Scott demands answers from Labor Department on “fake job” health plans

The following information was released by the office of Virginia Rep. Robert C. Scott:

Today, House Committee on Education and Workforce Ranking Member Robert C. "Bobby" Scott (VA-03) sent a letter to Acting Secretary of Labor Keith Sonderling and Assistant Secretary Daniel Aronowitz demanding answers about reported settlement negotiations with companies selling junk health plans that use sham employment or partnership relationships to circumvent federal consumer protections and state oversight.

The reported negotiations come amid growing concerns about so-called health plans tied to fictious jobs or downloading an app, which can evade many Affordable Care Act protections and state insurance oversight by misclassifying consumers as employees or business partners. According to Bloomberg, more than 100,000 U.S. households have purchased plans tied to purported employment relationships, with some consumers left facing significant medical bills due to barebones health plans that fail to offer adequate coverage. Patient and consumer groups have also sounded the alarm.

In his letter, Ranking Member Scott urged the Department to ensure that any action it takes is consistent with federal law and does not leave consumers without meaningful protections or state oversight.

"Any settlement or other action that is inconsistent with the Department's obligations under these laws would be an inappropriate exercise of power at the expense of consumers and state authority to regulate health insurance,"wrote Ranking Member Scott. "I remind you of your obligation to ensure that any action taken must be consistent with federal law, including the requirements of ERISA and the Administrative Procedure Act."

Ranking Member Scott is also seeking an update on the status of the settlement, whether the Department has changed its legal position, and whether the Department is preserving all records of meetings and communications between political appointees and Data Marketing Partnership, in compliance with federal law and regulations.

Further, Ranking Member Scott requested information about complaints from consumers and state regulators regarding the plans sold by Data Marketing Partnership or similar entities.