Parent company has become insolvent, threatening Colorado company.
DENVER - On Wednesday, June 21, the Colorado Division of Insurance (DOI) petitioned the Denver District Court for an order for rehabilitation of Friday Health Plans of Colorado.
The DOI, part of the Department of Regulatory Agencies (DORA), has had Friday Health Plans of Colorado under supervision since June 2022. In recent months, the parent company, Friday Health Plans, Inc., has been unable to raise the capital needed in order to continue. At the end of May, the parent company informed the DOI that it would wind down its business activities throughout the country, and would work with state insurance regulators on that process. On June 6, the Division petitioned the court to seize the company and the court granted the petition on June 7.
Now, that inability to raise capital means that the parent company has become insolvent, which puts Friday Health Plans of Colorado into jeopardy. It is because of the hazardous condition of the company that the Division is requesting to put Friday Health Plans of Colorado into rehabilitation. The parent company, through its board of directors, has consented to the rehabilitation order.
Under such an order, the Colorado Insurance Commissioner will be appointed as receiver, with the authority to administer the company’s assets. As the receiver, the Commissioner is granted authority to take any necessary actions to protect policyholders, creditors, claimants and the public.
The Division now awaits an order from the court granting the petition or setting a hearing date on the matter.
“We are thankful to the Board of Directors and the management of the parent company of Friday for their consent in this matter. We urge their continued cooperation to avoid policyholder disruption both in Colorado and in other states to the greatest extent possible,” said Colorado Insurance Commissioner Michael Conway.
Impact to Policyholders
A key reason in seeking the rehabilitation order is to protect the coverage of Coloradans who currently have a Friday Health Plan policy. It will allow the Division to do everything possible to evaluate the ability of the company to continue through the end of the plan year. The Division will continue to provide updates as the situation evolves.
As part of the management of the various state entities of Friday, the parent company used vendors for the core of its operations. To help maintain continuity for members, the DOI is working to continue those operations after the parent stops working with those vendors.
However, policyholders must continue to pay their premiums to continue coverage.
Impact to Health Care Providers
Health care providers can expect to still be paid for their services in accordance with the contracts they have with Friday Health. In addition, because of HB 23-1303 that the Division championed in passing, Friday Health Plans of Colorado, Inc., is now a member of the Colorado Guaranty Association. In the event that Friday is unable to pay claims, the Guaranty Association will provide protection for providers and consumers up to the statutory cap of $500,000.00 for each insured.
- Policyholders should refer to this list of Frequently Asked Questions (FAQs) for Consumers concerning this situation with Friday Health.
- Health care providers such as doctors and hospitals should refer to the FAQs for Health Care Providers.
The Division will continue to update these lists of questions as the situation evolves.
If people experience problems with their Friday Health insurance - using their insurance, getting claims paid, finding health care providers - they can contact the Colorado Division of Insurance Consumer Services Team: 303-894-7490 / DORA_Insurance@state.co.us / doi.colorado.gov (click on “File a Complaint”).
About the Division of Insurance:
The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), regulates the insurance industry and assists consumers and other stakeholders with insurance issues. Visit doi.colorado.gov for more information or call 303-894-7499 / toll free 800-930-3745.
DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 800-886-7675.