DOL Moves for Time to Issue Modified Guidance on Insurance Plans

The U.S. Department of Labor has filed a motion asking a Texas federal district court to put a pending court battle on hold while it issues revised guidance on insurance plan coverage under ERISA. Data Marketing Partnership LP offers health insurance to individuals who pay their own premiums in exchange for turning over their personal web tracking data. The case is Data Marketing Partnership LP et al. v. U.S. Department of Labor et al., case number 4:19-cv-00800, U.S. District Court for the Northern District of Texas.

DOL is proposing that it issue revised guidance on the issue of whether companies like Data Marketing fall under ERISA within a reasonable time. The agency also offered to file status reports with the court every 90 days during the review process. 

Data Marketing sued DOL after it ruled that the company was not subject to ERISA. DOL maintained that Data Marketing structured its company to avoid stricter state insurance regulations, and multiple other state agencies, insurance commissioners, and public interest groups agreed. Data Marketing argued that DOL’s advisory opinion violated the Administrative Procedure Act (APA). 

The federal district court granted summary judgment to Data Marketing, finding that the DOL advisory opinion was “arbitrary and capricious” in violation of the APA and violated ERISA. The U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s ruling, finding that the DOL failed to explain its guidance and consider other advisory opinions adequately. The court also vacated the lower court’s permanent injunction of the DOL guidance, finding that it needed to clarify issues with the reasoning in its decision. 

In support of its motion, DOL pointed to the 1985 Supreme Court ruling in Florida Power & Light Co. v. Lorion, in which the Court ruled that if an advisory opinion is invalid because the agency did not consider all relevant factors, then the agency should be allowed to reassess the guidance. It also reasoned that it could not explain its guidance before the federal district court granted summary judgment. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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