Friday Health layoffs loom
ALAMOSA – Friday Health Plans, the Denver-based health insurance company operating in Alamosa, plans a round of employee layoffs.
Friday Health offers insurance plans to individuals and small businesses that buy their own insurance.
In an email to the Valley Courier, Tracy Faigin, chief marketing and experience officer with Friday Health, confirmed layoffs stating, "After careful consideration, we recently informed our team that we have made the difficult and necessary decision to reduce our workforce to align it with the size of our membership.
While this is difficult for all of us at Friday Health Plans, and especially for our friends and colleagues who will be impacted, we remain committed to our mission of delivering affordable health insurance with benefits that work for independent individuals and families. Friday members continue to have full access to health benefits and services as normal."
Faigen said the layoffs are company-wide and declined to comment on the number of employees to be let go.
Friday Health was formed in 2015 by Sal Gentile and David Pinkert, two healthcare technology entrepreneurs. The company was initially named Melody Health Insurance.
In 2017, the company acquired Alamosa-based Colorado Choice Health Plans, a 45-year-old company that primarily served individuals and employers in rural Colorado. From 2017 to last year, Friday Health experienced explosive enrollment growth. In 2011, the company had over 70,000 members in Colorado, New Mexico, Nevada, and Texas, a 400% increase in membership over the previous year.
"Colorado Choice has been proud to serve our members since 1972 in many Colorado counties where residents don't have a lot of health coverage options," said Cindy Palmer, CEO of Colorado Choice in a 2017 press release. "Joining with Friday is a great opportunity to continue our mission locally and in new service areas."
In a 2019 talk at DisruptHE Denver, Gentile said of the Alamosa employees at Colorado Choice, "It had great people…It had wonderful people, as did the rest of the company."
That year, the company raised $50 million to "support Friday's expansion in Colorado and into new markets," according to a company press release.
In 2021, the company raised $160 million by selling $100 million in an equity offering and an additional $60 million in a debt offering. At the time, Sal Gentile said in a press release issued by investor Peloton Equity, "This funding will not only allow us to offer health plans to more people but will also accelerate Friday's technology innovation."
"There's great demand for affordable customer-driven insurance and expanding nationwide will help bring better insurance options to those who need it most," said Norm Alpert from Vestar Capital Markets, an investor in Friday Health.
Friday Health raised $120 million in May last year to support enrollment growth. The company raised $70 million of that by selling an equity investment to a consortium of investors comprised of Leadenhall Capital Partners, Vestar Capital and Peloton Capital, and $50 million was raised in a debt offering. Leadenhall Capital is a London-based institutional investment management company specializing in insurance-related businesses.
Between 2015 and 2021, the company raised at least $330 million, according to company and investor press releases and documents filed with the Securities and Exchange Commission.
Things changed rapidly last year at Friday Health. In late November, the Valley Courier reported the company was reducing the number of states it operated from seven to five, eliminating coverage in New Mexico and Texas effective Jan. 1, 2023.
At the time, Faigin, told the Valley Courier in an email, "Friday Health Plans will continue to provide health plans as part of the Affordable Care Act in Colorado, North Carolina, Georgia, Nevada, and Oklahoma.
"We're in seven states now and will be in those five states in 2023. We'll be available in all the same regions we've been in Colorado, including the valley, for the years we've been in business. We're in Colorado. We're staying in Colorado. We're a Colorado-based company."
Regarding the departure from Texas, Faigin said, "Texas was our largest state in terms of the numbers of members. We enrolled more members than we anticipated which meant increased costs of operation."
In a follow-up interview with the Valley Courier, CEO Gentile said that pulling out of Texas resulted in a reduction in the company's revenue of "about half."
The company laid off 55 employees in Alamosa last November as part of a 20% company-wide staff reduction. The company had about 450 employees in Alamosa at the time.
Less than a month later, in a Dec. 2, 2022, press release, Friday Health announced that Beth Bierbower, Chairperson of Friday's Board and a former Humana executive, had been appointed CEO, effective immediately. Former CEO Sal Gentile and former President Dave Pinkert had left the company, with Gentile continuing to serve as an outside senior advisor to Friday.
The Valley Courier has requested that Friday Health make public the number of staff reductions in their Alamosa operation when they are known.