Colorado the latest to liquidate Friday Health Plans

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Due to the financial instability of Friday Health Plans of Colorado and growing concerns about healthcare providers refusing to treat Friday enrollees, the Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), is asking the courts to move Friday Health into liquidation.

Colorado marks the latest state to put Friday Health Plans into receivership, joining Texas, Georgia, Oklahoma and North Carolina.

Their health plans in Colorado will terminate on August 31. As a result, a special enrollment period (SEP) will begin immediately for current Friday members so they can sign up for new coverage.

Earlier this year, Democratic governor Jared Polis signed HB 23-1303, legislation supported by the DOI, which added Friday Health to the Colorado Life and Health Guaranty Association. This ensured that providers and Colorado consumers would be protected in the event that Friday failed.

The DOI said it would ensure that healthcare providers will be paid both through Friday's remaining assets and through the Guaranty Association.

On June 21, the DOI took control of Friday Health Plans of Colorado, placing them into rehabilitation. This allowed the Division to analyze the company's financial projections in greater detail, which led to concerns that the company would not be able to make it through the end of the year.

"Allowing the company to continue operations at this point could negatively impact Colorado consumers trying to enroll in health insurance during the upcoming open enrollment for 2024, leading to consumer confusion and creating additional problems," the DOI wrote.

WHAT'S THE IMPACT?

Doctors, hospitals and other healthcare providers will still be paid for claims submitted for services to people with health insurance from Friday. The Guaranty Association will pay claims, doling out up to $500,000 (the statutory limit) for claims for each person covered by Friday.

As for the impact to consumers, people who enroll in the SEP between July 17 and August 31 will have their new health insurance start on September 1. Individuals who enroll after August 31 will have their coverage start on the first of the month after enrolling in a new plan.

If a Friday enrollee attests to difficulty in accessing healthcare, and needs an August 1 effective date of their new coverage, the DOI has created an emergency SEP. Enrollees should report the loss of coverage as July 31 instead of August 31 when applying for new coverage. The emergency SEP is only available July 17 - 31, 2023.

People enrolled in a plan from Friday Health through Connect for Health Colorado or through Colorado Connect, including the OmniSalud program, can select new health insurance through those enrollment platforms.

Insurance brokers who help Friday members find new coverage should know that the DOI plans to issue an emergency regulation requiring the health insurance companies to maintain their current commission structures. Small businesses enrolled in small group plans from Friday should contact their insurance brokers about how to choose a new plan for their employees, according to the Colorado DOI.

In order 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. Kaiser Permamente, for example, has agreed to honor people's deductible and out-of-pocket maximum accumulations. Of current Friday enrollees, 85% have access to a Kaiser plan.

Denver Health is still working through a decision about this. Anthem, Cigna and Rocky Mountain Health Plans will not honor Friday members' deductibles and out-of-pocket maximums so far for 2023. People enrolling in these plans will have to start over with these cost accumulators as of September 1.

THE LARGER TREND

Friday Health Plans was launched in 2015. The Colorado Sun reported that the demise of the company had been brewing for some time; in 2022 the company pulled out of Texas and New Mexico, and as a result offered plans in only five states in 2023.

Earlier this year, Texas regulators seized the company's assets in that state and began liquidating them, while operations in Oklahoma were placed under regulatory supervision last month.

Several weeks ago, Georgia's Office of Commissioner of Insurance and Safety Fire determined that continued operation of Friday Health Plans was not possible without putting policyholders at risk. According to the Atlanta Journal-Constitution, this could result in a loss of coverage for about 35,000 Georgians. Enrollees in other states will be affected as well, with the Colorado Sun estimating that about 30,000 Coloradans will need to seek new coverage.

North Carolina placed Friday Health plans into receivership in June.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com