Arches Health Plan shutting down

Posted at 4:53 PM, Oct 27, 2015
and last updated 2015-10-28 12:08:26-04

SALT LAKE CITY -- The Utah health insurance company, Arches Health Plan, will be closing, officials announced Tuesday.

The insurance company will move to receivership, which will allow the Insurance Commissioner to supervise the process of closing out current policies. Policy holders will remain insured until Dec. 31, 2015, but Utahns will no longer be able to purchase insurance from Arches.

The closure will affect about 45,000 policy holders, many of which were located in Grand County and other rural areas of the state.

“The Insurance Department has been working with Arches and the federal government to find solutions and a way for Arches to move forward,” said Insurance Commissioner Todd E. Kiser. “However, today, all parties reached a united decision that placing Arches into receivership is the right course of action for the people of Utah.”

The move to receivership is due to a shortfall in the federal government’s risk corridor program, according to a press release from Utah Insurance Health Department.

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The risk corridor program was intended to protect insurers from losses by reallocating funds between insurers. But on Oct. 1, the federal government announced that it was only able to pay a fraction of the funding that insurers, including co-ops like Arches, requested from the program, the release states.

Co-ops were created under the Affordable Care Act as nonprofit health insurers to offer health insurance to individuals and small employer groups, the release indicated.

“At the end of the day, when that Risk Corridor program was not paying out as it was originally designed to do, none of us can fix that in the short period of time we have to work with,” said Tricia Schumann, spokeswoman for Arches Health Plan.

Arches is not the first co-op to fail. Co-ops in Nevada, Colorado, Oregon, as well as six other states have also fallen into receivership in recent months.

“It is regrettable that the co-op model has not worked across the country,” Kiser said. “I want to assure you that the Utah Insurance Department supports the state’s free market and works to help businesses succeed. We are proactively working with other insurers and the federal government to fill the vacancy left by Arches, particularly in the rural areas of the state.”

Utahns who have individual health policies through Arches should contact their insurance agent or visit during open enrollment, which begins Nov. 1.

Policy holders will need to purchase health insurance from another company prior to the end of their current plan, Arches officials stated.

“This is going to create a vacuum in the counties. We know that. Some of the counties are going to have limited resources available to them,” Kiser said.

To learn more about how this affects currently policy holders, visit