Insurance and Real Estate Committee


Bill No.:




Vote Date:


Vote Action:

Joint Favorable Substitute change of reference

PH Date:


File No.:


Insurance and Real Estate Committee


The bill will allow the State to bring other employers – municipalities, small businesses (of up to 50 employees), and non-profits – into the State pool to obtain health insurance. This will result in savings for all taxpayers by positively impacting the state budget which will lead to tax relief.

Pooling of insurance purchasing will be advantageous to the additional entities covered due to the increased bargaining power, reduced administrative cost, and the positive effects of the State's healthcare cost containment efforts. The larger the pool the more the risk can be spread out over more participants, and this will save money not only for the State employee plans, but all other participating plans. At a time when premiums for some groups went up as much as 20% over the past few years, the State's rate increases have averaged 5%.

There are 24 other states already including municipal employees in their State employee health insurance pools. Adding a new option to the marketplace will encourage insurers to provide a higher quality, more affordable product, so even groups that do not participate should see benefits when they buy insurance outside of the plan.


Kevin Lembo, State Comptroller, testified at length to the Public Hearing. He stated, “As the state's fiscal guardian, I am deeply committed to… delivering government services more efficiently.” One aspect of operating the healthcare system cost-efficiently is to “ensure that citizens have access to care that avoids more expensive treatments down the road,” he stated. With regard to the bill, he testified, “There are a number of technical issues that must be worked out – appropriating risk in the self-insured plans; benefit design and affordability; adverse selection mitigation mechanisms – to help ensure success. But, at a time when small groups are having incredible difficulty in bearing the dramatic increases in health care premiums, there is strong evidence that expanding the pool of beneficiaries has potential to achieve cost savings to all involved parties” he stated. In response to questions from committee members, the Comptroller also stated that the bill provides for committees to represent the interests of new employee groups entering the plan and that this may help impact benefit plan design and affordability. The bill does not impact small group rating laws, which enables the Comptroller to apply community rating. The current State plan is for comprehensive coverage and is affordable, with Individual plans starting at $5,400 per month and family plans beginning under $14,900. Because employees pay premium cost share amounts, the cost to the State is less than these totals. He also stated that the State plan will comply with all requirements of the federal law that begin in 2014.

Victoria Veltri, Acting Healthcare Advocate and General Counsel, Office of the Healthcare Advocate, testified in support of the bill.

Raja Staggers, Executive Director for the State's Commission on Health Equity, testified in support of the bill. She stated, “People from diverse racial-ethnic, cultural, and linguistic abilities have much to gain from health reform. Although minority groups represent one-third of the total U.S. population, they comprise more than 50 percent of the uninsured.” She also stated in her written testimony, “In general, those facing social disadvantages are more likely to become ill and die prematurely, or to seek much needed medical care too late when the cost of medical treatment becomes exorbitant.”


Christopher G. Donovan, Speaker of the House, testified to express his strong support for the bill, stating, “This commonsense measure [is] designed to streamline existing state and municipal government purchasing of healthcare and provide small businesses and nonprofits with more affordable options.” He stated that the bill will “provide relief from the unpredictable rate hikes these employers experience from year to year by giving them access to the stability of the large state pool. In the world of municipal and small group health insurance, it is not uncommon to see annual increases top twenty percent – making it nearly impossible to budget for healthcare costs. Meanwhile, the state employee plan has seen single-digit increases for the last several years.” He also stated, “By aggressively managing costs, the state's Healthcare Cost Containment Committee (a group made up of representatives of management and labor), has succeeded in bending the cost curve through measures that better manage care under a self-insured plan, saving the state tens of millions of dollars.” Speaker Donovan concluded his testimony by describing this bill as using the size of the state employee pool to leverage greater discounts for other healthcare purchasers. By building on the strength of healthcare pooling, the bill will “increase purchasing power, lower costs, and expand access… It will maximize the potential of federal reform, spend state healthcare dollars more efficiently, improve quality, and offer employees and families a new health insurance choice that reforms healthcare delivery and slows cost growth throughout the entire insurance market.”

Pedro E. Segarra, Mayor of the City of Hartford, testified in support, stating that healthcare insurance is one of the biggest cost drivers in municipal budgets. “In Hartford alone, the overall cost is approaching 20% of our annual budget, and we are well aware that this issue is one that every municipality is presently facing,” he stated. This bill will enable Hartford and other municipalities to take advantage of the greater bargaining power and lower administrative costs associated with the 200,000 member state employee pool. He also stated, “While I and other municipal leaders are mindful – and respectful – of the fact [that participation in this plan would necessitate] modifications to collective bargaining agreements, the City remains hopeful that it will be able to take advantage of this fiscal savings opportunity while guaranteeing that the level of service our valued municipal employees expect would not be diminished.”

