The rise and fall of Friday Health Plans
Nevada and Georgia force Friday Health into receivership
ALAMOSA — Friday Health Plans was dealt another blow late last week when
Nevada Insurance Commissioner, Scott Kipper, filed legal action with the Nevada District Court to place Friday Health Plans of Nevada under regulatory supervision (referred to as a receivership) due to growing concerns about the "reliability of Fridays. financial reporting to the Division."
Last week regulators in Georgia forced Friday Health into receivership due to "reported insolvency and inability to raise additional funds from outside investors."
According to a press release from the Georgia Office of Insurance and Fire Safety Commissioner, "This action will allow the Commissioner to assume oversight and management of the day-to-day operations of the company."
This is the latest bad news for the company after the Colorado Division of Insurance commissioner announced late last week the entire enterprise will be winding down by the end of this year.
Friday Health was founded in 2015 when entrepreneurs Sal Gentile and David Pinkert bought the Alamosa-based insurance company Colorado Health Plans Inc. They soon renamed the company Friday Health Plans.
After a series of private placements to raise capital, Friday Health received $50 million in 2019 from Leadenhall Capital and Peloton Equity. In 2021, Friday raised an additional $160 million from Vestar Capital and Leadenhall who would lend Friday Health an additional $120 million in May of 2022.
Friday Health had a spectacular rise, raising hundreds of millions of dollars in financing, enrolling 300,000 to 400,000 customers who bought their health insurance from Friday, and the company hiring 300-400 employees. Most of the employees are based in Alamosa.
March of 2022 was by all outward signs from Friday Health, a heady time of growth and expansion. It had bought a parking lot in Alamosa, leased another parking lot, and had plans for an expanded corporate headquarters in Alamosa. The company said it would break ground on the Alamosa building located at San Juan Avenue and 6th Street by May or June. Executives said the company was hiring as many as 15 new employees weekly. Those exuberant times would be short-lived.
In November 2022, Friday Health announced it was scaling back from operating in seven states to five states, eliminating offering insurance in Texas and New Mexico. At the time, Tracy Fagin with Friday Health told the Valley Courier the company had a banner year for enrollment, yet "Texas was our largest state in terms of the numbers of members... we enrolled more members than we anticipated which meant increased costs of operations."
Fagin also said the company was in good standing in the five remaining states where it operated. That too would be short-lived. Fagin said the Alamosa building had been placed on hold and the project would be revisited in a year. A week after the interview, Friday Health announced that 55 Alamosa employees had been laid off.
In early December 2022, both Sal Gentile and David Pinkert departed Friday Health. New CEO Beth Bierbower was hired to run the company.
In early March 2023, Friday Health announced 98 employees would be terminated from Alamosa and Denver. A few weeks later, Texas officials seized and began liquidation of what was left of the company in that state. In early March, the state of Georgia announced that it was placing the company into administrative supervision to "try to cure its surplus deficiency reported to our office on March 3."
In early April, regulators in Oklahoma placed the company under its supervision.
On April 17, the North Carolina Department of Insurance placed the company in a state of "suspended suppression," effectively barring the company from selling any more insurance.
By mid-April, the Colorado Division of Insurance was advocating changes to state law to protect consumers from failed insurers. Insurance Commissioner Michael Conway told the Valley Courier in an interview regarding the legislation and the actions taken by other states, "The state of Texas has put that license into liquidation, and the state of Oklahoma has taken action against its license. We are concerned about those issues, and we are staying very close to Friday [Health Plans Inc.]."
By April, the company was reported to be in negotiations with creditors seeking additional financing.
After the state of Colorado announced Friday Health would "wind down" operations in Colorado, the company issued this statement, "Friday Health Plans has grown incredibly quickly, which is testament to our ability to deliver affordability, sustainability, and outstanding customer service. Unfortunately, Friday has been unable to scale our financial infrastructure to match the pace of our growth and secure the additional capital to run our business."
The lenders to Friday Health were tapped out.
As for consumers who have health insurance with Friday, the Colorado Insurance Division reiterated this from their statement from last week, "Currently, based on the company's financial reporting, the Colorado licensed entity, Friday Health Plan of Colorado, has sufficient capital to continue for the remainder of 2023. Of course, we will continue to monitor the situation as we move forward. "