Denver-based insurer Friday Health Plans, which has about 30,000 customers in the state, is ceasing operations after running into regulatory trouble in numerous states.
The company said in a notice on its website that it “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,” the company said.
Colorado Insurance Commissioner Michael Conway said in a statement that Friday currently appears to have “sufficient capital to continue for the remainder of 2023,” but that the state’s insurance division will continue monitoring that.
“Friday’s problems are national — the company’s aggressive growth in other states around the country got ahead of their financing,” Conway said. “While Friday Health Plan of Colorado has maintained the capital required by Colorado law, the problems in other states and with the parent company are now impacting the company here.”
Friday Health was founded in 2015 as Melody Health Insurance, and changed its name in 2017, when it acquired Alamosa-based Colorado Choice Health Plans.
The company, which still has a sizable base of employees in Alamosa, first offered plans outside Colorado in 2019. It offered plans in five states this year: Colorado, Georgia, North Carolina, Nevada and Oklahoma. That was two fewer states than 2022, when the company also offered plans in Texas and New Mexico.
Friday overextended itself in many of those states.
In March, a Texas judge issued an order finding Friday Health was insolvent in the state. A receiver was appointed to liquidate the company, according to the Texas Department of Insurance’s website. Texas accounted for 75 percent of Friday Health’s members, the company told an Alamosa newspaper in April.
In Oklahoma, the state insurance commissioner announced in April he had placed Friday Health “under supervision” of the Oklahoma Insurance Department, citing the company’s “declining financial position.”
In Georgia, Friday has been unable to enroll new members since April 13, a spokesman for the state’s insurance commissioner said. The company’s Georgia operations were placed into “administrative supervision” on March 8 because of the company’s “insolvent financial condition,” a commissioner spokesman said.
In North Carolina, Friday was barred from enrolling new members in April. A few weeks later, in May, the same thing happened in Colorado.
The company has reported multiple rounds of fundraising to the U.S. Securities and Exchange Commission, most recently a $70.95 million round in May 2022.