Members of a defunct medical cost-sharing group want its administrator, Aliera Cos., forced into chapter 11 bankruptcy after winning more than $25 million in lawsuits alleging they were misled into buying sham health insurance of little value, WSJ Pro Bankruptcy reported. The involuntary bankruptcy petition filed against Aliera followed two federal court rulings last month that found it misled or defrauded members of Christian health nonprofit Sharity Ministries Inc., which is now liquidating in bankruptcy. Aliera acted as administrator for Sharity’s healthcare offerings, providing marketing, sales and other support services, according to court records. Sharity filed for chapter 11 in July and won court approval last week to wind down as its members pursue Aliera for roughly $318 million in allegedly unpaid medical bills. Now that Sharity has collapsed, its members are expected to recoup no more than 10 cents on the dollar on their claims, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Del. Members have alleged in several lawsuits that Aliera’s founders created and controlled Sharity, using it to sell healthcare plans that looked like cheaper versions of genuine health insurance to vulnerable people needing coverage. As much as 84% of member payments were siphoned to Aliera and its owners, rendering Sharity insolvent and denying coverage of medical expenses that members said they were assured would be handled, according to court papers filed by Sharity members. Aliera’s failure to respond to lawsuits led federal judges to rule against it last month by default.
