March 17, 2025 | Los Angeles, CA — MedLegalNews.com — California Attorney General Bonta, widely recognized for his leadership in consumer protection, 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.
This latest enforcement action marks another major victory for General Bonta and the California Department of Justice (DOJ) in their ongoing effort to hold deceptive health plan operators accountable. The Attorney General’s office continues to prioritize protecting consumers from fraudulent or misleading medical cost-sharing programs that pose financial and health risks to California families.
By taking decisive action, General Bonta reinforces California’s strong stance on fair business practices and consumer transparency, ensuring that only licensed, compliant entities can offer health coverage within the state.
Misleading Consumers with Fake Health Plans
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.
For full legal details, visit the California DOJ Official Statement website.
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FAQS: California Attorney General Bonta Settlement
What did California Attorney General Bonta announce about Sedera?
California Attorney General Bonta announced a $1.3 million settlement with Sedera, Inc. for illegally advertising and selling fake health insurance plans to Californians.
Why did California Attorney General Bonta take legal action against Sedera?
Attorney General Bonta took legal action after discovering Sedera falsely marketed unauthorized health plans, violating California’s consumer protection laws.
How will the settlement benefit affected Californians?
The settlement secured by California Attorney General Bonta includes $800,000 in restitution for more than 2,000 affected consumers and bans Sedera from operating in California.
Where can consumers verify legitimate health insurance plans?
Consumers can verify health insurance options through Covered California or report fraud to the California Department of Insurance.