Two programs that help communities self-insure their employees are no longer in jeopardy of collapse. However, the issue remains volatile with a major lawsuit and a state investigation pending.
On Wednesday, the Secretary of State’s office said that all known claims have been paid for New Hampshire Interlocal Trust, a pooled risk-management program covering 3,500 employees of 38 towns and school districts that was put into receivership in April 2025 because it had basically run out of money. Another program that went into receivership a decade ago, Property and Liability Trust, seems solvent enough to handle any claims, the office said.
Complications with risk pools have towns and school districts scrambling to pay for health care as they face dramatic cost spikes, which have triggered disputes.
The cities of Dover and Portsmouth are both contesting payments to SchoolCare, another pooled risk-management program that covers educators, with Dover suing over a $1.7 million bill. The Secretary of State’s office has a regulatory proceeding against HealthTrust, the largest such program in the state, arguing that it is hiding too much of its operations, a claim that HealthTrust disputes.
What’s pooled risk management?
Pooled risk-management programs were authorized by state law in 1987 to help smaller communities cover employee health insurance costs and self-insure against liability or property damage. They are non-profits with legal status similar to that of municipalities with boards that set rates, collect payments and build reserves to cover future costs.
Under self-insurance, communities or businesses take on the risk of costs rather than buying coverage from insurance companies. This can lower annual expenses because pooled programs are exempt from some taxes and regulations and because the programs can negotiate lower costs, but they need a lot of clients to spread out the risk — hence the idea of combining many municipalities into risk pools.
However, Secretary of State Dave Scanlan said repeatedly during a press conference that pooled-risk programs are not insurance programs as people understand them. Unlike buying an insurance policy from a private company, there is no backup source of funding to cover unexpected expenses. The only money to cover health-care, liability and workers compensation costs is that collected from employees and saved by the program.
If the program hasn’t kept enough money, huge health-care or lawsuit liability costs can land on individual employees or taxpayers.
“There is no other source of revenue,” he said. “Magic money does not exist.”
Complications
David Lang, chief of staff for Scanlan, said financial problems can arise when pooled-risk programs start competing for clients, giving them an incentive to cut assessment rates rather than following advice from actuarial firms. When that runs up against rising or variable health costs, it can lead to serious problems: For example, one organ transplant led to a $600,000 claim under New Hampshire Interlocal Trust, worsening its financial plight.
Further complicating things, Lang said, is that programs must keep money to pay short-term costs that often come up in health care but also keep enough to cover long-term costs, such as workers’ compensation that can last for many years. The debate about how much of a reserve they must maintain for such outlays was a major reason the state passed two laws last year overhauling operations and putting the Secretary of State’s office in charge.
A basic issue, Lang said, is balancing towns’ and school districts’ autonomy with the need to act collectively, especially when that action costs local taxpayers.
“How do you balance the need for independence of subdivisions … with a modicum of security in a collective environment?” he said. “This is New Hampshire. We value freedom and independence.”
