March 17, 2025 – MedLegalNews.com – California Attorney General Rob Bonta has announced a $1.3 million settlement against Sedera, Inc. (Sedera) and Sedera Medical Cost Sharing Community, LLC (SMC) for illegally advertising and selling sham health insurance plans to more than 2,000 Californians. The settlement bars these companies from marketing or operating in California and provides $800,000 in consumer restitution and $560,000 in civil penalties.
Misleading Consumers with Fake Health Plans
California Attorney General Bonta: The California Department of Justice (DOJ) investigation found that Sedera and SMC falsely marketed their plans as both “non-insurance medical cost sharing” products and health care sharing ministry (HCSM) plans. However, since these companies collected mandatory monthly payments in exchange for medical service coverage, they functioned as unauthorized health plans—without complying with California’s consumer protection laws.
“Sedera and SMC sold these sham plans at lower costs because they ignored state laws requiring essential health benefits like preventive care,” said Attorney General Bonta. “This settlement bans them from operating in California and ensures consumers receive financial restitution.”
Settlement Terms: Strong Consumer Protections
As part of the agreement, Sedera and SMC must:
- Cease all sales, marketing, and operations of health plans in California.
- Prohibit transferring members to another plan or directing them to other cost-sharing entities.
- Delete all California customer records and notify members of plan termination.
- Pay $1.3 million in total penalties, with $800,000 allocated to consumer restitution.
California Cracks Down on Deceptive Health Plans
This settlement follows Attorney General Bonta’s broader crackdown on fraudulent health care sharing ministries.
- April 2021: DOJ issued a consumer alert warning Californians about fake HCSM plans.
- January 2022: Bonta filed a lawsuit against The Aliera Companies for misrepresenting itself as an HCSM.
- March 2023: California secured a $2.1 million settlement against Alliance for Shared Health for deceptive marketing practices.
Protect Yourself: Know Your Health Insurance Options
Californians should verify health plans through official sources like Covered California. If you suspect a fraudulent plan, file a complaint with the DOJ or the California Department of Insurance.
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