Gov. Ned Lamont wants $1 mn to study a government-backed, privately run health plan he calls the Connecticut Option. He folded the proposal into his revised $27.8 bn budget plan presented Feb. 4 at the opening of the 2026 legislative session.
Lawmakers will adjust the second year of the two-year, $55.8 bn budget enacted in 2025.
The Office of Policy and Management would assess feasibility, design structure, and pathways to capture federal funding to trim premiums and overall health spending.
According to Beinsure analysts, federal pass-through dollars and subsidy stacking drive whether public options move the needle or stall.
Lamont frames the concept as targeted relief for small employers squeezed in commercial markets.
He outlined the pitch during the Waterbury Regional Chamber’s annual legislative breakfast. Carmen Romeo, president and CEO of Fascia’s Chocolates in Waterbury, pressed the governor on rising premiums and hiring strain.
Romeo runs a chocolate factory with a workforce now in the single digits. He said the firm once offered coverage, then pulled it when costs climbed beyond reach.
Data from KFF show 37% of Connecticut businesses with fewer than 50 employees offered coverage in 2024. More than 96% of firms with 50 or more workers did. The gap shapes labor competition.
Romeo said he struggles to recruit full-time staff without health benefits, and growth stalls.
Lamont said he recognizes the bind. He recalled running a small cable television company competing against Verizon, which carried stronger benefits and market power. He argued small employers lack negotiating clout and pay the price.
As an interim step, Lamont proposed a tax credit tied to Individual Coverage Health Reimbursement Arrangements offered through Access Health CT.
Employers with fewer than 50 workers would qualify for up to $1,000 per employee per income year. The program caps credits at $5 mn per tax year and operates on a first-come, first-served basis.
ICHRA structures allow employers to contribute defined amounts employees use to purchase individual plans on the exchange.
The administration contends the credit narrows the benefit gap between small and large firms. We think uptake will hinge on simplicity and timing, not rhetoric.
Lamont describes the tax credit as a bridge. He told Romeo the Connecticut Option would serve employers like Fascia’s once developed.
Democrats have floated public option bills for small businesses and nonprofits in recent sessions, proposals Lamont opposed.
Last year, lawmakers introduced a $500,000 bill to create a commission studying a universal health program. The governor charts a narrower route.
