Proposal would help small businesses afford health insurance

WATERBURY -- Businessman Carmen Romeo on Wednesday asked Gov. Ned Lamont for help affording the private health insurance he said his family's small chocolate factory needs to attract workers.

Lamont told Romeo, the president and CEO of Fascia's Chocolates in Waterbury, about his proposal to explore designing a government-backed, privately run health plan that he said could reduce costs for small businesses.

The governor has asked the state legislature to appropriate $1 million to have the state Office of Policy and Management assess the feasibility of developing that so-called "Connecticut Option," and how it might be designed, including exploring opportunities to maximize federal funding to reduce premiums and overall health care costs for consumers.

Lamont also outlined for Romeo and other members of the Waterbury Regional Chamber attending the business group's annual legislative breakfast Wednesday another proposal for a tax credit for small businesses that would help employees pay for health plans obtained through Access Health CT, the state's health insurance exchange.

The two initiatives are part of the revised $27.8 billion budget plan that Lamont presented to legislators on Feb. 4, opening day of the 2026 legislative session. The governor and legislature will be making adjustments to the second year of the two-year, $55.8 billion state budget that was enacted in the 2025 session.

Fascia's is among the majority of small businesses in Connecticut that do not provide health care to their employees. In 2024, 37% of businesses with less than 50 employees offered health coverage, while more than 96% of businesses with 50 or more workers do, according to health care research nonprofit KFF.

Romeo told Lamont he considered it a milestone when Fascia's first offered its employees a health insurance plan, but the company dropped the fringe benefit because the business has too few employees to afford private health insurance due to rising premium costs. He said his workforce is now in the single digits.

"I need a way to help provide more for my employees and grow the business further because I can't attract better, full-time people unless I provide health care for them," Romeo said.

Lamont said he understood Fascia's dilemma because he confronted the same affordability challenge as the owner of a small cable television company.

"I've been there. I had a feisty, small independent telecommunications company and we competed with Verizon, and they had pretty nice health care benefits and market clout. I had to make sure our folks had something comparable or I wouldn't be able to keep the quality of the workforce," he said.

Lamont suggested Fascia's and other small businesses could benefit from the new tax credit he has proposed to the legislature to encourage employers to offer Individual Coverage Health Reimbursement Arrangements through Access Health CT. ICHRA plans allow employers to contribute funds that their employees can use to purchase individual health care plans.

Under the governor's proposal, businesses employing less than 50 people in Connecticut would be able to file for a tax credit of up to $1,000 per employee per income year. The Lamont administration contends this would allow small businesses to offer competitive benefits relative to larger employers. The ICHRA tax credit program reserves up to $5 million total per tax year on a first-come, first-served basis for qualified small businesses.

Lamont described the proposed tax credit program as a bridge to the publicly designed, privately administered Connecticut Option that he envisions.

"Give us time to get this Connecticut Option going because this is meant for people just like you," the governor told Romeo. "Small businesses have no market clout. We just get squashed by the insurance guys. The big guys can negotiate something one-off. So, ICRHA is the bridge where we get to a Connecticut Option."

Democrats in the legislature have proposed bills in recent years to create a public option insurance plan for small businesses and nonprofits, but Lamont has opposed those legislative efforts to establish a state-sponsored health insurance plan. Democrats introduced a bill last year to create a commission to study and report on a universal health care program at a cost of $500,000.