Catherine Osten, First Selectman of the Town of Sprague, testified in support of the bill stating that in the small, rural town of Sprague (population: 3,000), “The cost of insurance for our employees is rising far more quickly than the cost of living. It is the single most volatile piece of our budget, making it very difficult to maintain a flat increase budget which maintains services and yet must include these unpredictable costs.” She stated that the bill would give municipalities a way to save money so they could avoid having to make cuts to employee benefits or eliminate or reduce town services. “Having access to the state employee plan would enable our small group of employees to take advantage of the administrative efficiencies and purchasing power of the much larger state employee plan,” she stated. She listed ways her town has tried to save money, including energy conservation efforts, and regionalizing services, stating, “All of our creative solutions, successful efforts to tighten our belts, scrimp and save, and do more with less in these very challenging times are threatened by one volatile item in our budget: healthcare. The owners of local 'mom and pop' businesses experience similar challenges when they try to purchase insurance coverage for themselves and their employees.” She concluded her testimony by stating that this bill, “will help towns like mine stabilize rising insurance costs, and will preserve jobs in a community that is already struggling with high unemployment and lack of adequate insurance.”

Tom Swan, Executive Director of the CT Citizen Action Group, former co-chair of the CT HealthFirst Authority and the Statewide Primary Care Access Authority (both created by the legislature), testified in strong support of the bill. He stated his appreciation of the state's elected leadership in their efforts to bring forward this and other bills to enable Connecticut to lead on the implementation of the federal Affordable Care Act. The bill, “represents common sense steps to improve our healthcare system, while making it more affordable” he stated. He also testified, “Small business and municipalities do not have the same leverage that large employers and the state have to negotiate with insurers and providers. It is clear that health insurers' goals over the last decade have been to get purchasers in the small employer market to pay more for less coverage.” This is why it is important to give small employers an additional option and let them take advantage of the state's purchasing power.

Thomas H. Morrow, Executive Director, Bristol Community Organization, Inc. (BCO) testified in favor of the bill, stating, “Essentially, non-profits are small businesses. BCO has a staff of 77 employees, of which 25 are full-time and 52 part-time. Over the years, as I have planned staffing, it was standard to figure a salary and then to add 21 percent of that figure as a benefits package. Because of the skyrocketing health care cost increases of the past 20 years, that benefits percentage is now 47 percent!” Therefore, if he hires a person for $50,000 who is under fifty years old and needs to insure a family of two, that person will cost BCO $83,500 to employ. As a result, he stated, “We are not able to hire a fulltime person because of increased costs in health insurance.” He concluded his testimony by stating this bill is vital to all nonprofits, and “it is the best way to improve the economy, encourage economic growth, and create jobs.”

The following also testified in favor of the bill and submitted written testimony:

Ron Cretaro, CT Association of Nonprofits

Donna Hamzy, CT Conference of Municipalities

Jennifer C. Jaff, Advocacy for Patients with Chronic Illness, Inc.

Ray Rossomando, CT Education Association

Jonathan Bilmes, Bristol Resource Recovery Facility Operating Committee

Stan Soby, Oak Hill

Robert Fishman, Jewish Federation Association of CT

Michael A. Winkler, Administrative and Residual Employees Union

Lynn C. Warner, ARC of CT

Terry Edelstein, CT Community Providers Association

Also testifying in favor, but not submitting written testimony were:

Larry Deutsch, MD, member of the Hartford City Council

Sal Luciano, member of Council 4 AFSCME

Clarke King, member of Council 4 AFSCME

Paul Laralee, member of Council 4 AFSCME, Department of Children & Families employee

Stephen A. Karp, Executive Director of the CT Chapter of the National Association of Social Workers NASW-CT), submitted written testimony in support of the bill. He stated that as a small non-profit employer, his options for healthcare insurance coverage are extremely limited. “Currently the two pooling choices we have are the Chamber of Commerce and the CR Business and Industry Association (CBIA). Together these two organizations have a near monopoly on the options available for many small nonprofits. They both however require payment of membership dues in order to access their insurance plans which is troublesome to us, because both organizations spend significant resources lobbying the Legislature for the advancement of policy positions that are directly opposite the positions taken by CT-NASW. We do not object to these organizations lobbying on their issues, however we do object to having to pay dues to one of these organizations in order to be eligible for a pooled insurance plan” Besides the direct employees of CT-NASW, the bill will enable many of the group's members in private practice to also join the pool this bill creates. He stated, “We estimate that [the bill will provide] at least 600 of our members in solo or small group practices… with a choice for coverage that gives them premium rates based on a pooled plan.” He concluded his testimony by stating that the bill, “will also build in healthy competition in the small employer health insurance marketplace, which the Chamber of Commerce and CBIA should – as advocates of a free marketplace – support.”

