Colorado regulators are pulling the plug on Friday Health Plans Colorado, a move that means more than 30,000 residents of that state must find other health coverage.
On Monday, the Colorado Division of Insurance asked the courts in that state to liquidate Friday Health Plans, meaning that their health plans in Colorado will terminate on Aug. 31.
A special enrollment period will begin immediately for current Friday members so they can sign up for new coverage. People who want coverage starting on Sept.1, must enroll in a new plan by Aug. 31. Individuals who enroll after Aug. 31, will have their coverage start on the first of the month after enrolling in a new plan.
To help Friday members during this transition, the DOI requested that other insurance companies in Colorado honor the deductibles and out-of-pocket maximums that Friday Health members have already accumulated for 2023.
Doctors, hospitals and other health care providers will still be paid for claims submitted for services to people with health insurance from Friday, pursuant to the contractual terms with the company. This action triggers the Guaranty Association to pay claims, and the association will pay up to $500,000 (the statutory limit) for claims for each person covered by Friday.
The Colorado DOI petitioned a Denver district court in June to put Friday into rehabilitation.
“Diving deeper into Friday’s finances after putting the company into rehabilitation, the division became concerned about its ability to make it through the rest of the year. As a result, I am taking this step to protect Coloradans and the people enrolled in Friday, and to protect the open enrollment process for 2024,” said Colorado Insurance Commissioner Michael Conway.
Friday announced in early June it would cease operations by the end of the year in the seven states in which it does business. Friday covers between 300,000 and 400,000 in the states of Colorado, Georgia, Texas, Nevada, New Mexico, North Carolina and Oklahoma and employs between 300 and 400 employees, the Alamosa (Colo.) Daily Courier reported. Friday is based in Alamosa.
“Friday Health Plans has grown incredibly quickly, which is a testament to the strength of our mission of delivering affordability, simplicity and outstanding customer service,” the company said on its website. “Unfortunately, Friday has been unable to scale our financial infrastructure to match the pace of our growth and secure the additional capital required to run our business. While we are deeply disappointed, we agree with the decision of our state regulators that it is necessary to wind down Friday’s business operations over time in accordance with the regulations in the states where we are operating.”
Friday stopped offering coverage in Texas and New Mexico in November amid concerns about the increasing costs of enrolling more members.