Organized labor raps Gov. Ned Lamont over contract to insurer to administer family and medical leave program

Organized labor and its allies in the General Assembly on Wednesday criticized Gov. Ned Lamont for bypassing state workers and instead outsourcing a third contract, this one to handle the paid family and medical leave program prized by liberals who fought to enact it into law.

The Lamont administration announced July 29 it selected Aflac Inc., a Columbus, Georgia-based insurance company, as the private claims administrator for the Connecticut Paid Leave Authority. Aflac will accept applications, determine eligibility and handle benefits for the program that will begin disbursing money Jan. 1, 2022.

Xavier Gordon, a state Department of Labor employee and president of the American Federation of State, County and Municipal Employees Union Local 269, said in an online news conference that state workers have not been displaced as a result of the contract with Aflac and two others recently awarded to administer pandemic-related unemployment insurance.

Critics also expect the contract with Aflac to be in place for three years.

Still, Gordon called the Aflac contract “reckless outsourcing” and said state employees are “subject matter experts dedicated to protecting the public interest, not boosting shareholder dividends.”

Max Reiss, a spokesman for Lamont, compared the Aflac contract with private vendors that do frequently do business with the state.

The General Assembly agreed with the governor’s approach “that a proven private-sector partner assist the state in administering this program to ensure Connecticut residents have a seamless experience and that is exactly what Aflac will provide,” he said.

“The governor also insisted on involvement with organized labor, ensuring they have a seat at the table on the Paid Family and Medical Leave board,” Reiss said.

The contract provides for an “implementation fee payment” of $1.5 million and Aflac will be paid a monthly services fee of about $1.9 million, he said. Evaluation and program services fees also may be charged, but only as needed and with advance review and approval by the Paid Leave Authority.

Sen. Julie Kushner, a Danbury Democrat and co-chair of the legislature’s labor and public employees committee, said including a private administrator in the legislation was the result of a compromise when paid family medical leave was enacted in 2019.

“I’m concerned about anyone making a profit off of the investment that workers are making in this program,” she said. “I want every penny of that that can be spent to go directly to people who are in need of this program.”

She said she’s confident the the Paid Leave Authority will monitor Aflac’s contract and that the law does not permit a third-party administrator to benefit from denying a claim.

Chief Executive Officer Andrea Barton Reeves said the Paid Family Leave Authority will make the final decision on claims that Aflac rejects.

“We’re not turning the entire thing over to Aflac,” she said.

In a statement, Aflac said it’s “pleased to have been awarded this business and looks forward to providing excellent service to the people of Connecticut.”

Organized labor has criticized Lamont for two other private-sector contracts negotiated by the administration. The governor invoked emergency powers to enter no-bid contracts with two private corporations to handle Pandemic Unemployment Assistance (PUA) applications and track benefits overpayments for the Department of Labor.

Stephen Singer can be reached at ssinger@courant.com.