By Katie Kerwin McCrimmon

The board of Connect for Health Colorado today gave CEO Patty Fontneau a $14,000 bonus for last year along with a 2.5 percent “cost-of-living” raise for this year.

That means she will earn about $195,300 a year, making Fontneau the third most highly paid manager of a state health exchange in the country, behind California and Connecticut.

Connect for Health CEO Patty Fontneau today received a $14,000 bonus for last year and a $4,800 hike in her annual pay.

The exchange board voted on the increase at a meeting this morning. All board members but Ellen Daehnick supported the bonus and pay increase. Steve ErkenBrack had not yet arrived and did not vote on the increase.

Board chair Gretchen Hammer congratulated Fontneau for her performance in setting up Colorado’s new health exchange.

“The challenge felt daunting and was daunting and Patty was very successful at leading the charge,” Hammer said.

The increase comes at a time when Colorado exchange managers are working to figure out how they can become financially self-sustaining. Connect for Health charges customers a 1.4 percent user fee. And managers want to charge everyone with health insurance in the state — even those who don’t get it through the exchange — $13 million in fees in both 2015 and 2016 to help pay Connect for Health’s bills. (Click here to read Fee to fund exchange would hit all Coloradans with health insurance.)

Fontneau insisted today that Connect for Health is on firm ground.

“Connect for Health Colorado is truly one of the most financially secure marketplaces in the nation,” Fontneau said.

But, Connect for Health is transitioning from spending $177 million in federal funds to having to bring in all the dollars it will spend. (Click here to read more: Exchange to spend millions on high-paid employees.)

With respect to executive pay for exchange managers, California has the highest salary for its CEO. The exchange director there earns $250,000 a year. California has a population of 38 million people, more than seven times as large as Colorado and the exchange there enrolled more than 10 times as many people in private health plans as Colorado did: 1.4 million compared to about 127,000.

Connecticut has a smaller population with about 3.5 million people and signed up about 79,000 people for private health plans. But the Connecticut exchange CEO is now selling the state’s software as “exchange in a box” IT to states like Maryland where exchange software flopped.

Fontneau now earns about $35,000 more than the head of the New York health exchange where manager Donna Frescatore gets paid $160,000 per year and the exchange serves 20 million people across the state and signed up about 370,000 people in private health insurance.

Colorado exchange and Medicaid managers this year are trying to update Colorado’s system and copy the simple website design in Kentucky. The executive director who has received all the kudos there, Carrie Banahan, earns the lowest salary of any head of a state based exchange in the country: $110,000 a year. Kynect has signed up 83,000 people for private health plans out of a population of 4.4 million.

Fontneau sought a raise last fall amid a lackluster start for the exchange. That stirred the ire of U.S. Rep. Cory Gardner, R-Yuma, who tried to block salary hikes in Congress for all heads of state-based health exchanges. Fontneau ultimately withdrew her request for a pay hike last fall.

Colorado lawmakers also wanted to audit Colorado’s health exchange. A bill that would have authorized a comprehensive audit of Connect for Health passed the state House with near unanimous support, but Senate Democrats blocked a full audit.

Fontneau is not the only highly paid employee at Colorado’s health exchange. During the next fiscal year, which starts in July, she wants to spend about $7 million on salaries for 49 employees and their travel expenses, meetings and office space. Four of Fontneau’s lieutenants have “chief” titles and she wants to add two more top jobs next year including an in-house lawyer and a director of product implementation.

The “chief” level employees include:

• Fontneau, CEO and executive director. Current salary: $190,549.92. She received a $5,000 raise and a year-end bonus in 2012.
• Chief Technology Officer Proteus Duxbury. Annual salary: $165,000.
• Chief Financial Officer Cammie Blais. Annual salary: $164,800.
• Chief Operating Officer Lindy Hinman. Annual salary: $164,800.
• Chief Marketing Officer Myung Oak Kim. Annual salary: $107,850.