Lamont Pushes Health Insurance Tax Credits for CT Small Businesses

Gov. Ned Lamont made his pitch for small business health coverage Wednesday afternoon from the factory floor at Fascia’s Chocolates in Waterbury, where workers produce 100,000 pounds of chocolate a year. The setting was deliberate. Fascia’s is exactly the kind of small employer Lamont says his proposal is designed to help.

The governor used the visit to promote a tax credit program built around what are known as Individual Coverage Health Reimbursement Arrangements, or ICHRAs. Under the proposal, businesses with fewer than 50 employees that reimburse workers for purchasing their own individual health insurance plans would qualify for a state tax credit of up to $1,000 per employee per year. Simple enough on paper. In practice, it could mean real money for employers who’ve been quietly absorbing health cost pressure for years.

“We’re trying to make sure small businesses also can provide health insurance and little ways that we can make a difference,” Lamont said.

Why It Matters to CT’s Small Employer Base

Carmen Romeo, president of Fascia’s Chocolates, told the governor his company’s experience mirrors what a lot of small business owners across Connecticut have lived through. Fascia’s used to offer employees a small group plan. Premiums climbed. Workers couldn’t afford their share. Eventually the insurer dropped the company because too few employees remained enrolled. Now Romeo’s workers are on their own when it comes to finding coverage.

“We’re committed to our employees. Anything we can do to help them, we’re going to. And these ICHRAs are a good way to help,” Romeo said.

It’s a familiar pattern. Small group insurance markets have always been less stable than large employer plans, and Connecticut’s small business health insurance market has reflected national trends: rising premiums, shrinking insurer participation, and employers caught in the middle.

Chris DiPentima, president and CEO of the Connecticut Business and Industry Association, said the credit would deliver the most relief to businesses with 10 or fewer employees. He estimated tens of thousands of Connecticut companies could take advantage of the benefit. That’s not a small constituency.

The program would cost the state up to $5 million annually starting in fiscal year 2027, plus a one-time $30,000 administrative setup cost. Compared to the scope of the problem, that’s a modest ask.

Where the Bill Stands

The bill cleared the Human Services Committee in March. Committee co-Chair Matt Lesser, a Democrat from Middletown, called the tax credits “a smart idea” that could save small businesses money “right away.” Lesser isn’t usually quick to praise Lamont on health policy. He’s been one of the sharper critics of what he sees as underfunding in that space. His endorsement here signals real bipartisan traction.

The bill now moves to the Finance Committee before heading to the House floor. Lamont said he’s heard broad support from legislators, and given Lesser’s buy-in, that seems credible.

Not everything went smoothly this week for the small business health agenda. A separate bill, HB 5378, which would have allowed the creation of multiple employer welfare arrangements (MEWAs), a mechanism that lets businesses band together to purchase coverage collectively, failed to advance out of the Appropriations Committee. That’s a setback for a different approach to the same underlying problem.

What This Means for Gold Coast and Corridor Employers

Connecticut has a dense concentration of small employers, particularly in services, specialty manufacturing, and professional trades. Many of them sit in towns like Fairfield, Glastonbury, or Simsbury, employing fewer than 20 people and competing for talent against larger firms that offer full benefits packages. The ICHRA credit doesn’t solve the affordability problem wholesale, but it gives those employers a concrete tool to stay competitive on compensation.

For employees, it means their boss might finally be able to put something toward a plan they buy through Access Health CT, the state’s insurance marketplace. That matters especially for workers who earn too much to qualify for subsidies but not enough to absorb full premiums.

Reporting by CT Mirror first surfaced details of the Wednesday announcement.

The Finance Committee’s handling of the bill is the next thing to watch. If it clears that hurdle without significant amendment, Lamont will have a relatively clean path to a signing ceremony. Given the bipartisan support and the low price tag, there’s real reason to think it gets there.