Judge: Insurer must open books to regulators
By TOM FAHEY
State House Bureau Chief
CONCORD – A Superior Court judge has rejected a move by the Local Government Center to block state regulators from examining the books of its health insurance operation.
The Bureau of Securities Regulation issued a subpoena for records of LGC's Health Trust in October, in response to a complaint about the insurer's operations. LGC provides health insurance to towns, cities and school districts through the HealthTrust operations.
LGC sought an injunction against the bureau, arguing it had no authority to delve into its records, despite a 2009 change in law that gave it added powers to regulate pooled risk programs like HealthTrust.
Merrimack County Superior Court Justice Larry Smukler, in a Dec. 11 order released yesterday, said the burden was on the LGC to convince him it had a good likelihood of prevailing in its fight for privacy.
Smukler's ruling says the organization failed to meet that burden. He said state law "explicitly authorizes the department to seek" information it needs to exercise its power over LGC and any other pooled risk management program.
Kevin Moquin said that with the court ruling in hand, the bureau will now start enforcement of it subpoena.
The bureau's subpoena ordered the LGC to hand over a list of records, including three years worth of financial records and budgets, copies of contracts with the LGC and its subsidiaries, documents related to a reorganization of the center in 2003, and a list of center employees and their salaries.
It's not clear how quickly the LGC will turn over records the state requested. Smukler's ruling did not address LGC's other challenge, which argued that this year's change in law regarding state authority was unconstitutional.
That issue, said LGC attorney Christopher Carter, "is still very much in front of the Superior Court, and will not be resolved until a final hearing."
Carter said he got the order late yesterday and was still reviewing it with his clients.
The LGC has also been waging a New Hampshire Supreme Court fight against the Professional Fire Fighters of New Hampshire to keep salary information private. The court heard arguments in the case in October, but has not ruled yet.
The citizen complaint that prompted the bureau's action alleged that HealthTrust was not using health insurance premiums exclusively for health insurance costs, and that surpluses were not being refunded to member cities, school districts and towns.
LGC told New Hampshire Public Radio this week it had transferred $14.5 million from the health insurance trust to the entity that controls worker compensation insurance, but argued it has the right to do so under state law.
PFFNH president David Lang said in a statement yesterday that in light of the NHPR report, "We are very concerned that public employee health insurance money is questionably being transferred and spent by the LGC in ways that go far beyond the stated purpose of that trust."