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Lawyers meet in dispute over insurance management

By Kathy McCormack
Associated Press Writer / October 4, 2011

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CONCORD, N.H.—Both sides in a long-running dispute over how a nonprofit organization manages health insurance for 80,000 state workers and retirees in New Hampshire communities met for the first time Tuesday with the officer appointed to decide the case.

The Local Government Center, which provides services and programs and for local governments, also manages health insurance pools for the workers. The state Bureau of Securities Regulation says the center has acquired a surplus more than $100 in million in taxpayer money and needs to return that amount to cities and towns.

The center says it has returned surpluses through the years in the form of rate reductions, saying communities prefer to have stability rather than get a check one year, and see a rate spike the next.

And there are others who want to have a say in the dispute besides the state and the center -- lawyers for various unions representing firefighters, police officers, teachers and other state workers.

Hearings officer Don Mitchell said first, he needed lawyers for the center and the Bureau of Securities to agree on what the disputed facts are. Then he said he wanted them to condense their arguments.

"If you keep that focus, we'll move through," Mitchell said at an organizational meeting for an upcoming administrative hearing on the dispute.

Mitchell also scheduled a hearing for Oct. 18 on whether the interested groups can intervene.

Some attorneys represent various individuals who work at the center who are named in the state's Sept. 2 complaint against it. Others represent unions such as the Professional Fire Fighters of New Hampshire; the New England Police Benevolent Association; the State Employees' Association of New Hampshire; the National Education Association of New Hampshire; the American Federation of State, County and Municipal Employees; and the American Federation of Teachers of New Hampshire.

The firefighters' union originally sued the center in 2010 alleging that the center was misusing health insurance premiums and not returning surplus funds to New Hampshire communities, as required by state law. The lawsuit was eventually dismissed.

Mitchell, who recently retired as executive director of the Public Employees Labor Relations Board, said his contract as hearings officer for the case runs through Dec. 22. He said he was offered a longer term but didn't think that would be necessary.

The bureau's complaint also accuses the center of violating securities laws and seeks administrative penalties. The center recently acknowledged its 2003 corporate restructuring was not done correctly and that it would return to a nonprofit status. The bureau had called the restructuring illegal and now is assessing the center's proposed changes.