Hartford Business Journal

6 Hartford Business Journal • January 30, 2017 www.HartfordBusiness.com TOP STORY Judge blocks Aetna-Humana merger A federal judge last week rejected a proposed merger between Aetna and Humana, saying the deal would "be likely to substantially lessen competi- tion" in the Medicare Advantage market. Judge John Bates of the U.S. District Court in Washington, D.C., also said that Aetna withdrew from Affordable Care Act (ACA) exchanges in 17 coun- ties "to evade judicial scrutiny of the proposed merger." The day after the ruling the insurance companies' CEOs said they were still mulling whether to appeal the decision. The U.S. Justice Department last July sued to block the $37 billion merger, as well as another merger planned between Anthem and Cigna. "After putting forward a compelling case that addressed each of the Depart- ment of Justice concerns, we are disappointed with the court's decision and will carefully consider all available options," Aetna Chairman and CEO Mark T. Bertolini and Humana CEO Bruce Broussard said in a joint statement. "We con- tinue to believe a combined company will create access to higher-quality and more affordable care, and deliver a better overall experience for those we serve." In its opposition to the Aetna-Humana tie-up, the Justice Department ar- gued the merger would hurt competition in the Medicare Advantage market in 364 counties and also hurt competition in several ACA state marketplaces where individual health insurance policies are sold. Attorneys for Aetna and Humana argued the tie-up would bring about efficiencies that would result in lower premiums and that a deal with Mo- lina Healthcare would divest Aetna of customers where the merger might threaten competition. ANA RADELAT | Connecticut Mirror HEALTH CARE Lembo prescribes remedies to combat pharma costs Comptroller Kevin Lembo last week pitched legislation he says will contain escalating pharmaceutical drug costs. The rising cost of drugs is creating larger financial burdens for Connecticut residents, Lembo said. His five-part plan would: Require justifications for sharp price increases; establish oversight of drug costs that exceed certain thresh- olds; ensure consumers benefit from rebate savings; promote insurance plans that emphasize affordable co-pays and preventive care; and eliminate incen- tives that encourage prescribing the most expensive drugs. GOVERNMENT Cities, towns want sweeping changes to buttress municipal finances The Connecticut Conference of Municipalities (CCM) last week released an extensive plan it hopes legislators will adopt this session to help municipalities, and large cities in particular. CCM's 90-page report calls for a local sales tax, fuller funding of the state's payment-in-lieu-of-taxes (PILOT) program and policy changes related to shared services and cost containment. Hartford Mayor Luke Bronin, who worked with CCM on the report, has called for higher PILOT payments for his financially struggling city, which has a high number of untaxed properties. Susan Bransfield, first selectwoman of Portland and CCM president, said the report "puts forward new recommendations that haven't been made before" — ideas that she says have generated bipartisan support. The most sweeping change would expand the sales tax base by repealing 10 percent of the exemptions for certain consumption categories, reduce the state sales tax rate by 0.75 percent to 5.60 percent, and levy a statewide local sales tax at the rate of 1 percent. " CCM also wants to prevent currently taxed property from being added to any of the existing tax exemption categories and require tax-exempt organizations to enter into PILOT agreements in situations where they derive rental or other significant income from a property. TRANSPORTATION Spirit Airlines introducing Bradley flights this spring Low-cost carrier Spirit Airlines will launch direct, nonstop flights beginning in April out of Bradley International Airport to Florida and South Carolina, state and company officials announced last week. The airline will serve several destinations, including Myrtle Beach, Orlando, and Ft. Lauderdale, the Connecticut Airport Authority (CAA) and Gov. Dannel P. Malloy announced. Bradley does not have "ultra-low-cost" airlines like Spirit, which officials say is increasing in popularity among economy travelers and college students. Starting April 27, the airline will provide a daily, year-round route to Orlando and four-days-per-week, seasonal service to Myrtle Beach. The airline will also provide daily, year-round service to Ft. Lauderdale beginning June 15. Bradley currently does not