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Deputy city attorney: SchoolCare’s $30M assessment would cost Portsmouth about $1.57M; council weighs options
Summary
Deputy City Attorney Trevor McCort told the Portsmouth City Council that SchoolCare has issued a $30 million assessment across its membership and allocated roughly $1.57 million to the city; McCort said the assessment is not authorized under the membership agreement or RSA 5-B and outlined negotiation options including paying the operational share and spreading the remainder over two years.
Deputy City Attorney Trevor McCort told the Portsmouth City Council on March 2 that SchoolCare — the health-insurance risk pool for school employees — has issued a $30 million assessment to its members and assigned Portsmouth a prorata share of about $1.57 million.
"SchoolCare notified the city of Portsmouth that they were imposing an assessment in the amount of $30 million," McCort said, describing the city’s share as "one $1.57 million." He said SchoolCare’s reserves were exhausted and that the assessment was proposed to replenish part of those reserves.
McCort said the assessment is not authorized by the membership agreement between SchoolCare and its members and is not authorized by RSA 5-B, the statute governing municipal risk pools. He described SchoolCare’s reserve at June 30, 2023 as about $29.5 million that was then drawn down over subsequent years, and said SchoolCare’s rate-setting practices and an actuarial approach that McCort characterized as "less conservative" contributed to the shortfall.
Why it matters: the city is contractually obligated under collective-bargaining agreements to provide the agreed health-insurance plan to school employees. If the city were to pay an unbudgeted assessment of this size, McCort said there would need to be a public process and likely council approval of any expenditure of taxpayer funds.
Council members pressed McCort on specifics. He said SchoolCare’s rates were projected to increase by about 26% between the current and next fiscal year and noted prior increases (8.9% in the prior year). McCort also described ongoing negotiations aimed at finding alternatives, including payment plans negotiated by other members and a city counterproposal that would have Portsmouth cover its prorata operational deficit now while rolling the remainder into premiums over a two-year period.
McCort said the city would attend a SchoolCare board meeting Wednesday to push for board policies to increase transparency and protections for members, including clearer reserve thresholds and more frequent member communication. He also noted related state legislation — including Senate Bill 661 — that would set reserve and drawdown safeguards for risk pools.
Next steps: McCort said the city is negotiating with SchoolCare and will present recommended options to council and to the school board; any decision to expend city funds on an assessment would follow public procedures and formal council action.
