Committee debates solvency guardrails and whether to move oversight of pooled-risk plans to insurance department

CONCORD — The House Health Insurance Committee spent the bulk of its hearing debating legislation to set minimum reserve standards and other financial safeguards for municipal pooled-risk organizations that provide health coverage to cities, towns and school districts. Committee members heard testimony about recent insolvencies and a proposal to move oversight from the Secretary of State—s Office to the New Hampshire Insurance Department for day-to-day solvency supervision.

Committee chair and members said they wanted to pass a bill this year to reduce the risk of insolvency among pooled-risk groups but left open where ultimate regulatory responsibility should sit. The committee agreed to develop an amendment for next week that would set solvency standards in statute while delegating numeric implementation and enforcement to the Insurance Department through rulemaking.

Why it matters: pooled-risk organizations are run by political subdivisions that jointly self-insure to obtain coverage at scale. If a pooled risk runs out of reserves, member towns and school districts ultimately face the costs — a direct taxpayer exposure. Witnesses said recent events show the current framework has left gaps in early intervention and solvency oversight.

Secretary Scanlon, representing the Secretary of State—s Office, outlined the office—s current role under RSA 5 and defended its statutory charge while acknowledging the Insurance Department has tools focused on solvency. "We can certainly have a discussion on which state agency is appropriate. Maybe insurance is the best place," he said, adding the office has acted under the statute to raise the issue with the Legislature.

Testimony from committee counsel and outside witnesses described specific recent problems. A department witness said one pooled-risk entity, HealthTrust, self-reported in spring 2023 that reserves had fallen to concerning levels; the committee was told reserves fell to roughly "about 10 days of operating funds to pay claims," a level witnesses characterized as dangerously low.

A departmental actuary presented an estimate included in committee materials that, if no corrective action is taken, HealthTrust—s rates could rise as much as roughly 40% over a three-year period to rebuild reserves. Committee members and the Secretary—s Office also recounted a prior episode when large surplus reserves were returned to members (described in testimony as a roughly $40,000,000 distribution), a decision witnesses said later strained the organizations when claims rebounded after the pandemic.

Several members argued that the Insurance Department has a century-long regulatory focus on solvency, with on-staff actuaries and established monitoring tools. Representative Chorazin stated, "All of the things that you're asking, which are perfectly reasonable, are in place in the insurance department." Opponents cautioned that shifting oversight could change how pooled-risk organizations operate and raised concerns about perceived conflicts because the Insurance Department is funded by fees and assessments on regulated entities.

The committee conducted a straw vote on whether to pursue an amendment to put the administration and numeric rulemaking under the Insurance Department; the chair recorded a straw tally of members in favor and opposed. Members agreed to draft an amendment for the next meeting that would: set statutory guardrails and reserve thresholds, remove hard-coded dollar amounts from statute, and require the Insurance Department to implement specific numeric ranges and assessments by rule.

No final committee vote was recorded on the underlying bill during this session. Committee members said the goal is to pass a bill this year that will reduce the risk of insolvency while allowing technical details to be set through Insurance Department rulemaking rather than fixed statutory amounts.

Observers and municipal representatives who submitted letters to the committee told members they want stronger, more proactive monitoring; municipal finance officers and pool board members also oppose sudden, sharp premium increases and prefer an orderly rebuild of reserves. The committee set an amendment drafting deadline and signaled it expects to revisit the measure at the next hearing.

What—s next: committee staff will circulate an amendment for next week—s meeting designed to retain statutory guardrails but delegate numeric implementation to the New Hampshire Insurance Department via its rulemaking process. Members said any committee amendment must be ready in time for committee deadlines in the fall if it is to reach the House floor in January.