CASH STRAPPED CNMI SKIPS DISABILITY INSURANCE PAYMENTS

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Public servants may be denied coverage

By Gemma Q. Casas

SAIPAN, CNMI (Marianas Variety, April 22, 2009)—The financially troubled CNMI government hasn’t been paying its workers disability insurance and the Workers Compensation Commission warned it will deny coverage claim for any injured public servant until its dues are paid.

Retirement Fund Administrator Mark Aguon said the government hasn’t been remitting payments to the government’s self-insurance fund or the special disability fund. The amount owed wasn’t specified.

"WCC records indicate that no government payments have been remitted," Aguon said in his memorandum to all department and activity heads of different government offices.

The Fund, which is also the administrator of the WCC, said the government’s failure to pay its dues is unduly taxing the private sector which also contributes to the pool of disability funds for all workers in the CNMI.

"The failure to make these required payments, in turn, forces private industry to shoulder this burden and acts as an indirect tax on these private employers and carriers. As former scions of private industry, the central government’s individual decision-makers cannot claim ignorance of this obligation," wrote Aguon.

He said prompt payment will remedy the situation but the coverage gap stays.

"[T]he failure to remit the appropriate funds shall not only unduly "tax" the private industry, it clearly grounds a WCC denial for any government employee who has been injured on the job…. Therefore, no worker’s compensation coverage exists for government employees’ workplace injuries of non-contributing government employers," he said.

A CNMI law requires each public and private employer to contribute to the Special Disability Fund.

A government agency with at least 200 employees has the option to be self-insured. However, such entity is still required to pay the special disability fund the equivalent of one percent of the total salaries paid but not to exceed $1,500.

Aguon said their records show there are seven government entities with over 200 employees and 30 more have less than 200 workers.

All of them are not paying their dues to the special disability fund, which is tapped to pay for the medical expenses of an injured public servant while on the job as well as provide for his disability benefits.

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