Federal court awards $4.7 million in lawsuit over health policies
Judge's ruling part of broader issue in cases still pending
LEXINGTON, Ky. (WTVQ/Press Release) — In a class action lawsuit, Senior Judge Joseph Hood of the U.S. District Court for the Eastern District of Kentucky in Lexington has certified a statewide class and entered judgments totaling $4,696,124 against The Aliera Companies, Inc., the creator and marketer of purported “health care sharing ministry” products., according to attorneys involved in the case.
Aliera was founded by Timothy Moses and his wife and son in December 2015, the same year Moses finished serving a six-year federal prison sentence for securities fraud and perjury.
HCSMs are organizations through which members share medical expenses among themselves. But HCSM plans must meet strict requirements in order to avoid being regulated as insurance products. For example, under federal law, an HCSM must have been in existence with members continually sharing health care costs since 1999, and under Kentucky law, all members of an HCSM must be members of the same denomination or religion. Since its inception, Aliera failed to comply with these requirements, according to lawyers Jay Varellas and Jay Prather, who represented some of the people involved in the case.
“Since we first started working with victims of this fraud two years ago, we have had two objectives: to end the fraud and to obtain compensation for its victims. With Trinity’s bankruptcy, the fraud is now over and we will turn our attention to recovering funds to compensate those who were victimized by Aliera, Trinity and OneShare Health,” Varellas said.
Jay Prather of Garmer & Prather states: “Aliera and its partners have taken advantage of hundreds of Kentuckians, many of whom trusted the company because it professed Christian beliefs.” “Aliera’s customers sought affordable healthcare coverage to protect their families in times of need. But when those times of need came, Aliera was more likely to shut the door in the face of its own customers. This ruling by Judge Hood is the first step in helping those families recover what they have lost,” added Prather.
Among other things, the federal judgements establish that the health insurance policies Aliera sold to customers as cheaper alternatives to traditional health insurance coverage did not comply with important requirements of Kentucky and federal insurance law, including requirements designed to protect consumers and ensure adequate funds were available to cover health care expenses.
In addition, the court’s judgment found each Kentucky customer who purchased products from Aliera during the period it partnered with Trinity HealthShare, Inc., which subsequently began doing business as Sharity Ministries, Inc., is entitled to either (1) payment of the claims they submitted that have not yet been paid, or (2) a refund of the policy premiums they paid, the attorneys said.
In July, Trinity filed for bankruptcy protection in Delaware, and its chief restructuring officer in that matter has calculated there were $3,112,951 worth of medical bills submitted by Kentucky policyholders that have not been paid and Kentucky policyholders have paid a total of $2,189,003 in premiums. Assuming each policyholder would elect to receive the higher of their unpaid claims or a refund of their premiums paid, the court arrived at the total amount of $4,696,124, the attorneys said.
The litigation on behalf of customers who allege they were defrauded by Aliera, Trinity and Aliera’s former business partner Unity Healthshare, LLC, now doing business as OneShare Health, LLC, will continue. This judgment only encompasses the second phase of Aliera’s fraud, when it sold sham HCSM policies through Trinity, the attorneys said.
During the first phase of its fraud, Aliera sold sham HCSM policies through Unity/OneShare. The case in federal court in Lexington will continue until all claims against Aliera, Trinity and Unity/OneShare are fully resolved.
The case is styled Albina and Willard v. The Aliera Companies, Inc., Trinity HealthShare Inc., and OneShare Health, LLC d/b/a Unity HealthShare, LLC, No. 20-496 (E.D. Ky.).