WASHINGTON – The U.S. Department of Labor has obtained a judgment barring a plan administrator and its CEO Shelley Steele from serving as fiduciaries or service providers to any plan covered by the Employee Retirement Income Security Act, amid allegations they improperly paid themselves and affiliated businesses more than $100 million.
The action in the U.S. District Court for the Northern District of Georgia follows an investigation by the Philadelphia, Atlanta and Boston regional offices of the department’s Employee Benefits Security Administration. The investigation found The Aliera Companies, doing business as Aliera Healthcare Inc., and Steele commingled hundreds of millions of dollars in funds received from individuals and ERISA-covered health plans.
Based in Atlanta, Aliera created, marketed, sold and administered health coverage for approximately 1,025 employers across 39 states for ERISA-covered employer-sponsored plans. The company and its CEO serve as fiduciaries to more than 1,000 U.S. employer-sponsored health plans.
“Shelley Steele and The Aliera Companies flagrantly violated their duties as fiduciaries by failing to act solely in the interest of plan participants and their beneficiaries,” said Acting Regional EBSA Director Norman Jackson in Philadelphia. “This judgment should serve as a warning to other fiduciaries who choose to place the interests of themselves over the plan participants.”
Aliera partnered with healthcare sharing ministries and sold healthcare products to individuals and ERISA-covered employer-sponsored group health plans that included a claimed health care-sharing ministry component. The company received at least $543,941,705 in healthcare payments from individuals and employer-sponsored group plans and commingled these payments. Although the vast majority of the payments Aliera obtained were made by individuals, the company also received more than $17 million from more than 1,000 ERISA-covered employer-sponsored group plans.
A lawsuit filed by the department’s Office of the Solicitor alleged that Aliera and Steele made payments of more than $100 million from those commingled funds to Aliera, Steele and their affiliated businesses, and only used approximately $189,226,916 of the money it received to pay healthcare claims for individuals and ERISA-covered plans. The Aliera Companies Inc. filed for bankruptcy in federal court in Delaware. On August 4, 2023, the department filed a proof of claim in the ongoing bankruptcy proceedings in the amount of $3,874,950 for the amounts owed by Aliera to more than 1,000 ERISA-covered plans.