With new acccounting angle, Belknap Commission back to using part of health insurance refund as a credit

LACONIA — The Belknap County Commission this week reversed its earlier decision and will apply a portion of the credit it received from HealthTrust, the municipal and county insurance risk pool, against the cost of health insurance premiums for county employees.

County Administrator Debra Shackett said yesterday that using the credit will enable the county to pay its share of health insurance premiums without exceeding the amount appropriated by the Belknap County Convention for 2014

In March, when the convention adopted the county budget, it froze the appropriation for health insurance at 2013 levels. Shortly afterwards the commission shuffled monies from other line items within departmental budgets to restore sufficient funding to meet the projected increase in the employer premiums, which collective bargaining agreements with employees oblige the county to pay. The convention challenged the commission's authority to transfer funds without its approval and was upheld by Belknap County Superior Court.

The commissioners considered applying the reimbursement for past overpayments from HealthTrust as a credit against its 2014 premiums, which would have enabled them to fund health insurance within the limit of what the convention appropriated without violating the contracts or laying off employees. However, when the the independent auditors declined to sanction the maneuver, the commissioners abandoned this approach and instead asked the executive committee of the convention to transfer funds to the health insurance accounts.

Circumstances changed this week. Shackett explained that Peter Bragdon, executive director of HealthTrust, informed her that the credit of $127,893 was to compensate the county, its employees and its retirees for excessive premium payments in both 2013 and 2014. Shackett sought advice from the auditor, who said that the credit related to premiums paid in 2013 must be booked as an unanticipated revenue in 2014 and could not be set against current expenditures. On the other hand, the credit related to premiums paid in 2014, whether taken as a credit or cash, must be recorded as a reduction of current expenditures.

Shackett calculated that $46,217 represented unanticipated revenue, $5,863 was owed to employees and $15,669 was owed to retirees, leaving the county with $60,143 to apply against expenditures for health insurance in 2014.

Meanwhile, Shackett explained that changes in the "census," or number and status of full-time employees entitled to benefits, during the course of the year has left some departments with surpluses and others with deficits in their health insurance accounts. She said that transferring funds from the accounts in surplus, together with the credit, will enable the county to honor its obligation to fund health insurance for its employees without either exceeding the amount appropriated by the convention or violating the order of the court.

The commission will present its plan, along with requests for transfers, to the executive committee when it meets on November 17.