New York’s financial regulator has accused two companies involved in health care sharing plans of “outright fraud,” alleging that they misled customers into buying insurance-like coverage for medical expenses and then denied their claims.
The New York State Department of Financial Services on Tuesday filed a document asserting fraud claims against Trinity HealthShare, a nonprofit health care sharing ministry, and the Aliera Companies, which markets and administers health coverage on behalf of Trinity. The agency also scheduled a hearing on Feb. 2, 2021, to determine whether the companies broke state insurance laws.
The state’s allegations represent the latest regulatory pushback against the companies from authorities worried that they don’t play fair with the cash they receive from members.
The department said Aliera and Trinity “conducted an illegal insurance business in New York” by selling plans that overstated the coverage offered, then fraudulently pocketing premiums from customers who needed the money for treatment.
According to the agency, the companies have used deceptive marketing to attract uninsured customers to Trinity’s plan, which like other health care sharing ministries does not offer the same benefits guaranteed in legally regulated insurance policies.
Health care sharing ministries are typically faith-based organizations that pool together contributions from members and then distribute funds to them for qualifying medical expenses. The entities are exempt from insurance regulations and consumer protection provisions included in the Affordable Care Act.
Critics of the programs contend that they profit by preying on participants who don’t always understand the limitations of the coverage they signed up for.
“New Yorkers should not have to worry whether a trip to a medical professional could lead them to bankruptcy, a factor that has been compounded by this unprecedented global health crisis,” said Linda Lacewell, superintendent of the NYDFS.
Trinity and Aliera pushed back on the regulator’s claims, saying they have always made clear that Trinity’s faith-based programs are not insurance products. They added that health care sharing arrangements provide a legitimate, affordable alternative to health insurance.
A Trinity representative told Fastinform the entity “is not acting as an insurer in New York or any other state,” adding that “the vast majority of Trinity’s members around the country are very pleased” with its programs and continue to contribute to them.
Aliera said it isn’t an insurer or a health care sharing ministry, but instead administers payouts for Trinity according to Trinity’s guidelines.
Trinity members must acknowledge that they understand the program isn’t insurance before enrolling, an Aliera spokesperson said, and have “ample opportunity” to learn what the cost-sharing plan entails before getting involved.
According to the spokesperson, the regulator’s allegations stemmed from a misunderstanding of the companies’ activities as well as bias against faith-based alternatives to health insurance.
“We’re hopeful that a New York court will uphold its state and federal constitutions in guarding against this kind of regulatory overreach and religious discrimination,” the spokesperson said.
Aliera and Trinity recently scored a victory in New Hampshire, where a judge ordered a halt to administrative hearings similar to the one launched in New York. The companies had sued New Hampshire’s insurance department, claiming that it violated religious freedom protections by ordering them to stop issuing new memberships or renewing existing ones.
Authorities in Texas, Colorado, Washington and Maryland have also opened investigations or sought cease-and-desist orders against Aliera, the Los Angeles Times reported, generally alleging that it deceptively marketed sharing plans to consumers.
In June, Aliera was also hit with a federal lawsuit claiming that it illegally skirts insurance laws to generate revenue.
The company has denied any wrongdoing in relation to the accusations.