Since last fall, several state insurance departments have made moves to restrict the financial autonomy of two startup health plans, Bright Health and Friday Health Plans.
The two companies operate across many markets and regulators are only supervising operations within their respective states, not the companies as a whole. Insurance departments have cited an inability to pay member claims or maintain a minimum surplus as key reasons for why they intervened.
Four recent state regulatory moves:
1. Oklahoma placed Friday Health under financial supervision April 5 over concerns about the company's "declining financial situation." Friday must present a plan to attain sufficient capital and surplus as required by Oklahoma law. It cannot add any new members in the state or spend more than $5,000 without permission.
2. Texas regulators placed Friday Health Plans into liquidation March 23 and ordered the company to end all business in the state. A district court in Austin found that Friday's Texas subsidiary is insolvent and had not maintained a minimum surplus of $1.4 million under state law.
3. Tennessee regulators filed a financial supervision order Nov. 4 against Bright Health, but only made the document public on March 14. Until further notice, Bright's Tennessee subsidiary is not allowed to spend more than $10,000 on anything without the state's approval and it may be required to pay for an on-site state employee to monitor its finances.
4. Florida has been supervising Bright Health's operations in the state since last fall and plans to continue until at least May 1, according to a supervision order extension filed March 1. Bright is not allowed to spend more than $10,000 on anything without the state's approval and it has to pay for an on-site state employee to monitor its finances. The supervisor is allowed "complete and unrestricted" access to the company's financial records, bank accounts and physical assets.