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The state of Connecticut will begin assessing a 0.5% employee payroll tax Jan. 1, as part of an effort to stand up an ambitious paid family medical leave program that will offer workers as much as three months of paid time off per year to treat an illness or care for a sick family member.
While officials from the quasi-public Paid Family and Medical Leave Insurance Authority work to ensure the long-term solvency of the program, employers remain wary they’ll need to foot the bill if the payroll tax doesn’t cover the cost of benefits, which kick in Jan. 1, 2022. (The governor's office points out that the authority has the power to reduce benefits if the costs exceed the funds raised via the payroll tax.)
Meantime, Connecticut’s leading progressive Democrats recently announced they will push hard again in 2021 for a public health insurance option, which could give small employers, nonprofits and labor unions access to the expensive state insurance plan.
Taxpayers, of course, will be the backstop if such a plan is launched and can’t cover the cost of benefits.
Both efforts are laudable in their attempts to help average workers, but they also pose significant risk to taxpayers at a time when Connecticut faces continued budget uncertainty.
While Gov. Ned Lamont hopes a Biden administration will help float Connecticut’s coffers with new stimulus funds, there is no guarantee the president-elect will be able to come to terms with a GOP-led Senate on a plan that bails out states from COVID-19-related budget issues.
However, even without the pandemic, Connecticut’s budget was in a precarious position, facing the likelihood of short- and long-term deficits. Yes, the state has built up a $3-billion-plus rainy day fund, but the goal should be to preserve as much of it as possible.
Plus, we don’t know how long it will take the economy to recover from the pandemic. Employers are also facing higher unemployment insurance costs in the years ahead, as Connecticut is now borrowing federal dollars to pay out jobless claims.
These are all reasons why Connecticut shouldn’t move forward with a public insurance option, the cost of which is unknown. We simply can’t afford it. Not to mention it will also risk thousands of well-paying insurance jobs in Greater Hartford.
Last year Cigna Corp. CEO David Cordani reportedly threatened to uproot his Bloomfield-based health insurer if Connecticut pushed ahead with the adoption of a public insurance plan that competed with the private sector.
The plan died shortly after that.
To be fair, we can’t allow corporations to call the shots on important public policy matters, but Connecticut also can’t afford to turn its back on one of its key industries. Job growth is a hard enough challenge for the state.
Comptroller Kevin Lembo and other top-ranking Democrats who are pushing the public insurance option are all well-meaning public officials truly trying to bring more affordable health care to individuals and small businesses. The cost of health care remains a major problem for all Americans, particularly small employers.
And public-option advocates would be right to ask the question, “if not now, then when?”
The reality is health insurers and the state’s leading business associations will never support a public insurance plan. Health insurers will oppose it for obvious reasons, but other groups simply don’t trust the government to launch another potentially expensive program that could contribute to future deficits.
Given Connecticut’s fiscal track record can you blame them?
Well written. Factual; and also sets forth opinions in straightforward manner without being caustic.
"Connecticut shouldn’t move forward with a public insurance option, the cost of which is unknown. We simply can’t afford it." Dog eat your homework Greg? For all you know the plan could run a surplus. Small businesspeople around Connecticut work 18 hour days and sometimes have to miss a paycheck to meet payroll. The Legislature wants to give them a little negotiating leverage to lower their cost of healthcare for their employees during a pandemic. One other piece of homework that you avoided: when you quoted Cigna, did you check to see which of their competitors gets paid to administer state plans?
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The Hartford Business Journal 2025 Charity Event Guide is the annual resource publication highlighting the top charity events in 2025.
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