offer any flights to Myrtle Beach. ECONOMY & LABOR Survey: Trump presidency bodes well for CT business climate Over the next four years, more Connecticut residents say they foresee the new administration of President Donald J. Trump having a positive impact on the business community. That survey comes from InformCT, a nonpartisan, public-private partnership. Forty-six percent of the 505 Connecticut citizens polled expect a positive economic impact during Trump's term, as opposed to 37 percent who expect a negative impact. Similarly, the percentage who expect a positive impact on efforts to encourage companies to remain in Connecticut grows from 38 percent in the next 12 months to 43 percent when respondents are asked to project the impact over four years. However, eight of 10 survey participants believe state government, not fed- eral government, is most responsible for improving the state's job situation. Administered by researchers from the Connecticut Economic Resource Cen- ter Inc. (CERC) and Smith & Co., the analysis is based on the responses of residents across Connecticut. Anti-casino coalition worried about societal effects of 3rd gaming site Eleven groups, most of which are religious organizations, are opposing a proposal for a third casino in the state, citing the potential for adverse social impacts as well as what they say are inflated economic benefits. The alliance, the Coalition Against Casino Expansion in Connecticut, which in- cludes a range of viewpoints from both political parties, issued a white paper in which it says the region is in a "casino glut," and called for the state to conduct an impartial study of casino expansion. It also urged a statewide referendum, as well as a local referendum in the town ultimately chosen. Coalition members say that casino revenue in the re- gion has dropped, leading to the closing of 12 casinos in New Jersey. They be- lieve another casino will not bring money into the state, but rather take jobs and revenue from the state's existing casinos. ERIC BEDNER | JOURNAL INQUIRER BANKING & FINANCE CT's United Bank sets record 4Q profits Glastonbury community lender United Financial Bancorp Inc. posted record earnings in the fourth quarter, with profits jumping 47.4 percent. For three months ended Dec. 31, the parent of United Bank said last week it netted earnings of $14.6 million, or a record 29 cents a diluted share, vs. $9.9 million, or 20 cents a diluted share, netted the last quarter of 2015. CEO William (Bill) H. W. Crawford IV said his United team "delivered record revenue, record earnings per share, and strong loan growth all supported by an attractive cost structure and excellent asset quality.'' ECONOMIC DEVELOPMENT & CONSTRUCTION LAZ: $291M spent on parking assets Hartford parking vendor LAZ Parking says it's invested about $291 million to expand its parking-facilities portfolio to benefit its investment partners. LAZ's LAZ Parking Realty Investors LLC affiliate said last week its latest ac- quisition was the October purchase of a nine-level, 1,037-space garage, with 50,000 square feet of retail space, in Boston. Other locations acquired in the past 13 months include: 425 stalls in San Fran- cisco in Aug. 2016; 1,154-stall garage in Chicago in June 2016; 320-stall garage in Cincinnati in March 2016; and 526-stall garage in Seattle in Dec. 2015 In early January, LAZ Parking merged with Denver vendor Alpha Park, adding 49 parking garages and surface lots, and more than 125 employees to LAZ's roster. BY THE NUMBERS 2,958 The number of single-family homes sold in Connecticut in December, up from 2,888 in the year-ago period, according to Connecticut Realtors. $1B The "breakup fee" Aetna will need to pay Humana if their planned $37 billion merger fails to gain legal approval. 40.5M The total 2016 ridership on Metro- North Railroad's New Haven commuter rail line, which was up by 20,000 rides from a year earlier. 47.4% The fourth quarter profit increase recorded by Glastonbury's United Financial Bancorp Inc., which reported record earnings of $14.6 million. TOP 5 MOST READ on HartfordBusiness.com ■ Survey: Trump presidency bodes well for CT business climate ■ CT lawmakers advocating for $15 minimum wage ■ Malloy to set aside $5M to help address crumbling foundations ■ UConn seeks downtown Hartford bookstore ■ LAZ: $291M spent on parking assets STAY CONNECTED For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly, CT Health Care Weekly www.HartfordBusiness.com/subscribe WEEK IN REVIEW Aetna's Hartford headquarters on Farmington Avenue. P H O T O | C O N T R I B U T E D

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