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Health-Care Ministry Aliera Subpoenaed by New York Regulator

John Tozzi and Emma Court

(Bloomberg) -- New York state insurance regulators are investigating whether a religious-based group that offers a lower-cost, less regulated alternative to traditional health coverage misled customers, according to people familiar with the matter.

New York’s Department of Financial Services sent a subpoena to Aliera Companies Inc., which operates Trinity HealthShare, a nonprofit health-care sharing ministry. The health-sharing groups have grown in popularity amid the rising cost of health insurance, though often offer fewer protections and can come with significant limits. As many as 1 million people are in health-care sharing ministries, by some estimates, though reliable numbers are hard to find.

Aliera didn’t respond to requests for comment on Wednesday.

Aliera has about 100,000 customers in the U.S., according to one estimate, and the plans have attracted controversy. Texas has sued Aliera to stop it from selling unregulated insurance products. Aliera told the New York Times that it had halted selling plans in Texas and was working with regulators to resolve the concerns.

New York’s Department of Financial Services is attempting to determine whether Aliera misled customers, after receiving 15 to 20 complaints from consumers in the past year, said the people.

Members in health-sharing ministries contribute funds monthly to offset one another’s expenses. The arrangements sometimes mimic how health plans work, with cards members are supposed to present to physicians. In some states they’re marketed through brokers alongside health-insurance products.

The health-sharing plans were allowed under the Affordable Care Act, but aren’t considered insurance and aren’t generally subject to state insurance laws.

Regulators in some states, including New Hampshire, Texas, Colorado, Connecticut and Washington, have taken action against Aliera nonetheless, alleging that it crossed the line into selling health insurance. Some states have said Aliera isn’t a health-sharing ministry because it is a for-profit company.

The Texas lawsuit against Aliera, filed in June, alleged that Aliera misrepresents itself by offering benefits like primary care and pharmaceutical drug coverage and collecting fees that are like health-insurance premiums.

Washington state’s insurance commissioner went further in August, fining both Aliera and Trinity for selling “sham” health-care-sharing ministry memberships. The state commissioner, Mike Kreidler, had previously ordered Aliera and Trinity to halt illegal health insurance sales and “deceptive business practices.”

(Updates with additional context about Aliera beginning in the fourth paragraph)

--With assistance from Katherine Chiglinsky.

To contact the reporters on this story: John Tozzi in New York at jtozzi2@bloomberg.net;Emma Court in New York at ecourt1@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett, Mark Schoifet

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