Layoff of 323 employees expected
DENVER— In an exclusive interview with the Valley Courier Wednesday morning, Colorado Insurance Commissioner Michael Conway discussed the future of Friday Health Plans.
When asked why Colorado has not taken steps to place Friday Health into receivership as several other states have, Conway said, “We will have taken action by 5:00 p.m. today.” Conway added a press release will be issued later today detailing exactly what that action will be.
In recent weeks, Texas, Nevada, Oklahoma, North Carolina, and Georgia have either seized the operations of the insurance company or put it into receivership.
As previously reported, Friday Health Plans will lay off all of its employees by July 6th. Documents filed by Friday CEO Elizabeth Bierbower with the Colorado Division of Labor and Employment indicate the company will terminate 323 employees.
Conway added the division has been working with healthcare vendors who do business with Friday to continue operations.
If Friday Health is put into receivership, policyholders of Friday Health Plans will be protected.
James Rhodes of the Colorado Life and Health Protection Association said this in an email, “The Association provides up to $500,000 of coverage per insured life for policyholders of member health insurers and HMOs. The Association’s obligations are triggered if an order of liquidation is issued by a court of competent jurisdiction for one of its members.
“At this time, based upon our conversations with the Colorado Division of Insurance, the Association does not expect to be triggered in connection with Friday. However, should the company be ordered liquidated, we stand ready to provide coverage for its Colorado policyholders.”
For more on this breaking news, please check this website and the Friday print edition of the Valley Courier.
THIS ARTICLE FIRST APPEARED IN WEDNESDAY’S PRINT EDITION:
ALAMOSA — Friday Health Plans, the Denver-based insurance company that at one point had over 300 employees in Alamosa, has notified all employees they will be laid off between June 23 and July 6. This new schedule of layoffs is in sharp contrast to the prior news the company would be winding down operations by the year’s end.
An email sent to Friday Health employees obtained by the Valley Courier states, “As you are aware, Friday Health Plans Management Services Company, Inc., (“FHP”) has been seeking additional capital to allow FHP and its affiliates to continue servicing our policyholders. Unfortunately, those efforts have not been successful and as a result FHP must wind-down its operations. FHP anticipated that any wind-down, if it became necessary, would occur over the course of several months, with employee separations beginning no sooner than 60 calendar days after FHP determined a wind-down of its operations would be necessary, and FHP being able to provide at least 60 calendar days’ notice of employment separation dates to affected employees.
“After being unsuccessful in obtaining additional capital, FHP has now learned that the timing for the wind-down is heavily dependent on state regulators’ efforts to transition policyholders and their need for FHP to continue providing administrative services for claims runout. The uncertainty associated with this transition and precipitous drop in revenue, and whatever decision state regulators make with respect to FHP’s role in providing administrative services, which decision is outside of FHP’s control, has created business circumstances that were not previously reasonably foreseeable and that FHP has now determined will result in affected employees receiving less than 60 calendar days’ notice prior to their employment separation dates.
“This notice informs you that your employment with FHP will end in connection with FHP’s wind-down of its business operations. All employees at FHP’s locations at 700 Main Street, Alamosa, Colorado and 1777 S. Harrison St, Denver, Colorado, and all FHP remote employees will have their employment end as a result of this action. This wind-down of operations and the related employment terminations are expected to be permanent. “, and all FHP remote employees will have their employment end as a result of this action. This wind-down of operations and the related employment terminations are expected to be permanent.”
In other Friday Health news, Jason Tyson, communications director with the North Carolina Department of Insurance has confirmed that the state is moving to place Friday Health in that state into receivership.
Earlier this month, Colorado Governor Jared Polis signed legislation to enable the Colorado Life and Health Protection Association to cover consumers who have health insurance from failed companies such as Friday Health and cover medical costs up to $500,000.
The Valley Courier has reached out to Colorado Insurance Commissioner Mike Conway seeking comment on what coverage consumers can expect after July 6. While other states such as Texas, Oklahoma, Georgia and now North Carolina, have placed Friday Health into receivership, Colorado has been reluctant to do so. As previously reported here, Conway has stated he believed the company had the resources to function until the end of the year. Now, if the company will have no employees after July 6, it is unknown what insurance, if any, members will have or when the Colorado Division of Insurance or the Colorado Life and Health Protection Association will assume control of insurance for members.
Friday Health CEO Beth Bierbower did not respond to a request for comment.
San Luis Valley Health continues to accept Friday Health Plans insurance according to spokeswoman Donna Wehe.
As of press time, the Colorado Department of Labor and Employment does not list the required notification of employee layoffs from Friday Health.