Access Health CT, the state’s health insurance exchange, handed out hundreds of thousands of dollars in severance payments to departing employees without board approval, awarded $45 million in no-bid contracts and did not appear to run criminal background checks on workers who handle client information, state auditors wrote in a report released Tuesday.
The auditors analyzed financial records, meeting minutes, policies, procedures and other documents for the 2013-14 and 2014-15 fiscal years. In some cases, they examined transactions running from those years to 2018.
Among the findings were revelations that Access Health had distributed $678,954 in severance payments to 16 “involuntarily terminated” employees between 2014 and 2018. Four of those workers walked away with lump sums totaling $207,363. The payments were not approved by the organization’s board of directors.
In addition, the employees continued to receive medical and dental insurance benefits for up to six months after their termination, the auditors noted.
“The exchange allowed the chief executive officer to make decisions regarding severance packages without the approval of the board of directors,” the auditors wrote. “The total amount of the severance payments and ancillary benefits may not have been a prudent use of the exchange’s resources. Since these payments were not included in the adopted budget, less funds may have been available for program operations.”
Per state law, the group’s board of directors must approve non-budgeted severance payments above $5,000.
The report also highlighted $45 million in no-bid contracts issued by the exchange. More than $8 million of that was given to a single, unidentified vendor. Auditors recommended that the organization seek bids for all professional services at least once every three years.
They also faulted the exchange for failing to maintain documentation that supported the completion of background checks for certain workers. Access Health pays hundreds of thousands of dollars to groups of employees that provide educational and enrollment assistance to the uninsured in Connecticut. Those workers have access to information that includes a client’s name, date of birth and social security number.
“If you remember, when the exchange first opened, these independent contractors were signing people up for insurance and they would have access to social security numbers and confidential information,” state auditor Robert Kane said. “Our feeling is that like employees, they should have background checks considering the access they have to information.”
Access Health officials argued that they had performed the required background checks, and said they have since handed over documentation to prove those reviews were conducted.
In an emailed statement Tuesday, Access Health CEO James Michel said the agency has tackled the problems outlined in the auditors’ report. The issues precede Michel’s arrival as head of the group. He took over the role in September.
“The findings recorded have been addressed, including several improvements in policy and procedure to ensure compliance,” he said. “As of 2018, Access Health CT is under new executive leadership helping to further guide the organization in accordance with the highest standards.”
Sen. Matthew Lesser, D-Middletown, a co-chairman of the legislature’s Insurance and Real Estate Committee, said the report warrants “a significant review” by the General Assembly.
“I think we’re going to dig in carefully and ask some questions of the new leadership,” he said. “We want to get a sense of what happened, why it happened and how serious this is.”