Friday Health Plans, a leading tech-based health insurance company, is undergoing a significant transition that will impact its operations in Colorado. Due to rapid expansion without adequate capital, the Denver-based company has been forced to make some tough decisions. As a result, all 322 employees in Colorado will be laid off, altering the company’s plans for the remainder of the year.
Earlier this month, Friday Health Plans announced a “wind down” of its operations, recognizing the financial challenges it faced. The initial intention was to allow Coloradans to retain their health insurance plans until the next enrollment period. However, insurance regulators in all seven states where Friday Health operates have prohibited the company from accepting new members. Additionally, the company has been placed in receivership in at least four states.
The current circumstances, which were unforeseen, have created uncertainty regarding whether Friday Health will be able to continue processing claims or if members will be required to enroll in alternative plans. In a Worker Adjustment and Retraining Notification Act (WARN) notice to the Colorado Department of Labor & Employment, dated June 19, the company stated that these circumstances have led to the decision to lay off all employees.
The layoff filing included various roles affected by the decision, such as C-suite executives, department directors, medical specialists, claims analysts, nurse coordinators, and care crew representatives. The Colorado Division of Insurance initially believed that Friday had sufficient capital to continue operating normally until the end of the year. However, the division is now diligently assessing the situation and collaborating with other states to explore possible alternatives to keep Friday Health Plans running. Efforts are also underway to ensure continuity with the vendors responsible for the core operations of the company.
Friday Health Plans experienced exceptional growth, with a 300% increase in enrollment in 2022. However, the company had to lay off 98 employees in March and later announced a halt in enrolling new members for its Colorado health plans. Subsequently, enforcement actions were taken by regulators in Texas, Oklahoma, Nevada, Georgia, and North Carolina due to Friday’s financial instability.
Established in 2015, Friday Health Plans aimed to leverage technology to enhance insurance affordability and improve customer experience. The company successfully secured over $300 million in capital to support its endeavors. As the situation continues to unfold, the Colorado Division of Insurance assures stakeholders that they will receive regular updates on the progress and outcomes of their efforts to address the challenges faced by Friday Health Plans.