A working group on healthcare organized by House Speaker and Congressional candidate Chris Donovan recommended Monday the state create a government-run insurance company and allow small businesses to join the state employee health plan.

Donovan, D-Meriden, convened the Speaker’s Working Group on Small Business Health Care last year. He is running for Congress in the 5th District.

Seven state representatives and two state senators, all Democrats, served on the working group with 16 volunteers. The report made eight recommendations, many of them representing causes Donovan has supported in the past.

The first recommendation is to “permit small businesses, including businesses of one, to purchase employee health insurance through the state employee plan.”

“This would permit small employers to take advantage of the state’s large risk pool, along with its bargaining power, low administrative costs and cost containment strategies.”

Many state employees reacted negatively to a similar plan, part of a group of proposals commonly called SustiNet, last year during a vote on the concession agreement negotiated by Gov. Dannel Malloy.

Malloy’s administration negotiated with, among others, Daniel Livingston, chief negotiator for the State Employees Bargaining Agent Coalition, and Salvatore Luciano, executive director of AFSCME Council 4, both of whom have a close relationship with the SustiNet proposals.

This closeness prompted concern among some state employees who wondered whether their negotiators represented them or SustiNet at the table with Malloy.

Livingston, a lawyer with Livingston, Adler, Pulda, Meiklejohn & Kelly in Hartford, is chairman of the board of the Connecticut Health Advancement and Research Trust. CHART is the parent of the Universal Health Care Foundation of Connecticut, the primary lobbyist for SustiNet.

Luciano served on the state’s SustiNet board, set up by the legislature to study and promote the SustiNet proposal. Council 4 and two other groups where Luciano is a board member have received Universal Health Care Foundation grants in the past.

Last year, Livingston accused the Yankee Institute, publisher of this website, of illegally misusing state computers in a letter to Attorney General George Jepsen. Livingston wrote his complaint one week after Raising Hale published an article about his characterization of the concession deal as the best in the country.

Jepsen found no evidence of wrongdoing.

The working group also suggests the creation of a “publicly administered health insurance plan” and promotion of non-profit insurers.

“The inclusion of a public, non-profit option both inside and outside of the exchange, would force insurers to trim profits, advertising budgets and expensive claim denial systems and create more value for the premium dollar,” the report said.

The group also suggested “pure” community rating for small group insurance “so that a small business’s premiums can no longer be adjusted based on the age, gender or similar demographics of the group.”

According to the working group, Vermont and New York currently require community rating for small groups.

“In essence, this change would aggregate risk across the whole book of business so that costs would be spread equally across the covered lives, averaging higher cost groups and lower cost groups. This means that premiums will no longer rise just because employees grow older. This system removes a disincentive on small employers to hire older, more skilled workers.”

The working group also recommended:

  • Increased transparency in health care costs
  • Requiring companies to insure association groups
  • Mandated reporting of an insurance policy’s actuarial value
  • A merger of individual and small group markets
  • Offering a Basic Health Program “in order to lower costs for small businesses in the exchange.”

Rep. Robert Megna chaired the working group. He was joined by Reps. James Albis, Susan Johnson, David Kiner, Betsy Ritter, Robert Sanchez and Ezequiel Santiago. Sens. Joseph Crisco and Terry Gerratana also participated.

The volunteer members of the group are: Charles Beyer, Beyer Precision, LLC; Michael V. Brown, New Standard Institute; Richard Carbray, Apex Pharmacy; Brenda Cerezo, Cerezo New Image Salon; Jennifer Clark, Realtor, First Choice Realty; Attorney Chris Donohue, Riefberg, Smart, Donohue and NeJame, PC; Kevin Galvin, Connecticut Commercial Maintenance; Jerry Hardison, West End Eye Care; Carolyn Malon, Family Dental Care of Farmington; Séan Moore, Greater Meriden Chamber of Commerce; John Pakutka, Cresent Group Consulting; John Seiffer, Better CEO; Linda St. Peter, Realtor; Angel Reyes, Check Cashing and More; Lesley Waldron, IPS Limited & IPS Physician Services; and Cornell Wright, Parker Wright Group.