Insurance plan

California sues ‘Ministry of Sharing’ health insurance plan

Attorney General Rob Bonta. (Doug Duran/Bay Area News Group)

SACRAMENTO — California on Wednesday sued what the state’s attorney general called a bogus health insurance company operating as a “ministry of health care sharing” — a company the state says unlawfully denied benefits to members while retaining up to 84% of their payments.

The lawsuit names The Aliera Companies and the Moses family, who founded Sharity Ministries Inc. Sharity, formerly known as Trinity Healthshare Inc., is a not-for-profit corporation.

But the state says Aliera is a for-profit company that has collected hundreds of millions of dollars in premiums from thousands of Californians and others in the United States through unauthorized health plans and insurance. sold by Sharity/Trinity.

Instead of paying members’ health costs, the state alleges the company routinely denied claims and spent just 16 cents of every dollar on premiums for health expenses.

“It’s especially egregious when bad actors operating in the health care marketplace take advantage of families, when they take their money but provide essentially worthless coverage,” Attorney General Rob Bonta said in announcing the lawsuit.

“It has left countless families crushed – not only by illness and the weight of medical emergencies, but by the burden of insurmountable medical debt.”

Prior to California’s lawsuit, 14 states and Washington, DC, had taken action against the Atlanta, Georgia-based company.

They include the California Department of Insurance, which issued a 2020 cease and desist order to prevent Aliera from selling new plans in the state. But the state maintains the company continued to operate for existing California members until Sharity went bankrupt last year.

Aliera did not respond to phone and email requests for comment on Wednesday.

But in a statement on its website responding to previous allegations, the company said it “is a holding and management company and is not an insurance company or shared health care ministry.” HCSM”); however, through several wholly owned subsidiaries…we provide services to HCSM customers.

Aliera and Sharity were part of such “sharing” plans announced last summer by “Last Week Tonight with John Oliver”.

The California lawsuit alleges Aliera never met the legal definition of a shared healthcare ministry, which, among other things, required it to be a nonprofit in existence since Dec. 31 1999.

Members were informed that their monthly payments would be used to help others with their health costs. But the state says the company and the Moses family kept up to 84% of the bonuses.

In contrast, traditional businesses licensed under the federal Affordable Care Act of 2010 are required to spend at least 80% of their premiums on medical care.

California Cover Executive Director Peter Lee said plans included in the state program spent an average of 87% of premiums on health care.

In April, Bonta issued a more general consumer alert about these “sharing” companies.

He said that unlike covered California plans, these shared health care departments are not required to cover pre-existing conditions or guarantee coverage for medical costs or services such as birth control, prescriptions and drugs. mental health care.

The question arose after the Affordable Care Act was passed in 2010.

These health care sharing ministries have been allowed to let consumers pool their money with others who share their religious beliefs, for the purpose of helping each other in a medical emergency.

They’ve been exempted from many of the new federal coverage requirements, and some companies have started marketing the sharing plans as a cheaper alternative to the new Obamacare-compliant health insurance.

Enrollment in such sharing programs has since grown from around 100,000 members in 2010 to 1.5 million members in 2020. California has the second-largest membership in the nation, with around 69,000 members, according to the trial.

Bonta and Lee said many companies may be operating illegally because they don’t meet the requirements for a Health Department exception.