School district hit with $2M surprise healthcare bill

LONDONDERRY — A surprise health insurance bill has left the Londonderry School District struggling to come up with $2 million by the end of the year to pay for its portion of a $30 million assessment to policyholders.

Nearly 90 school districts and other public entities statewide that receive health insurance coverage from SchoolCare, a nonprofit insurer, were notified via email last week that they’re on the hook to help front the bill by Jan. 1 if they wish to avoid interest fees.

As part of the email, the Londonderry School District was notified that it could expect the bill to be 1.5 times the $1 million premium the district already pays monthly.

But when the School District got the bill, it was for $2 million, or 6.7%, of the total $30 million assessment. That number was arrived at because 6.7% is the percentage that the School District has put into the total pool as the insurer’s largest entity, said School District Business Administrator Amity Small Tuesday during the School Board Meeting.

The School District has until Jan. 1 to pay its portion of the bill and will incur half a percent in interest fees, or $10,000, every month thereafter, until the July deadline. That means an additional $60,000 in interest if the bill is not paid in full by the end of July.

If the School District does not pay the bill by then, SchoolCare will stop paying the district’s claims and providing coverage for district employees.

“I just want to emphasize here that this assessment was a surprise to all participating members and was not based on your claims experience,” said Director of Human Resources Lisa Drabik. “This is not because Londonderry had higher claims than anyone else. The easiest way to understand this is that, overall, for the risk pool itself and all participating entities, the medical and pharmacy claims came in higher in 2025 than the monies they collected.”

Several options considered

To come up with the payment, Superintendent Dan Black and Small presented four options to the School Board to consider between now and December when the town tax rate will be set.

The options include:

Recalculating the 2025 financial report already delivered to the state that sought to retain $3.4 million for the district’s unassigned fund balance, and reducing or eliminating a taxpayer rebate of $1.36 million that the board had already voted on and announced;

Pulling from the $3.5 million reserve fund;

Building the bill into next year’s default budget;

Asking district employees to help pay the bill.

“We’re going to propose a solution by December,” Black said. “We spent a significant amount of time and effort on the district office plan and talking about full-day kindergarten and we’re about to start budgeting. We’ll have a reasonable sense of our operating budget in general by December. Then we can put something in motion to hopefully resolve this problem and move ahead.”

Some options ruled out

However, Amity warned the School Board they’d have to decide Tuesday night if they wanted to withdraw their financial report from the state, citing special circumstances, to redo it and resubmit it immediately so as not to delay setting the tax rate come December. The board unanimously agreed they did not want to take back the $1.36 already promised to taxpayers.

“Personally, I’m not of the mindset that I want to go back on that. I don’t want to do that to the taxpayers,” said Board Member Tim Porter.

“I agree, and I don’t want to put it on the employees, either,” added Board Member Amanda Butcher.

During the meeting, Chair Bob Slater expressed his frustration with SchoolCare for holding the districts hostage, some of which have no reserve funds to fall back on.

Slater said that in a presentation made to the Concord School Board last week, SchoolCare Executive Director Lisa Duquette indicated the nonprofit knew as early as the fall that this assessment was coming.

“Nobody has seen an auditor’s report or a financial report, and I have a problem with that,” Slater said. “My feeling is that SchoolCare should have met with each district individually and set up a plan to pay this money and work through the deficiencies they saw coming and not hold us hostage.”

In addition to the assessment, the School District should expect to see insurance rate increases across the board to make up for what SchoolCare’s actuarial study indicated was a $45 million deficit, Amity said.

“We haven’t gotten what our rate increase will be for the year either, so I think they were just trying to get where they need to be and make up for it with some of the rate increases,” she said.

More meetings to come

Slater expects a meeting will take place in the coming weeks with SchoolCare representatives, Secretary of State David Scanlan and school districts to discuss a long-term solution while the School Board continues to work on a plan over the next couple of months to pay off the $2 million by Jan. 1.

“This is not the way New Hampshire is supposed to operate business,” Slater said.

The Salem, Timberlane Regional, Windham, Hampstead and Derry Cooperative school districts are not insured by SchoolCare and are not impacted by this one-time assessment.

The insurance coop was created to provide more affordable and predictable rates for members in the risk pool.

According to the SchoolCare website, “SchoolCare was founded in 1995 as the New Hampshire School Health Care Coalition, bringing together associations representing public entity management and labor groups in the state. The coalition was formed in response to issues of providing employee health care, including quality, choice, cost control and service.

SchoolCare was founded by the NH Association of School Business Officials; NH School Boards Association; National Education Association of NH; NH School Boards Insurance Trust; and the NH School Administrators Association.

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