Exchange managers get bonuses even as customers struggle to sign up

By Katie Kerwin McCrimmon

Colorado health exchange managers have given $226,720 in bonuses since 2012 and the budget calls for $105,870 more this year.

The bonuses — including a hefty one this year for the technology chief — have come as IT and sign-up glitches have dogged the exchange, forcing millions of dollars in cost-overruns and complicating sign-ups for thousands of people who were trying to buy private health insurance.

Top Connect for Health Colorado employees already receive salaries far higher than state employees. And, if the exchange were a state agency, employees would not be eligible for bonuses.

Sharon O'Hara at legislature

Exchange board chair Sharon O’Hara testified against a bill that would have required legislative approval for bonuses at Colorado’s health exchange. The exchange already has given out two bonuses this year and managers have set aside cash for more. Democrats killed the bonus bill, saying board members could supervise bonuses.

Democrats in Colorado’s House killed a bill last week that would have required legislative approval for any bonuses at Colorado’s exchange. Next week, a separate bill that would require a second, more expansive audit of the exchange comes up in the House. Those who opposed Senate Bill 15-052, the bonus measure, said lawmakers could not determine as well as the Connect board if employees deserved the bonuses. Some said they think Colorado’s exchange has worked remarkably well, even though sign-ups so far are below projections for 2015. (Click here to read Exchange sign-ups well short of 2015 projections.)

“If the private sector was performing this poorly, the managers wouldn’t be receiving bonuses. They’d be immediately fired,” said Rep. Jon Keyser, R-Morrison, who sponsored the bill in the House.

Keyser was stunned after the House hearing because some Democratic lawmakers characterized the exchange as highly successful.

That doesn’t square with Keyser’s experience. He said he’s had constituents calling him in tears, distraught after spending hours trying to sign-up for insurance through the exchange.

“One man had been chronicling every conversation — more than 40 hours in the last 3 1/2 months. That’s not phenomenal performance. That’s terrible performance,” Keyser said.

Even the chair of the exchange’s board said performance must improve and that phone center wait times were unacceptable.

“I think many people have a right to be upset and we’re trying to work through the problems,” said exchange board chair, Sharon O’Hara.

Nonetheless, O’Hara testified against the bonus bill, arguing that it was intrusive. She acknowledged that some board members had not wanted to give bonuses to the exchange’s former CEO, Patty Fontneau, who also enraged some lawmakers when she sought a raise in the middle of the exchange’s rocky debut in the fall of 2013.

Among those who already have received bonuses this year are the chief technology officer and an outreach manager, according to exchange spokesman Luke Clarke. He declined to name these employees or give their base salaries. He would only say that the two employees together received $18,000 in bonuses this year.

“It’s based on their performance,” Clarke said.

He declined to be more specific, saying he doesn’t supervise the employees.

Exchange lobbyist talks with bill sponsor.

Rep. John Keyser, R-Morrison, left, sponsored a bill that would have required legislative approval for exchange bonuses. State workers are not eligible for bonuses, but the exchange is a public entity outside state government. A lobbyist for the exchange, right, helped convince House Democrats that the exchange is functioning well.

Clarke also said financial managers have set aside a total of $123,870 in cash for bonuses this year for 11 eligible employees. Starting this year, Clarke said money for bonuses will not come from taxpayers, who have funded more than $183 million to launch Colorado’s exchange. Instead, the bonuses would be paid with other revenues, which include user fees, assessments on people who get health insurance outside the exchange and leftover cash from Colorado’s high-risk pool.

The bonuses in previous years included:

  • $106,791 in 2014 for 17 staffers
  • $76,700 in 2013 for seven staffers
  • $25,229 in 2012 for two staffers

Snapshot of sign-ups for health coverage around the country

Florida: 1.6 million
California: 1.4 million
Texas: 1.2 million
North Carolina: 559,500
Georgia: 536,929
Pennsylvania: 472,000
Virginia: 386,612
Illinois: 347,000
Michigan: 340,905
New Jersey: 252,792
Ohio: 234,507
Wisconsin: 205,839
Arizona: 204,187
Louisiana: 184,532
Alabama: 168,816
Utah: 140,221
Colorado: 139,652
Oklahoma: 124,838
Maryland: 119,096
Oregon: 110,228
Connecticut: 110,095
Mississippi: 103,601
Kansas: 96,226

The exchange’s chief technology officer is Proteus Duxbury and his base salary last year according to exchange managers then was $165,000. The former CEO, Patty Fontneau, received nearly $200,000 a year and was one of the most highly paid exchange executives in the country. Top officials at the exchange earn far more than the state’s top officials, including the governor, attorney general and secretary of state.

The governor’s spokeswoman, Kathy Green, said that “while the governor agrees that customer service through the exchange needs improvement, it’s important to also recognize that we have one of the most successful exchanges in the country in terms of enrollment numbers.”

In fact, Colorado netted about as many sign-ups as Utah, a state that has about 2.7 million residents, compared to Colorado’s $5 million. Minnesota is also similar in population to Colorado and netted fewer than half as many sign-ups as Colorado: 60,000. (Please see chart for more state-by-state sign-up numbers.)

Green said Colorado lawmakers deliberately set up the exchange to be “more free-market oriented.”

During her testimony at the legislature, O’Hara said the exchange had already told candidates for the CEO job that they would not be eligible for a bonus during their first year of service. The search for a new CEO is continuing.

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One thought on “Exchange managers get bonuses even as customers struggle to sign up

  1. Bonuses don’t seem appropriate when the performance of the exchange has been, to be polite, far less than exemplary – or even expected. Requiring legislative approval also seems unacceptable, since it’s likely to provide little more than yet another opportunity for political grandstanding, depending upon which party is in charge, or is most displeased with something in the way the exchange operates. A bonus, if one is to be awarded at all, should be limited to genuinely exemplary performance, and there’s little or no evidence that managers qualify on that basis. A case could probably be made that IT managers should be returning money rather than collecting more of it.

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