By Marie McDonald Hulen
On March 8, 2020, the California Department of Insurance issued a Cease and Desist Order against Aliera Healthcare, Inc. and Trinity Healthshares, Inc. for violating California law by misleading California consumers regarding their products and transacting insurance business without a certificate of authority from the Insurance Commissioner. In the order, the Department describes these organizations as “Health Care Sharing Ministries” (HCSM), organizations in which members share a common set of religious or ethical beliefs and agree to make payments to, or share, the medical expenses of other members, and estimates that 11,000 California residents are members of Aliera and Trinity. The Department contends that these companies’ advertisements, solicitations, and other materials are deceptive, and have the capacity and tendency to deceive consumers to believe they are purchasing traditional health coverage rather than a HCSM membership with no guarantee that claims will be paid, and products that do not comply with the Affordable Care Act. Neither company is currently licensed or authorized by the Insurance Commissioner to act in any capacity regarding the transaction of insurance in California. The Cease and Desist Order immediately prevents Aliera and Trinity from transacting, advertising, or receiving any money related to insurance transactions in California.
On the same day, the Department filed an accusation against non-resident insurance licensee, Ensurian Agency, LLC, of which Aliera is listed as the 100% owner, and Jon Alan Hatcher, the President of Ensurian, who had been licensed by the Insurance Commissioner to act as a non-resident producer Accident and Health and Life Only Agent. The Accusation alleges that Ensurian and Hatcher marketed, sold, and solicited California consumers to purchase products offered by Trintiy and Aliera, and misrepresented the terms and conditions of these products. It also alleges that the products violate the Affordable Care Act in that they do not cover preexisting conditions, abortion and/or contraception, and do not comply with the Mental Health Parity Act. Accordingly, the Department seeks an Order revoking all the licenses and licensing rights of Ensurian and Hatcher.
In a Department press release, Commissioner Ricardo Lara stated, “Consumers who bought these plans thinking they purchased comprehensive health insurance deserve the full protection of our laws. Consumers should know they may be able to get comprehensive coverage through Covered California that will protect their health care rights.”
On March 10, 2020, Commissioner Lara issued a Notice to Agents addressed to insurers and other health care agents, advising them about potential issues with HCSMs and information they should be aware of before signing up consumers for an HCSM, including the fact that they do not guarantee payments of claims, usually cap what they will pay, do not comply with consumer protections of the federal Affordable Care Act, and do not have provider networks. The notice advises insurance producers that they must ensure that they have explained the limitations of this type of product to the consumer to avoid misleading consumers about the product they are purchasing.
The Department encourages consumers who have purchased coverage through from Aliera or Trinity to contact Covered California at 855-295-2023 to determine if they have experienced a qualifying life event that entitles them to a special enrollment opportunity. Consumers may also contact the Department of Insurance hotline to learn about their options or to file a complaint if they have been harmed.