The Birth of Partnership Plans

Several entrepreneurs predicted that the Department of Labor AHP rule would fall short, and struck upon an idea to create a new model for affordable health coverage.

Alex Renfro, a Nashville-based benefits attorney, created an innovative structure to help small businesses meet their new requirements under ACA. In 2013, Renfro met two private equity investors who decided to back his idea. The trio later formed Suffolk Administrative Services (SAS), which provides consulting, plan design and compliance services to sponsors of health benefit plans governed by ERISA.

In 2018, three events converged and led to the creation of EASE:

• An association of truckers based in Tennessee reached out to SAS about the need for more flexible and affordable health coverage options for its members, who are independent contractors and thus ineligible for traditional group coverage.
• A California tech entrepreneur in the nascent “Own Your Data” (OYD) space approached them about the possibility of creating a health plan and using it to attract users, who would agree to share their electronic data and thus help achieve the critical mass necessary to execute on the OYD business model.
• Renfro’s research into ERISA concluded that under certain circumstances, partners in partnerships could be treated as “working owners,” and therefore entitled to participate in group benefit plans.

OYD is a nationwide movement, driven by the belief that the data generated by the use of smartphones, tablets and computers should belong to the people who generate it—the users themselves—rather than giant tech companies such as Alphabet (Google), Apple, Microsoft, and Meta (Facebook, Instagram, WhatsApp).

A separate group formed LP Management Services (LPMS), to fulfill administrative functions for limited partnerships that would aggregate and monetize the electronic data usage of their limited partners. Limited partners who work to provide their data to the partnerships are offered group health benefits.

With SAS guidance and support, LPMS launched  “Partnership Health Plans,” and with it a simple yet powerful idea: allowing everyone to access the same kind of ERISA-based benefit plans that 160 million Americans already enjoy through their employers. These “large group” plans enjoy considerably more flexibility and buying power than individual and small group plans available on the ACA exchanges, and on average are considerably less expensive.

Partnerships plans function much like any healthcare coverage. Interested participants first join a partnership and agree to contribute at least 500 hours of data per year, giving them access to its benefit plans. People then choose a coverage option that suits them, including a service level, monthly premium and deductible that fits their budget. They can then access physicians and facilities according to the coverage they selected. Their privacy is fully protected, and they can make changes at any time.

“Healthcare coverage should not just exist for the very rich and the very poor,” Bill Bryan said. “We need plans that work for everyone, no matter what their means or type of job. What we have done is create a model within existing laws to give people more options. It’s new. It’s innovative. And it works.”

LPMS partnered with several enrollment firms, marketing the concept as EASE healthcare plans, a tiered series of products at different price points to serve individuals and families with varying healthcare needs. Immediate access to EASE healthcare plans is an attraction and retention tool used by many other businesses such as Amazon.

In total, they currently provide coverage to more than 30,000 Americans who may not otherwise have coverage. With regulatory recognition, that number could increase dramatically. But an intransigent Labor Department continues to fight the companies, arguing the innovative plans should not be allowable under ERISA.