Board to break off health insurance risk pool [The Telegraph, Nashua, N.H.]

Aug. 23--CONCORD -- The Local Government Center's board of directors on Thursday approved breaking off its lucrative, for-profit health insurance risk pool for cities and towns into a separate, independent nonprofit entity.

The LGC board also endorsed segregating its lobbying and government services arm -- the New Hampshire Municipal Association -- into its own nonprofit, the NHMA Inc., separate from the new HealthTrust Inc. and other LGC operations.

The NHMA change, effective Sept. 1, served a clear political purpose, since this takes the umbrella group's lobbying arm outside of control of the new LGC Executive Director and state Senate President Peter Bragdon, R-Milford.

Last week, Bragdon took the $180,000-a-year job to manage the health risk pool and separate ones offering property/liability and workers' compensation insurance coverage for local governments.

Bragdon has said he'll step down as Senate president when the full Senate picks a successor Sept. 3.

"The legal steps that needed to be worked through to get this done has taken an incredible amount of time -- but we believe necessary to ensure an independent organization," Bragdon said in a statement.

"Staff has done a brilliant job of focusing on serving members throughout. We will move forward full tilt to continue to deliver the outstanding services that our members deserve and expect from HealthTrust, Inc."

Once complete on Sept. 1, the LGC will cease to exist and be renamed NHMA Inc., while separate nonprofits will manage the risk pools and own the group's real estate.

LGC officials maintain that this shuffle goes beyond what the state Bureau of Securities Regulation and a hearing officer insisted upon in rulings that a 2003 reorganization by the LGC had been illegal.

But David Lang, president of the Professional Fire Fighters of New Hampshire and a former LGC member, said this reorganization doesn't change the status quo operations that led to a state order requiring it to refund more than $50 million to member communities.

"Converting the LGC parent to the NHMA, it's an interesting concept," Lang said. "It's the same as the captain of the Titanic saying he's going to change the name of the ship just before it hit the iceberg. The time is now. This board needs to have significant change and a different direction, and that's not what we have here."

Bureau of Securities Regulation Director Barry Glennon said his office had yet to receive documents from the LGC that describe three "separate asset purchase agreements" involving trusts for health, property-liability and the NHMA.

"Quite frankly, we have yet to receive anything official from them as to what they have done," Glennon said during a telephone interview. "We are learning as you are learning."

In a memo, LGC legal counsel David Frydman wrote that the asset purchase route is needed because it's illegal for a for-profit, limited liability company like the LGC and its risk pools to simply merge into individual, nonprofit entities.

Former LGC interim Director George Bald said he had spoken with state regulators over the past several weeks about the LGC's reorganization plans.

"I'm sure we'll get all the official information and then be able to respond to what the LGC board has carried out," Glennon said.

The agreements permit HealthTrust to provide a variety of in-house services to the other insurance pools and to NHMA, including human resources, IT and maintenance.

All told, HealthTrust would receive income of about $95,000 a month from the other entities and pay $30,000 a month to rent its office space from a real estate trust.

Kevin Landrigan can reached at 321-7040 or klandrigan@nashuatelegraph.com. Also, follow Landrigan on Twitter (@Klandrigan).

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