Cigna says tax law allows it to raise worker pay, increase benefits
Washington – Bloomfield-based Cigna is the latest American company saying it is giving its workers a raise because of the recent GOP-led tax overhaul.
In a statement released Wednesday, the health insurer said “the net financial benefits of United States tax reform will allow the company to further accelerate investments in our employees, our capabilities and our customers, clients, partners, and communities.”
Cigna said it would establish a minimum wage of $16 an hour, “substantially exceeding the national minimum wage in the United States as well as the hourly rate paid at many global corporations.”
Higher-paid Cigna employees would get raises, too. The insurer said it would increase its payroll by more than $15 million, and spend another $30 million on its 401(k) program. The company said it will provide an additional 1 percent match to employee contributions to the retirement fund this year, a move that would benefit the retirement accounts of more than 30,000 employees.
“It is because of our employees that Cigna continues to deliver on our mission to improve the health, well-being and sense of security of those we serve,” said David Cordani, Cigna president and chief executive officer. “Reinvesting a portion of savings from tax reform in our employees is a reinvestment in our mission.”
Congressional Republicans hailed Cigna’s move, saying the insurer follows nearly 300 other companies – including The Hartford – that have announced pay raises, bonuses, additional benefits, and increased hiring as a result of the new tax law.
President Donald Trump was enthusiastically applauded by congressional Republicans when the president said Congress and his administration had “enacted the biggest tax cuts and reform in American history.”
But congressional Democrats say the tax overhaul mainly benefits the rich and large corporations and that anecdotes of bonus payments, or even minimum-wage increases, are the least useful way to determine if the tax law is helping workers. They say only a tiny fraction of the nation’s big companies and corporation are passing any tax savings on to their workers.
Democrats on the House Ways and Means Committee, which include Rep. John Larson, D-1st District, have pointed out that some companies, including Kimberly-Clark, have said they will use savings from the new tax rates to pay for restructuring – and laying off workers.
So-called blue states, including Connecticut, say the tax law’s capping of certain deductions, such as those taken for state and property taxes that are paid, will hurt many residents. Connecticut announced last week it is joining New York and New Jersey in a lawsuit against the federal government that challenges the constitutionality of limiting state and property tax deductions to a total of $10,000.
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