A lawsuit between the Department of Labor and Data Marketing Partnership is being monitored by health policy analysts as court filings indicate a potential settlement may be in progress. The case centers on whether individuals who provide personal data to a company can be legally classified as employees, a status that would allow them to access job-based health insurance plans. These plans are governed by federal law rather than state regulations and are often offered at a lower cost than Affordable Care Act (ACA) marketplace plans.
The litigation began in 2019 when Data Marketing Partnership sued the Department of Labor to gain official recognition as an employer. The company offers health coverage to individuals who download an app that tracks their internet searches, allowing the company to sell that data. Proponents, including attorneys general from seven states, argue this provides a necessary, lower-cost option for those who do not qualify for ACA subsidies. However, the Department of Labor previously issued an advisory opinion in 2020 stating that software users are not "employees or bona fide partners."
A Texas district court judge initially ruled in favor of the data marketer, calling the department's stance "arbitrary and capricious." The U.S. Court of Appeals for the 5th Circuit later upheld much of that ruling but instructed the lower court to further examine if software users qualify as "working owners" or "bona fide partners." While the Department of Labor defended its position through the first Trump administration and the Biden era, the current possibility of a settlement has raised questions about whether the agency will change its defense of the case.
For the average consumer, this could mean a difference in monthly costs and coverage levels. Proponents argue these plans offer relief from surging ACA premiums, which have recently seen double-digit increase requests from insurers. Conversely, state insurance commissioners and patient advocacy groups, including 19 organizations that wrote to the Department of Labor on August 11, warn that these plans lack comprehensive medical coverage and could leave households with large, unexpected medical bills. Regulators in Maryland, Washington, Maine, and Connecticut have already issued fines or warnings against similar entities, with Washington fining one company $25,000 in 2021 and Maryland fining The Vitamin Patch in 2024.
The case also sets a precedent for the stability of the broader insurance market. If healthier, younger individuals move to limited-partnership plans, health policy analysts and officials like Maryland Insurance Commissioner Marie Grant warn that those remaining in the ACA marketplace—often older or sicker individuals—could face even higher premiums. The Department of Labor and the White House have not publicly confirmed if a settlement has been reached or if the department's stance has officially shifted. The next steps depend on the district court's reconsideration of the employment definitions or the finalization of a settlement agreement.