Coalition Of Communities Pushes For Voice In LGC Appeal

January 18, 2013 | 12:06 PM

By Amanda Loder

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A cadre of communities is pushing the New Hampshire Supreme Court to allow them to participate in the Local Government Center‘s appeal.  Fourteen towns, led by Durham, Peterborough, Salem and Northfield have filed a motion to intervene in the case.

The LGC insures municipalities, school districts, and agencies, handling hundreds of millions of taxpayer dollars.  The state argued that for years, the LGC over-charged for health insurance in order to illegally bulk-up its assets and prop-up its failing worker’s compensation program .  Last summer, a hearing officer sided with the state, and ordered the LGC to return more than $52 million to members.  The LGC is appealing that order to the New Hampshire Supreme Court.

The LGC is also arguing it shouldn’t have to return any money to municipalities that have left its insurance programs.  Most of the 14 communities that filed the motion have cut off at least one line of coverage, or severed ties completely.

So if the court sides with the LGC, these communities would see a smaller share of money returned…or none at all.

As Garry Rayno reports in the New Hampshire Union-Leader, these 14 towns:

“…claim the refunds should be in proportion to what communities paid for insurance coverage through LGC programs.

“The (Bureau of Securities Regulations) does not distinguish among members. Some joined the risk pools early or late, some left early or late, and some joined, left, and later rejoined,” said Durham Town Administrator Todd Selig. “By ordering the money returned to current members, it created windfalls for some, but inadequate recompense for others. That is, some members will receive an arbitrarily larger share than their contribution, and some an arbitrarily smaller share.”

The protesting towns have asked the court to let them intervene to address the issue of refunds proportional to contributions.”

Attorney Andru Volinsky, who represents the Bureau of Securities Regulation, has previously said there is nothing in the hearing officer’s order mandating that money be only be returned to current members.

Complicating matters, the LGC has committed to returning a much smaller sum, $22.5 million, to communities.  While it had initially proposed a premium holiday for this return (the rough equivalent of store credit for future insurance purposes), members objected,  In response, the LGC later said it would honor requests for cash payouts as well.

This is a really complex–and high-stakes–case.  So in that spirit, StateImpact has gathered a lot of the key information on our site.  To find out how much of the $22.5 million your community is set to get from the LGC, check out StateImpact’s searchable table.  And, to get up to speed on the twists and turns of this labyrinthine case, stop by and visit our primer post.