To The Daily Sun,
Truth continues to be in short supply on County Drive in Laconia. Untruths proliferate concerning checks the county received in early September from its health insurance provider, Health Trust. The first check was for $53,505.59, followed by a second check, a few days after the first, in the amount of $127,893.44. By then, the commissioners had been enjoined from moving money from one line item to another without approval by the Executive Committee of the Belknap County Convention. Without notifying either the court or the Executive Committee and without any discussion or a vote in a public meeting, the checks totaling $181,399.03 were returned to Health Trust for credit against future premiums.
Health Trust credited $159,269.53 against premium money on the October invoice to the county and issued a check dated Sept. 25 to the county in the amount of $22,129.50, representing the difference between the total of the two returned checks and the credit given the county on its premium bill.
The first time this money was mentioned in a county commissioners' meeting was on Oct. 15. Earlier that week, the commissioners had been criticized for taking unanticipated 2014 revenue and applying it without judicial consent or the approval of the Executive Committee to increase the budget line item for health insurance beyond the amount appropriated by the convention. In reporting on the meeting, the Oct. 16, The Laconia Daily Sun said that the commissioners had rejected the recommendation of the county administrator and had decided that they could not use the Health Trust money without either court approval or the agreement of the Executive Committee. The actual meeting minutes are more cryptic. Addressing the checks received from Health Trust, the minutes state: "The commissioners agreed that they would not be willing to knowingly account for this improperly, and asked Ms. Shackett to notify employees immediately that they would be responsible for any premium costs beyond what the delegation budgeted on health insurance line items."
Following the Oct. 15 meeting, the headline in The Laconia Daily Sun was, "County commission agrees to play by the rules." One would have thought this to be the case from what had been said at the meeting. But this has not happened.
What was missing in the Oct. 15 meeting was any mention of the fact that the premium credit had already been obtained from Health Trust. Given that fact, one would have expected that the commissioners would have asked the Executive Committee to approve, after the fact, what they had done or sought to have the credit reversed by Health Trust with the issuance of a new check for the amount previously credited. That, of course, might have given rise to a problem, if there were not sufficient funds left in the budget to cover what had been paid for by the credit against the October invoice.
Either course had an additional problem. The commissioners had to either insist that they had no knowledge that this was being done until after the fact, or by attempting to undo what had been done, they would be implicitly admitting that they had knowingly violated a court order and a state statute, when they authorized the action without either judicial approval or executive committee agreement.
The next misdeed in the saga of the returned Health Trust checks came with a statement made by the county administrator in an interview with Michael Kitch for The Laconia Daily Sun. Ms. Shackett seemed to implicitly concede that use of the first check to obtain current credit on health insurance premiums was not proper. Notwithstanding the admission, she did not offer any explanation as to what, if anything, will or can be done about it. Her key point in the interview was to explain that a significant part of the second check "was to compensate the county, its employees and its retirees for excessive premium payments in both 2013 and 2014." Her point is that to the extent the check amount represents a return of overcharges attributable to 2014 premium payments, it was money actually appropriated for health insurance premiums, so it could be used again in 2014 to pay health insurance premiums. That is a clever argument but one lacking any connection to reality.
Health Trust has made it clear that the second check was Belknap County's proportionate share of the $17.1 million that Health Trust received from a lawsuit. It is not an amount that Health Trust was ordered to pay for premium overcharges. Instead it is money received by Health Trust which it is required to pay out. The litigation that gave rise to the $17.1 million award to Health Trust is an action brought by Bureau of Securities Regulation against the Local Government Center. Between 2003 and 2010, Local Government Center operated three insurance-type subsidiaries, Health Trust, P-L Trust and Workers' Compensation Trust. These entities were considered "pooled risk management programs" under New Hampshire law. The theory behind their recognition was that by pooling their insurance coverage costs, New Hampshire counties, municipalities and other governmental entities could reduce the cost of their coverage. The statutes governing these programs require that each such entity "return all earnings and surplus in excess of any amounts required for administration, claims, reserves, and purchases of excess insurance to the participating political subdivisions."
The recent litigation against Local Government Center referenced above involved a number of issues. One was the formula to be used to determine "surplus". Another was a practice that Local Government Center engaged in from 2003 to 2010. Of its three insurance programs, two were profitable, one was not. Money was taken annually from Health Trust and P-L Trust to subsidize Workers' Compensation Trust. Rather than trying to unwind and trace the monies from the 2003 to 2010 period, the penalty imposed by the Bureau of Securities Regulation hearing officer was to order the transfer of $17.1 million to Health Trust, which would trigger a surplus, which would then be passed on to various counties and municipalities. In effect, current participants may be getting windfalls because of past wrongdoing toward others.
Still, the wrongfully obtained money is ultimately being taken away from Local Government Center and its entities. The second check received by Belknap County was its share of the surplus created this year by the $17.1 million penalty transfer.
No matter how mightily they strain and how tortured their reasoning, the fact is that the $159,269.53 in question is unanticipated 2014 income and can be spent by the commissioners only with judicial approval or the consent of the Executive Committee. Unless and until these misdeeds are corrected, we are left with budget lines that have been increased significantly above the appropriated amounts without authority and in violation of an order of the Superior Court.
I believe that the people of our county took a significant step in the direction of good and open government in the recent election, but based on what is happening with the Health Trust money and the stories that are being spun about it, we are only halfway there.