Golden State Today

California Attorney General Rob Bonta has announced a $1.3 million settlement with Sedera, Inc. and Sedera Medical Cost Sharing Community, LLC over allegations of selling fraudulent health insurance plans to Californians. The companies were accused of falsely promoting their products as innovative “non-insurance” medical cost-sharing products and health care sharing ministry (HCSM) plans.

The California Department of Justice found that Sedera and SMC collected mandatory monthly payments for medical services, effectively operating as unauthorized health plans without adhering to state consumer protection laws. These laws require coverage for essential health benefits, including preventative care, which the offered products did not provide.

“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.”

The settlement bars Sedera and SMC from selling or managing any health plans in California or transferring members to other cost-sharing entities. They are required to delete their customer lists in California and inform members about plan termination. The $1.3 million payment includes $800,000 for consumer restitution in two installments over six months and $560,000 in civil penalties.

In April 2021, after receiving multiple complaints regarding HCSM plans refusing treatment coverage or bill payments, Attorney General Bonta issued a consumer alert about illegitimate HCSMs. He filed a lawsuit against The Aliera Companies in January 2022 for claiming HCSM status. In March 2023, he announced a $2.1 million settlement with Alliance for Shared Health over similar allegations.

Further details on the complaint and stipulated judgment can be accessed online.