The nonprofit New Hampshire Interlocal Trust, used locally in Wilton, was dissolved about a month ago and a receiver was appointed by the Secretary of State’s office, which under state law oversees what are known as pooled risk-management programs. Four such programs operate in New Hampshire; they are not insurance companies but help local governments pool together to buy health or property insurance.
The problem with the Interlocal Trust, as well as concerns about a second program called HealthTrust, has raised questions about the four-decade-old system, particularly whether boards of directors made up of local officials from member towns can accurately set rates to cover future costs. The programs can run out of money, Secretary of State Dave Scanlan said in a Tuesday, May 13, press conference, when the directors’ lower rates too far to attract customers, depleting their reserves.
The other two of the four pooled risk management programs in New Hampshire — Primex, which deals with property and liability insurance, and SchoolCare, which handles health insurance programs for school systems — are in good financial shape, said Scanlan.
New Hampshire Interlocal Trust covers 28 communities, some as big as Hillsborough County government and some as small as a single charter school, with the bulk being small and mid-sized towns.
The trust’s board had cautioned members in 2024 that it would close this summer because the cost of paying claims exceeded its income from rates paid by its roughly 3,000 members. It dissolved a month ago after almost running out of money to pay claims and was taken over by a receiver appointed by the Secretary of State.
“The claims increased significantly in January,” said Lance Turgeon of consulting firm WIPFLI, the appointed receiver.
He said it’s not clear why the cost of health claims changed so quickly, although the high cost of weight-loss drugs may have played a part. Turgeon said the program’s cash on hand has become so low that it was unclear from week to week whether it would be able to cover claims from members.
Scanlan noted that, under state law governing these programs, any shortfall in paying claims would be covered by taxpayers in the member communities.
Wilton Deputy Town Administrator Janice Pack said that NHIT has informed the town that it may assess members for any funds it needs.
“Really? You’re dropping our coverage and you say you might want more money?” Pack said. “There’s no provision for that in the contract we signed with them. We don’t think it’s legal,” adding that NHIT also informed them that all of their bills must be paid by June 10 or they will cease paying claims.
The Interlocal Trust is one of two programs, including Albert C. Jones Employee Benefits, subject to an administrative enforcement action by the Secretary of State’s office. It is determining whether the programs followed state law, including whether they “violated requirements for surplus going back to members,” said Christina Ferrari, an attorney representing the state in the matter.
As for HealthTrust, which is larger than Interlocal Trust and has some 70,000 members in scores of government entities, the Secretary of State’s office has had a long-running dispute about whether they need to raise their rates to maintain enough surplus money to cover emergencies.
Pooled risk-management programs were authorized by state law in 1987 to help smaller communities self-insure for employee health insurance or against liability or property damage.
Under self-insurance, communities or businesses take on the risk of costs or losses rather than buying coverage from insurance companies. This can lower expenses, partly because pooled programs are exempt from federal and insurance taxes and some regulations, but the programs need a large number of members to spread out the risk.
Monadnock Ledger-Transcript reporter David Allen contributed to this story. This article is being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.
