Upset about lofty pay for executives at Colorado’s troubled health insurance exchange, Republican lawmakers Wednesday advanced a measure to strip Connect for Health’s authority to issue bonuses.
The measure won approval by a 3-2 vote along partisan lines in the Senate Health and Human Services Committee, one of the early signs of how the chamber’s shift to GOP control is making a difference.
The legislation is a reaction to the exchange’s approval of a $14,291 bonus for former CEO Patty Fontneau in 2014, despite questions about its performance and financial solvency, and her $18,500 bonus in 2012.
The most recent bonus and a salary hike — to $195,314 — made Fontneau the third-highest-paid executive at independent state exchanges under the federal health care law at the time.
“The intent of this (bill) is not so much about the exchange, but the idea of a bonus,” said state Sen. Larry Crowder, an Alamosa Republican and the bill’s sponsor. “In my business career, you don’t give bonuses for lack of performance.”
Fontneau resigned to take a job with Cigna two months after her pay hike, as criticism mounted ahead of a scathing audit released in December that found nearly $489,000 in “unallowable or unreasonable” payments.
A separate bill to expand the state auditor’s ability to investigate exchange operations and spending won bipartisan approval at the same meeting, even though the committee killed a similar measure when Democrats controlled the chamber a year earlier.
The initial version of Crowder’s bill — Senate Bill 52 — went even farther to give the Legislative Health Benefit Exchange Implementation Review Committee the authority to approve salaries hikes and benefits for exchange employees.
The review committee currently sets the CEO’s compensation package, and the exchange’s board awards the bonuses based on meeting performance goals.
Crowder amended the measure in the meeting, acknowledging that it went too far to micromanage the finances of the quasi-independent exchange. But Democrats still voted against it, with Sen. Irene Aguilar, D-Denver, calling it “a little too intrusive.”
“I’d like us to be done with the exchange and let them continue on, separate from us,” she said.
Sen. Kevin Lundberg, a Berthoud Republican and the committee chairman, said the measure was needed to send a message.
“I believe we have an extraordinary process that I have not been satisfied with at all,” he said. “If anything, we are cracking a whip above their head and saying, ‘We expect better.’ “
