Settlement also prohibits companies from selling or operating any health plans in California
OAKLAND — California Attorney General Rob Bonta today announced a $1.3 million settlement with Sedera, Inc. (Sedera) and Sedera Medical Cost Sharing Community, LLC (SMC) to resolve allegations that they violated California law by advertising and selling sham health insurance plans to over two thousand Californians. In addition, the settlement resolves allegations that Sedera and SMC falsely advertised their sham plans as both novel “non-insurance” medical cost sharing products and as health care sharing ministry (HCSM) plans. An investigation by the California Department of Justice found that because, among other things, Sedera and SMC collected mandatory monthly payments in exchange for the payment of medical services, Sedera and SMC operated health plans. Health plans are required to comply with a myriad of important state consumer protection laws and regulations. Those laws and regulations require that, among other things, health plans provide coverage for all essential health benefits, including preventative care. The products offered by Sedera and SMC did not.
“Sedera and SMC were able to sell their sham health insurance plans at lower costs precisely because those plans were a sham and failed to comply with state law. For example, they did not offer Californians the essential health benefits they were entitled to,” said Attorney General Bonta. “Today’s settlement includes not only strong injunctive terms that prohibit Sedera and SMC from marketing, selling, or operating any plans in California, but also consumer restitution and payment for civil penalties. We welcome businesses in our state, but we will not allow them to prey on our people. Lastly, to my fellow Californians: please do your research and first consider applying for affordable, reliable coverage through Covered California.”
SMC, a corporation that falsely purported to be a non-profit, created, operated, and sold unauthorized health plans through its for-profit administrative vendor, Sedera. As part of today’s settlement, Sedera and SMC:
In April 2021, after receiving multiple complaints from consumers alleging that their HCSM plans refused to cover treatments and pay their medical bills, Attorney General Bonta issued a consumer alert, warning Californians about illegitimate HCSMs. In January 2022, he filed a lawsuit against The Aliera Companies for purporting to be a HCSM. Further, in March 2023, Attorney General Bonta announced a $2.1 million settlement against Alliance for Shared Health to resolve allegations that they offered and deceptively advertised sham health insurance.
A copy of the complaint can be found here. A copy of the stipulated judgment, which is subject to court approval, can be found here.