Miguel A. Cardona, Principal, Hanover Elementary School, South Meridan, submitted written testimony in support, stating that in a time when every municipality in the state is facing rising costs and limited revenue the bill would give them additional options for quality, affordable health insurance coverage at lower costs. He also stated, “From my perspective as an n educator, I see first hand the effects of being underinsured or uninsured. Students without access to healthcare often come to school ill-prepared to learn and also miss many school days due to lack of preventative and routine medical care. In many cases, these students eventually fall behind academically and require expensive remediation in later years.” He stated that support for the bill, “would also support our State's need to address achievement gaps for our students.” He concluded his testimony by stating that currently the ones most affected by the problems the bill addresses are hard-working middleclass citizens, and the bill offers “solutions to help our non-profit organizations and small businesses which serve as the backbone of our community.”

The following also submitted written testimony in support of the bill:


Bart Russell, CT Council of Small Towns

David Fried

Domenique Thornton, Mental Health Association of CT, Inc.

Jon Davis

Karen Bullock, National Association of Social Workers

Lori Pelletier, CT AFL-CIO

Maggie Adair, CT Association for Human Services

Paul Filson, Service Employees International Union

Sharon Palmer, AFT CT

The American Cancer Society

David Radcliffe, Meriden Children First

John Murphy, CT Citizen Action Group

Jonathan B. Knapp

Mary Moninger-Elia, Alliance for Retired Americans


Robin Wilson, President and CEO of Quinnipiac Chamber of Commerce submitted written testimony opposing the bill, stating “Although we applaud lawmaker's efforts to address the cost and availability of health insurance, we are concerned that offering small businesses the state health insurance plan will do very little to provide small businesses with affordable health care options for themselves and their employees. Although some savings may be achieved through a larger purchasing pool, because the state plan is very expensive – an estimated $22,000 per year for a family of four – cost savings for small employers is unlikely.” She also stated, “Group health insurance has become a financial black hole for employers, who are facing double digit increases in costs each year.” The Quinnipiac Chamber therefore urges rejection of the bill and suggests that the legislature, “instead look for ways to address the burdensome cost of healthcare and insurance, such as allowing small employers to purchase health insurance with fewer mandated benefits.” She concluded by stating, “Wellness programs are a proactive solution to help employers hold down healthcare costs by encouraging positive, healthy behaviors,” which the Quinnipiac Chamber also supports.

Eric George, Associate Counsel for the CT Business and Industry Association, submitted written testimony in opposition to the bill, stating that for the business community, the rising cost of health insurance causes some companies to no longer be able to provide coverage for their employees. He stated, “At a time of significant job-loss and economic uncertainty, any legislation that threatens to make this crisis worse must be rejected... For the pooling plan to succeed it must do so at the expense of private industry since it envisions itself as a direct competitor to private industry.” He also stated, “Connecticut is in the unfortunate position of having the highest per capita debt in the country. Our total unfunded liabilities are $70 billion, and nearly $43 billion of these unfunded liabilities are attributable to state employee health care and pension costs.” The prospect of adding the cost of this bill to that amount is very concerning, he stated.

On the subject of self-insuring, Mr. George stated that the bill would, “utilize the existing and expensive state employee health insurance plan as the platform for its new state-run health care program. The state employee health plan was converted from a fully-insured system to a self-insured system a few years ago. It is true that under a self-insured system like this, the State would no longer be required to pay health insurance premiums to carriers. However, the trade-off is that the state would have to pay the medical claims for everyone in the new plan. This is a very risky idea, since no one knows who will opt into this new plan – and if the individuals entering the plan have high risks and high claims, then the cost to the State could be very expensive. Having this new plan be self-insured is also risky because federal health reform law (which requires every state to set-up new health insurance marketplaces, known as “exchanges”) says that only fully-licensed insurance products may be sold inside the exchange. A self-insured plan is not a fully-licensed product and would run afoul of federal reform.”

Susan Halpin, CT Association of Health Plans, submitted written testimony to urge rejection of the bill because it goes much further than offering an additional option to cities and towns the opportunity to participate in the state employee pool, and carries significant financial risk to the state, exacerbation of cost-shift, and crowding out of the private insurance market. She stated that the bill “would create a de facto public option by opening up the state plan to non-profit organizations and small employers (the definition of “small” in the bill is 100 employees or fewer).” Lastly, she stated, “without significant reworking, we oppose the bill as it is currently drafted.”

Reported by: Sheila McCreven

Date: March 7, 2011