With Colorado's decision, Friday Health Plans is in receivership in all the states in which it operates

Officials in Colorado and North Carolina landed a one-two punch on troubled insurer Friday Health Plans as the company prepares to close its doors.

Both states put Friday into receivership, meaning that the seven states in which Friday operated now have done so, and it no longer has any control over any of its health plans.

In a statement, Colorado Insurance Commissioner Michael Conway urged the insurer's "continued cooperation to avoid policyholder disruption both in Colorado and in other states to the greatest extent possible.”

The statement assured Friday’s approximately 35,000 members in Colorado that the state will “do everything possible to evaluate the ability of the company to continue through the end of the plan year.”

The statement also said that “healthcare providers can expect to still be paid for their services in accordance with the contracts they have with Friday Health.” Conway will have the “authority to take any necessary actions to protect policyholders, creditors, claimants and the public.”

Ari Gottlieb, principal at A2 Strategy Group and a nationally known healthcare strategist who’s kept a close watch on the insurtech industry, told Fierce Healthcare that Friday Health Plans is down to the final weeks of existence.

“Which creates problems for regulators,” said Gottlieb. “But it also means significant disruption for members who will have to pick a new health plan in the next month or two and lose all credit for any deductibles that they achieved for the year.”

Friday plans to lay off its employees in Alamosa, Colorado, between June 23 and July 6, reneging on its promise to give workers at least a 60-day notice if they were going to be laid off, saying in an email that state regulators 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.”

At one time, the Alamosa office employed 300 individuals.

“This will devastate the community of Alamosa, where Friday was the largest employer,” Gottlieb said.

He added that while the states can put pressure on other health plans that former Friday policyholders will sign on with to forgo making members pay new deductibles, regulators have no legal recourse to force insurers to do so.

“And so far, it doesn’t seem like any health plan’s going to,” said Gottlieb.

North Carolina moved slower than other states—such as Texas or New Mexico, in which Friday didn’t offer plans this year—because it didn’t appear that Friday struggled financially as much in that state, Jayson Tyson, a spokesperson for the North Carolina Department of Insurance, told Fierce Healthcare.

“It may look like we were slow, or maybe took our time with all these actions, but our team was very tactical,” Tyson said.

If there’s a silver lining it’s that “Friday’s members don’t have to worry about their claims being made,” said Gottlieb.

“The system protects members, with the exception that they have to pick a new plan. They may not be credited with the deductibles they’ve already paid," he said. "They may have to see new providers. They may need to switch to new medications. Things like that. But in no way will members be punished or responsible for any claims, which is the way the system is designed to work.”