Sharity Ministries Inc., a medical-cost-sharing nonprofit for Christians, has filed for bankruptcy protection in an effort to keep operating amid accusations by state authorities that it deceived consumers by running a sham health-insurance business, WSJ Pro Bankruptcy reported. The nonprofit said that it would use bankruptcy to break many of its contracts with Aliera Cos., which provides administrative, marketing, sales and other services to Sharity, according to papers filed Thursday in the U.S. Bankruptcy Court in Wilmington, Del. Aliera is also under investigation by state authorities for allegedly evading insurance regulations. Sharity operates a healthcare sharing ministry that covers certain medical expenses submitted by its roughly 10,000 members from voluntary contributions made by other members, according to court papers. In October, New York state accused Aliera and Sharity of running a sham insurance business in a manner designed to evade regulation. Although Aliera and Sharity say they aren’t health insurers and don’t guarantee the payment of claims, they advertise in New York as healthcare alternatives, state officials said. A hearing on the New York matter is scheduled for this fall. Sharity has said that it pays a medical expense if it deems the request eligible and if there are enough member contributions to cover that expense. Regulators in California, New Jersey, Texas and Georgia are also investigating Sharity, according to court papers.
