Arches Health Plan announced the closure Tuesday will which take affect January 1, 2016. The insurance company will move to receivership allowing the state Insurance Commissioner to supervise closing out of current policies.The closure will affect about 45,000 policy holders said to be located in Grand County and other rural areas of the state.
Arches website states, "Arches has been honored to provide a new kind of health care to Utahns – and we thank you for being part of this journey. Unfortunately, today we were asked by the State Department of Insurance to wind down our business due to a shortfall in the federal governments “Risk Corridor” program, and other factors beyond our control. This means that we will not be eligible to participate on the Exchange, or provide health insurance in 2016."
According to a press release from the Utah Insurance Health Department the move to receivership is due to a shortfall in the federal government’s risk corridor program. On October 1, the federal government announced it was only able to pay a fraction of the funding that co-ops like Arches relied upon. Arches and other companies were created under the Affordable Care Act as nonprofit health insurers to offer health insurance to individuals and small employer groups, the release stated.
Arches isn’t the first co-op to fail. Nevada, Colorado and Oregon as well as six other states have taken similar action with their co-ops in recent months.
"It is regrettable that the co-op model has not worked across the country," said Utah Insurance Commissioner Todd E. Kiser. "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."
Policy holders will have until December 31, 2015 to find another insurer.
Those who have health policies through Arches should contact their insurance agent or visit healthcare.gov. Open enrollment for new plans begins November 1. As long as premiums are paid up, any covered services or items pro to the end of the plan year will be paid by Arches in accordance with the terms of the policy.
For more questions about your Arches policy you can go to email@example.com/ The Utah Insurance Department may also be contacted though a hotline at 801-538-3077 or by email at firstname.lastname@example.org.