Both the Town of Derry and the Derry Cooperative School District will receive an early Christmas present in August, and so will some of their employees.
Both governmental entities contract with the Local Government Center (LGC) in Concord for health insurance policies. The Local Government Center has been ordered to return $33.2 million to members of the organization’s risk pool.
Larry Budreau, Human Services Director for the Town of Derry, said the money will be refunded in the form of a “contribution holiday,” or reduced premiums for the month of August.
“Because our employees contribute to their health insurance, part of the refund will go to them,” Budreau said. “Their contributions for August will be ‘relaxed.’”
Budreau said the reduction for August for Derry is $151,000.
The town has eight programs with the LGC, Budreau said: Blue Choice Point of Service, Matthew Thornton Blue, Luminos 2,500, a “high deductible” plan, Blue Choice, short-term disability, long-term disability, dental and life insurance.
Jane Simard, business manager for School Administrative Unit (SAU) 10 in Derry, said the school district is expecting about a million dollars in its contribution holiday: $800,000 for 2010 and $300,000 for 2011. A portion of that holiday will benefit the district and a portion will benefit its employees, she said.
Simard wasn’t sure what the distribution would look like. “We are waiting for guidance on that,” she said.
Kathleen Kennedy, Human Resources director for the district, said the district has five health insurance plans with LGC and two plans for retirees similar to Medicare supplement plans.
The Local Government Center was ordered to repay the funds after it was discovered that the organization had been using contributions from the health insurance risk pool to subsidize its workers’ compensation program, which has lost more than $17.1 million since its inception in 2000.