Missouri man says ‘sham’ health insurance firm cheated him of coverage: lawsuit
A Missouri man has filed a federal lawsuit against a healthcare company attorneys say claimed to sell insurance, but instead left hundreds of Missourians without medical coverage.
The suit, filed Wednesday afternoon in the Western District Court of Missouri, accuses The Aliera Companies, a for-profit corporation, and Trinity Healthshare, a nonprofit entity that Aliera markets and sells insurance plans for, of selling “unfair and deceptive health care plans” to Missourians without providing them with the coverage they were led to believe they’d receive.
Aliera, founded by a man who spent time in prison for fraud and perjury, operates around the country. At least half a dozen states have attempted to put a stop to their marketing practices.
George “Tom” Kelly, a resident of Neosho, a town about 170 miles south of Kansas City, enrolled in what he believed was a health care plan through Aliera in late 2018.
When the 54-year-old purchased two plans through Aliera — one for primary care and one for emergencies — he was told that his local hospital was in-network, and that any care he received there would be covered.
Kelly paid $344 a month for his plan. But when he incurred almost $2,000 in medical costs with his local providers in early 2018, Aliera refused to pay any part of the claim, the lawsuit alleges.
In October 2019, doctors told Kelly he needed surgery for an inguinal hernia. Aliera continually refused to grant him pre-authorization for the surgery, despite his hospital being listed as in-network, according to the lawsuit.
Kelly, who runs a lawn care company and also drives a school bus, said he underwent surgery several weeks later in Oklahoma after finding a hospital that catered to people without insurance and allowed him to pay $3,060 out of pocket for the procedure.
After this, Kelly started doing some research and quickly noticed a pattern of serious complaints against Aliera.
“It was just mushrooming across the United States,” he said. “These people are preying on unsuspecting people. They are enriching themselves at the worst possible time in people’s lives when they have a medical event.”
He and his wife canceled their Aliera plan and called an attorney.
“My eyes were opened to their scheme before I had a tragedy or a financial bankruptcy or something,” he said.
Kelly in the lawsuit is requesting that the court grant declaratory and injunctive relief in the hopes of putting an immediate stop to the continued marketing of the product. He is also asking for financial compensation for his losses.
Aliera, a Delaware corporation headquartered in Atlanta, was founded by Timothy Moses, a convicted felon found guilty of securities fraud and perjury in 2005, according to the U.S. Department of Justice. He was sentenced to six and a half years in federal prison and ordered to pay $1.65 million in restitution.
When Moses founded Aliera in 2015, he lied about the company’s designation, saying they were part of healthcare sharing ministries when they did not meet the requirements, the lawsuit alleges. This was an attempt to “exploit” an exception to the Affordable Care Act, the plaintiff’s attorneys wrote.
On Thursday, Aliera spokesman David White provided a written statement disputing the lawsuit’s allegations.
“(Health care sharing ministries) marketing materials make a point of stating very clearly that these programs are absolutely not insurance,” the statement said.
“Any assertions to the contrary are simply incorrect. We will continue to vigorously defend against false claims about the services our company provides its clients.”
Nationwide pattern
Neither Aliera nor Trinity was licensed or authorized to provide insurance plans in Missouri, and neither had the required certificates of authority from the state’s Department of Insurance, Financial Institutions and Professional Registration, according to the lawsuit.
“They created and marketed the plans to look and feel like insurance plans, and sold and administered the plans with the intention of securing their own profits by arbitrarily delaying and denying claims that their members would reasonably expect to be paid, and leaving members with no effective recourse,” the suit reads.
Jay Angoff, a former Missouri Insurance Commissioner and one of Kelly’s attorneys, said he’s mystified the scam has gone on for so long, though he said it’s not gone entirely unnoticed.
Some legal proceedings, mostly by way of orders from state insurance regulators, have been put in place in an attempt to stop the corporation from marketing it’s plans in their state, he said.
California’s Insurance Commissioner issued a cease and desist order against Aliera and Trinity in March, accusing them of misleading Californians by representing themselves as an insurer even though they lacked the certification.
Similar orders were issued in Maryland, Connecticut, New Hampshire, Colorado and Washington.
After Connecticut’s order was issued, Aliera released a statement saying allegations that their insurance business is illegal have “no factual basis.” They also denied misrepresenting themselves as insurance.
But Aliera isn’t subject to states regulatory authority because it isn’t a real insurance company, said Angoff. He believes Kelly’s suit is the first private case against them.
As of Wednesday, Aliera is still marketing to Missourians, Angoff said.
“It’s particularly cruel to sell this stuff under today’s circumstances in the midst of a coronavirus pandemic,” Angoff said. “Aliera hasn’t put any money aside to pay claims in case of an emergency, so people who buy this stuff are unprotected.”
Angoff recommended that any Missourians who have paid into Aliera call an attorney.
He also encouraged people to reach out to the state’s attorney general’s office or the Missouri Department of Insurance, which at this point has not issued an order against Aliera.
This story was originally published April 16, 2020 at 12:05 PM.
