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Christian Group’s Insurance Plan Called a Fraud by New York

New York accused an Amish church’s former cost-sharing partner on Tuesday of running an illegal insurance business that shortchanged some 40,000 enrollees who expected comprehensive health care plans.

MANHATTAN (CN) — New York accused an Amish church’s former cost-sharing partner on Tuesday of running an illegal insurance business that shortchanged some 40,000 enrollees who expected comprehensive health care plans.

Brought by the state’s Financial Services Department, the 24-page charging papers accuse Trinity Healthshare of illegally selling insurance while holding itself out as an HCSM, or health care sharing ministry, to evade insurance regulation. Aliera, the for-profit entity that markets the plans, was founded by Shelley Steele and Timothy Moses in 2015 — about a decade after Moses was convicted of securities fraud in connection to another business.

HCSMs are meant to let religious communities pool money to pay members’ health care costs, and Aliera, in its earliest form, had partnered with the purported HCSM arm of the Gospel Light Mennonite Church.

New York says that relationship fell apart and Trinity was formed after the Anabaptist church ministry uncovered that Moses had authorized checks to himself from its HCSM’s funds.

“Respondents aggressively marketed and sold their products to consumers in the health insurance marketplace, preying on people who were uninsured, and deceiving consumers into paying hundreds of dollars per month for what they were led to believe was comprehensive health coverage,” the charges papers state.

Trinity President Joe Guarino says that the group is fully prepared to show that they are in compliance with state law.

“Trinity operates a health care sharing ministry that aims to bring together people of a common set of religious beliefs in order to share in one another’s medical expense burdens and so fulfill the law of Christ,” Guarino said in a statement. “The vast majority of Trinity’s members around the country are very pleased and satisfied with Trinity’s health care sharing ministry and continue to choose to participate in Trinity’s ministry as a cost-effective medical payment arrangement.”

In 2018 PBS found that roughly 1 million Americans pool money into religious groups to pay for health care. But the only reason that HCSMs can offer low rates is because they are not classified as insurance, meaning that they are under no legal obligation to pay medical claims.

Where consumers get confused, New York alleges, is that Trinity uses the disclaimer that it “does not guarantee payment of claims,” even as it targets uninsured customers with promises of affordable comprehensive coverage.

“Every aspect of Respondents’ marketing, notwithstanding their false disclaimers, leads consumers to believe that they have purchased legitimate, comprehensive health insurance coverage,” the charging papers state, quoting marketing materials where Trinity promises enrollees a “wide range of medical services” that includes telemedicine, discount prescriptions and access to labs.

New York notes that some 5,600 New Yorkers are currently enrolled with Trinity. Recounting the stories of some dissatisfied customers, it points to one woman who was left with a nearly $15,000 bill for breast cancer treatment after Aliera denied her claim.

At the same time it is denying members’ claims, according to the charges, Aliera has “retained an unacceptably high proportion of consumer premiums.”

The landmark health care law instituted by President Barack Obama requires that insurers spend at least 80% of the premiums it collects from members on medical benefits. But at Trinity, according to the charges, one plan leaves as little as 9.8% of collected fees for members’ medical expenses.

Trinity and Aliera allegedly pocket most of the money — a fraud, by New York’s measure.

“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,” DFS Superintendent Linda Lacewell said in a press release. “DFS is committed to protecting consumers and the integrity of New York’s healthcare marketplace, ensuring New Yorkers receive the care they expect and may need.”

The state issued a cease-and-desist letter in April that stopped the group from enrolling any new customers. Today it seeks civil penalties and other relief on behalf of consumers. A hearing for this case is set for February 2, 2021. 

New York is not the first to go after Trinity and Aliera. Connecticut and Washington have also brought actions against the companies alleging similar claims. Meanwhile the Trump administration issued a proposal last year that would give those enrolled in HCSMs a tax break.

Categories / Business, Health, Religion

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