He, Retirement Fund Chairman Sixto Igisomar and legal counsel Viola Alepuyo were in the House chamber to express their support for House Bill 17-77 which seeks to repeal a law that hinders the Fund from providing an affordable insurance coverage to government employees and retirees.
Villagomez said the proposal will allow the CNMI to align the retirees’ insurance coverage with that of the active government employees so the Fund can negotiate a one-group coverage that is more affordable.
However, due to Section 8363(a) of the Commonwealth Code, the Fund cannot negotiate a lower premium cost.
The Fund’s hands, Villagomez said, are tied by the language of the law which “restricts our ability to provide affordable coverage for everyone.”
The Fund, Villagomez said, cannot change the coverage provided to retirees because of the restriction in the current law which states that “retirees shall be provided the option to have life insurance coverage under the same terms and condition in force at the time of their retirement.”
Villagomez said the main factors affecting the cost of group life insurance coverage are group size, group demographics and coverage amount.
Bigger groups, he said, are generally cheaper to insure.
Keeping different sets of policies for active employees and retirees will be a huge problem for retirees, because a separate policy for them will increase the cost drastically, Villagomez said.
This in turn will discourage enrollment and further increases the cost both to the retirees and active employees, he added.
The Fund, Villagomez said, is doing all it can in order to negotiate for an affordable insurance coverage for active employees and retirees.
“Considering that Fund is underfunded, we can say that the cost of insurance adds to the unfunded liabilities of the CNMI,” Villagomez said.
Since the H.B. 17-77 was not in yesterday’s calendar, Vice Speaker Felicidad T. Ogumoro, Covenant-Saipan, said the House could not act on it.
Rep. Joseph M. Palacios, R-Saipan, said the retirees themselves should be allowed to air their concerns as well.
