California reaches $2.1 million settlement with 'sham' health plans

Two companies operating healthcare sharing ministries will pay $2.1 million to California to settle allegations they violated insurance regulations by deceptively advertising their plans as equivalent to standard health insurance. 

Alliance for Shared Health, a nonprofit entity, sold healthcare sharing plans through its for-profit administrative vendor, Shared Health Alliance, California Attorney General Rob Bonta alleged in a March 13 news release. 

Shared Health Alliance advertised its plans as standard health insurance but did not provide ACA-mandated coverage for preexisting conditions and reproductive care, Mr. Bonta alleged. 

"What these companies didn't mention was that their plans had shoddy coverage that could leave members holding the bag on medical bills in case of a health crisis. Our settlement today holds ASH and SHA accountable, and should serve as a warning to other sham insurers," Mr. Bonta said. 

As part of the settlement, the companies will cease all marketing, sales and operations in California. 

Healthcare sharing ministries are legal operations where members, usually with shared religious beliefs, pool money to pay for the medical expenses of others in the group. They are not health insurance plans. 

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