🔒With election looming, Gov. Lamont targets health care, energy costs in 2026 session

Two of Connecticut’s biggest cost pressures on employers — health care and energy — will be at the center of Gov. Ned Lamont’s agenda heading into the 2026 legislative session, as the state also braces for potential federal funding cuts tied to the Trump administration. In an exclusive interview with Hartford Business Journal earlier this month, Lamont said lawmakers should prioritize measures aimed at reducing the cost of doing business and living in Connecticut, with a particular focus on health care and energy policy. Federal funding uncertainty, however, is likely to shape the session’s scope. While lawmakers set aside up to $500 million during a special session in November to help offset potential federal cuts, Lamont said new challenges keep emerging. Lamont also pointed to other longer-term challenges, including the state’s 70,000-plus workforce shortage and the need for transportation infrastructure improvements. Still, he emphasized that the short legislative session — which opens Feb. 4 and closes May 6 — limits how much can realistically be accomplished. The session also comes during an election year, as Lamont seeks a third term, a dynamic that could intensify debates over affordability and business costs. Among the initiatives Lamont said he’d support are association health plans, which would allow small companies and associations to form groups and leverage their purchasing power to obtain more affordable health insurance. He’s also open to other options aimed at lowering costs for individuals and small businesses, including Individual Coverage Health Reimbursement Arrangements, or ICHRAs. ICHRAs allow employers to provide pre-tax contributions employees can use to purchase health insurance on the individual market instead of enrolling in a traditional small-group plan. Access Health CT, the state’s health insurance exchange, launched a platform for ICHRAs last year as Connecticut’s small-group market continues to contract following the exit of several carriers. Lamont is also pushing for a “Connecticut option,” a still-developing plan aimed at giving residents and small businesses access to more affordable coverage. The Democratic governor said the model would keep private insurers responsible for taking on financial risk, distinguishing it from prior “public option” concepts that would have required the state to run an insurance plan. Lamont said health care costs are rising at a double-digit pace across the country, and Connecticut is no exception. Higher demand for procedures remains a factor even years after the pandemic, but he also pointed to pharmaceuticals — particularly specialty drugs — as a rapidly growing share of total spending. Separately, Lamont said he’s working with state Comptroller Sean Scanlon and Department of Social Services Commissioner Andrea Barton Reeves on ways to curb health care spending in the state employee health plan, including exploring incentives that would steer members toward a preferred provider network aimed at delivering better value.

Energy costs

Lamont said the legislature best serves the business community by providing certainty — something he argued is sorely lacking in Washington, D.C. “There’s something to be said for a little bit of consistency,” he said. “We’ve cut taxes, not dramatically, but we’ve balanced the budget and business knows, year to year, pretty much what they can expect.” The leader of the state’s largest business organization said there’s still work to do. Chris DiPentima, president and CEO of the Connecticut Business & Industry Association, said the legislature made some progress last year on regulatory policy that improved predictability for employers, but businesses are still looking for additional reforms. DiPentima said he’s not surprised Lamont has prioritized health insurance and energy costs, because state residents and business owners are intently focused on affordability. He noted that Lamont and the legislature “chipped away” at child care costs last year by funding a $300 million endowment program to expand access to no-cost preschool spaces, and used the special session to approve a bill intended to promote affordable housing statewide. “The next two biggest things on the burner, if you will, are the cost of health care … and energy costs,” DiPentima said.

On energy, Lamont said Connecticut needs a long-term strategy focused on both supply and demand. He described himself as an “all-of-the-above” supporter of expanding power supply — including nuclear and natural gas — while also seeking to reduce demand through expanded energy efficiency. Lamont criticized the Trump administration’s attempts to halt the Revolution Wind offshore wind project, arguing the move undercuts Connecticut’s efforts to bring new power supply online. Lamont raised skepticism about calls from Republicans and others to eliminate the public benefits charge, a fee on electric bills that helps fund energy-efficiency programs, renewable energy initiatives and assistance for low-income customers. He argued removing it would likely just shift costs from ratepayers to taxpayers through the state budget. Lawmakers tried to address energy costs during last year’s session by approving a bipartisan agreement to bond $155 million to offset electric bills. The money was intended to pay down a portion of the public benefits charge, with estimated per-customer savings of $5 to $10 per month. DiPentima said that was an encouraging start. “It was good to see a bipartisan working group compromise on that, quite honestly,” he said, adding that the collaboration needs to continue. DiPentima said he wants legislators to eliminate the 6.5% sales-and-use tax on energy bills for non-manufacturing industrial and commercial customers — the only entities that still pay it — which he said would bring Connecticut in line with neighboring states. “It’s not a huge number, but … if you’re a small or large business, that would have an immediate impact,” he said. Lamont sat down with Hartford Business Journal in his Capitol office to discuss a range of issues. Below are additional excerpts from the interview. Answers were edited for length and clarity. Q. What are your impressions of the state economy? A. I think we’re in a pretty good place. I think our economic growth the last year or so has been way above average. (Connecticut’s GDP grew 4.6% in the second quarter of 2025 vs. the U.S.’ 3.8% growth.) Our unemployment rate (4%) is below the national average. So those are two pluses. Our (two-year, $55.8 billion) state budget is still in the black, not by a lot, but we’re still in the black, which is better than most other states. I think that our anchor tenants are pretty strong, starting with advanced manufacturing, especially in the defense sector, and I think we can count on that for a while. I think life sciences is booming in the Greater New Haven area. … I think construction is going to stay strong for a while. That’s roads, bridges, rail, even housing. Q. What are your other main priorities this session? A. I care very much about an honestly balanced budget and to make sure we don’t play any games there. I think we’re still in pretty good shape. I want to make sure we honor our commitment to the early childhood endowment. We got some pretty strong capital gains, so I think we’ll be in a good position to be able to do that. Q. What should businesses expect from the upcoming session? A. Do I see any big tax-related changes regarding business? I don’t think so. The (federal) Big Beautiful Bill has got some advantages in terms of big job training and scholarship forgiveness grants, which leverages what we’re doing already. Q. Are you happy with the incentives Connecticut has for business development? A. I thought we over-relied on incentives 10 years ago. It almost became a bidding war between us and New York in how much we’d pay. But we do have a formula. If you add this number of jobs, we’ll give you this much money (through the state’s JobsCT tax rebate program). I think timing is really important. We’re speeding up the incentive approval process, rather than adding on a lot of new incentives. Q. Beyond the budget, what are your longer-term priorities? A. I think you’re going to see the state transformed in terms of housing, mainly in our 25 largest cities, and transportation. So an old state that hadn’t had a lot of capital investment, it’s going to have a lot over the next five years. In the next 10 years, I don’t think you’ll recognize the state. … If I can speed up transportation, speed up rail, I think that will be enormous, not to mention make it safer. But more to the point, even bigger than that, we have the wind at our backs on housing. People want to be here. Great demand is driving up the cost of housing. We need more supply, for not just affordable and supportive housing, but workforce housing and young people.