Federal lawsuit: Atlanta company Aliera runs illegal insurance scheme

An Atlanta company is selling illegal health insurance to its members and reaping massive profits under the guise its plans are part of a legitimate health care sharing ministry, a federal lawsuit contends.

The suit was filed against Aliera Cos. in U.S. District Court in Atlanta. It accuses the company of running a scheme that allows them to skirt state and federal insurance laws.

Aliera’s marketing and sales operation “has been an extremely lucrative — but illegal — arrangement” under which it keeps approximately 84 cents of every dollar its members pay, the lawsuit says.

In a statement, Aliera strongly denied any wrongdoing.

“This lawsuit is full of false claims and faulty interpretations of the law,” the company said.

The lawsuit also misinterprets Aliera’s relationship with Trinity HealthShare, a nonprofit health care sharing ministry, the company said.

Health sharing plans, also called ministries or medishare, are not insurance. Such plans have members from a like-minded group, such as a religious organization, who pay in monthly installments and then share medical expenses.

The lawsuit, filed June 5 by three female plaintiffs, seeks class-action status on behalf of all current and former participants in Aliera plans with a health care sharing ministry from 2017 to today.

One of the plaintiffs, Tania Funduk of Atlanta, was paying $500 a month for her plan, the lawsuit says. But when she submitted her medical bills to Aliera, it continually delayed and refused to cover them, the suit says.

“Aliera is selling bad insurance and masquerading as a ‘religious ministry’ to try to escape insurance rules,” said Atlanta lawyer David Walbert, who represents the women. “By claiming it’s not insurance, Aliera ignores the Affordable Care Act requirement that 85% of premiums be paid out as benefits. Aliera only pays out a fraction of that for its insureds, the rest going to excessive administrative costs and profits.”

Aliera is operated by Timothy Moses; his wife Shelley Steele, Aliera’s CEO; and their son Chase Moses, the company’s president, the lawsuit says.

Timothy Moses, who is not a member of Aliera’s board of directors, was convicted in 2005 of securities fraud and perjury. This stemmed from him releasing statements that falsely suggested the federal government was interested in buying products from his Norcross-based biotechnology company. He was sentenced to 78 months in prison and ordered to pay $1.65 million in restitution.

After Moses finished serving his prison time and probation, “he and his family set into motion the events giving rise to this case,” the lawsuit says.

In August 2018, Aliera entered into an agreement with Trinity HealthShare that allowed Aliera to develop, market and sell Trinity’s plans, the lawsuit says. But Trinity, whose bylaws have Christian overtones, does not actually qualify as a true health care sharing ministry because anyone can be a member regardless of their faith, the suit says.

In its statement, Aliera said its has, for years, provided administrative, marketing, and information technology support services to health care sharing ministry clients. This allows it to offer affordable alternatives to traditional health insurance for people of faith, the company said.

“We’re proud to have processed tens of thousands of share requests to date, totaling more than $220 million in shared payments to meet the health care needs of HCSM (health care sharing ministry) members,” the company said.

Aliera does not keep 84% of payments from sharing ministry members, the statement said. “This is a made-up, false assertion, as are many of the allegations in the complaint.”

Aliera said it is not a health care sharing ministry, nor is it liable for payments made on behalf of ministry clients. “We look forward to addressing false claims made about the services we provide to our clients,” the company said.

In recent years, regulators have investigated or suspended Aliera in several states, most recently issuing a cease and desist order against the company in Connecticut. Aliera has denied any wrongdoing.

“Aliera thinks they can go through some of the motions of a HCSM (health care sharing ministry) and evade the insurance laws,” Walbert said. “We certainly disagree with that and are confident the courts will look at the substance of their operation, not the window dressing.”