A federal appeals court refused to outright bless a new type of employee health plan that skirts state insurance regulations and Obamacare protections.
The US Court of Appeals for the Fifth Circuit on Wednesday told a trial court to take another look at whether two companies can create an employee health plan under the Employee Retirement Income Security Act (ERISA) that allows individuals to join if they agree to having their internet activity tracked.
Under the arrangement, individuals who agree to have their internet usage tracked for more than 500 hours a year via their phone, TV, and computer become “limited partners” of Data Marketing Partnership LP who can join an employee health plan run by L.P. Management Services LLC. The companies then sell the data they track to third-party marketing firms.
The district court ruled these individuals are “working owners” and compelled the Labor Department to deem the insurance plan they’re joining a single-employer health plan under ERISA.
The Labor Department had said in an advisory opinion that Data Marketing Partnership’s 50,000 “limited partners” weren’t actually “employees” or “bona fide partners,” who are eligible to participate in its employee benefit plan. Data Marketing and L.P. Management Services then challenged that opinion.
In its ruling Wednesday, the Fifth Circuit called the Labor Department’s advisory opinion “arbitrary and...
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