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Federal Court awards $4.7 Million Judgment to Garmer & Prather Clients in Class Action Lawsuit Against Marketer of Fraudulent Health Insurance Policies

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 Defendant The Aliera Companies, Inc., the creator and marketer of purported “health care sharing ministry” (“HCSM”) products. Aliera was founded by Timothy Moses and his wife and son in December 2015, the same year that 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.

With this judgment, it is now established that despite the claims by Aliera that its health plans were “not insurance,” they were in fact insurance products as a matter of Kentucky law. Further, it is also established 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 that 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. In July, Trinity filed for bankruptcy protection in Delaware, and its chief restructuring officer in that matter has calculated that 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 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. 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.). In recent years, the fraud at issue in this case has been covered by a number of newspaper and other media outlets around the country, including a recent segment on Last Week Tonight with John Oliver.

Class counsel in this matter are James J. (“Jay”) Varellas III and D. Todd Varellas of Varellas & Varellas; Jerome P. (“Jay”) Prather of Garmer & Prather PLLC; William H. Anderson, George Farah, Stephen Pearson and Rebecca P. Chang of Handley Farah & Anderson PLLC; and Richard E. Spoonemore and Eleanor Hamburger of Sirianni Youtz Spoonemore Hamburger PLLC. Attorneys from Sirianni Youtz also represent the committee of creditors in the Trinity bankruptcy in Delaware and serve as counsel for similar cases against the same defendants in several other states.

A copy of the original Class Action Complaint in the case is available at this link.

Inquiries about this lawsuit may be directed to attorney Jay Prather at 859-254-9351, or contact us here.

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