group markets and instead be subject to the DOL oversight and regulation.

DOL issued its advisory opinion to LPMS in February of 2020, finding that the structure used to extend coverage to enrollees did not qualify as an ERISA plan. Without ERISA status, DMP’s group plan would be subject to both relevant state and federal statutes and regulations, including vital ACA patient protections that cover small group plans. Ahead of DOL’s opinion, DMP filed suit in the U.S. District Court for the Northern District of Texas, Fort Worth Division, requesting that the court approve their structure as a single-employer plan under ERISA and prevent regulatory authorities from taking enforcement action. DMP has stated that, as of January 2020, nearly 50,000 individuals had engaged in this arrangement.

In September 2020, US District Judge Reed O’Connor (Texas) ruled in favor of the DMP, finding that the Department of Labor’s advisory opinion was arbitrary and capricious and contrary to ERISA law. Beyond that, Judge O’Connor determined that the individuals engaged with the DMP were bona fide partners and working owners under ERISA. In November 2020, DOL appealed Judge O’Connor’s decision to the US Court of Appeals for the Fifth Circuit.

Our amicus seeks to educate the Fifth Circuit on how the DMP model is the latest in a line of complex schemes intended to deprive consumers of the ACA’s individual market patient protections and leave plans largely unregulated. It also provides scientific studies demonstrating why comprehensive health insurance is critical to preventative treatment and improved patient outcomes.