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Workers' compensation commission urges recurring funding or $100,000 bridge to avoid insolvency
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Summary
The director of the CNMI Workers' Compensation Commission told the House Ways and Means committee the fund that covers public-sector claims has a low cash balance and asked the legislature to commit either half of 1% of payroll (about $315,976 annually) or a $100,000 temporary allocation to keep the program solvent.
The director of the Commonwealth's Workers' Compensation Commission told the House Committee on Ways and Means that the commission's operating balance is low and asked the legislature for a recurring funding mechanism or a short-term allocation.
"We have approximately $174,000 in the bank strictly for operation and payment of claims," Director Francisco Cabrera told the committee, adding that the balance was $148,000 "as of today." Cabrera said the commission is not tapping a separate $1.5 million balance that largely comes from private-sector collections and is reserved for a second-injury fund.
Why it matters: the workers' compensation statute assigns responsibility for covering workplace injuries, and Cabrera said the program lacks a reliable, recurring local revenue stream for public employees. Without action, the commission could be unable to cover claims for government workers who are not otherwise insured.
Cabrera told lawmakers the commission's appeal is for a permanent funding source and proposed a specific figure: "half of 1% of the personnel cost," which he estimates would yield $315,976 annually. He added, "I'll take 50% of that. If not, give me $100,000," as a stopgap to keep the fund solvent.
The director also provided operational data: the commission received about 200 claims in 2024; of 36 government claims 27 have been resolved, and the private sector shows roughly 70–74% closure. Cabrera said payouts to date have been relatively small, “maybe about $11,000” in a recent tally, but warned the program's solvency depends on steady funding.
Lawmakers pressed on process and coverage. Cabrera described how the commission enforces declarations and penalties for noncompliance with mandatory insurance and explained that employers and insurers are expected to respond to injury notices within 14 days with final payments completed within 90 days for routine cases.
Discussion also touched on who currently pays for government-worker claims: Cabrera said the commission pays claims from penalties, fines and the small operating balance when agencies lack their own coverage. He noted many government agencies are not covered by private policies and that past attempts to create a funding mechanism have not been implemented by the legislature.
What comes next: Committee members and the director discussed options, including dedicating a fixed percentage of payroll or establishing quarterly department contributions to rebuild a reserve. Cabrera asked the committee to include fund language in the FY 2026 budget or provide a multiyear $100,000 allocation to maintain solvency.
Ending: Directors and committee members agreed to follow up; the committee recorded the request in its budget review but did not take a formal vote on funding during the hearing.
