A Nevada medical insurer could be placed under state supervision after findings of financial inconsistencies.
The Nevada Division of Insurance on Thursday filed a motion in District Court to place Friday Health Plans under regulatory supervision. If the motion is approved, it would give day-to-day control of the medical insurer to the Division of Insurance, according to Nevada Insurance Commissioner Scott Kipper.
He said this move is “relatively unique” and would allow the Division of Insurance to conduct a more thorough financial review of Friday Health Plans’ operations in Nevada, but it wouldn’t immediately affect the 2,805 Nevadans covered by the company’s policies.
“Things would not change appreciably with what they’re doing,” Kipper said. “(Policyholders) would still be required to pay their premiums, and (Friday Health Plans) would still be required to evaluate any claims and pay them according to the terms of their contract.”
Friday Health Plans is a health insurance company based out of Colorado and is “built for people who buy their own health insurance” or anyone that doesn’t get health insurance as part of their job, according to the company’s website.
Kipper said the Insurance Division made its motion after it received six to nine months of “inconsistent financial filings” from Friday Health Plans.
“The level of capital and reserves seem to be a bit of a moving target,” he said. “Anytime we see something like that raises some grave concerns for us.”
Kipper declined to go into further detail on the financial inconsistencies. But he noted the Division of Insurance hasn’t received a high number of consumer complaints of Friday Health Plans’ services.
Friday Health Plans said it agrees with the takeover by state regulators.
“Unfortunately, Friday 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,” said a statement on the company’s website. “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.”
Officials with Friday Health Plans didn’t respond to a request for further comment on the motion or how it will affect its Nevada customers.
The Division of Insurance is “very much aware” of the statement Friday Health Plans put out announcing the end of its business operations, according to Kipper. But he was non-committal about what it means in the near future for the Nevadans covered by the insurer.
“We’ve had numerous conversations with (Friday Health Plans) leadership over the course of the last several months,” Kipper said. “The order that we put in is focused on conservation of the company and making sure that the policyholders are treated as equitably as they had before the order was placed.”
If the state’s motion is approved, it could take the division “roughly” three to eight weeks to complete its financial review of Friday Health Plans and decide what should happen to the Nevadans covered by the insurer, Kipper said.
Friday Health Plans has been operating in Nevada since May 2020, according to the Division of Insurance. The motion indicates the insurer has operations in five other states: Colorado, Texas, Georgia, Oklahoma and North Carolina.
Similar regulatory actions have been taken by other states where Friday Health Plans operates. The motion indicates Friday Health Plans’ operations in Texas were ordered to liquidate, WSB-TV in Georgia reported that an estimated 37,000 people in that state will need to find another insurance company, and the Colorado Sun reported that 30,000 Coloradoans will need to find a new insurer.
Kipper wouldn’t commit to forcing Nevadans covered by Friday Health Plans to find a new plan if the state’s motion is approved. But he acknowledged that Nevadans covered by Friday Health Plans may need to find a new insurer pending the outcome of the financial review.
Anyone with questions about the supervision motion or Friday Health Plans’ policies in Nevada should reach out to the Division of Insurance, Kipper said.