California bans 'sham' health plans, reaches $1.3M settlement

California has reached a $1.3 million settlement with Sedera and Sedera Medical Cost Sharing Community to resolve allegations that they advertised and sold "sham" health insurance plans to more than 2,000 people. 

The settlement also resolves allegations that Sedera and SMC falsely advertised their health plans as both non-insurance medical cost sharing products and as healthcare sharing ministry plans, according to a March 14 news release from the state.

Sedera and SMC are now banned from selling, marketing, and operating any health plans in California, and they cannot move any members in the state to another plan or direct them to any other cost sharing entities. 

From the settlement, $800,000 will be for consumer restitution and $560,000 will be for civil penalties.

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