PROPOSED MANDATORY HEALTH CARE Morgen allays fear of businessmen

While maintaining the importance of providing health insurance to employees, Sen. Morgen P. Tenorio yesterday assured members of the Society for Human Resources Management that the proposed Commonwealth Mandatory Health Care Act of 1999 will be carefully studied to make sure that it would not jeopardize the operation of businesses in the CNMI.

The measure, patterned after Hawaii, requires employers to provide a prepaid health care plan that will include hospital benefits, out-patient care, surgical services, medical consultations, diagnostic laboratory services, maternity benefits and substance abuse treatment.

Based on the proposal, a premium supplementation fund shall be established to be managed by the secretary of the Department of Finance. Employers who do not provide coverage as required shall shoulder the health care costs incurred by the eligible employee during the period.

The measure proposes a fine of $200 against violators.

Tenorio, who authored the bill, urged the association to attend the scheduled public hearing on Saipan as he welcomed their recommendations to fine tune the proposed measure.

“We are also concerned with the interest of the employers since they would be paying for the cost. But if you look carefully, what this bill wants to accomplish is fairness and equality. The bottomline is that the locals are getting shortchanged,” said Tenorio.

During the forum, a study on the cost effectiveness of implementing the bill was suggested to find out immediately how it will affect business community especially at this time when businessmen are hurting due to the economic slump.

“I’m afraid that if we implement this, the small companies may just close shop,” said Juan Tenorio, personnel manager of Hafadai Hotel.

In finalizing the draft copy of the bill, legislators must look at the effects of the law on the employers, employee and insurer because of the penalties involved, said Frank Agulto, assistant Human Resource Officer of the Public School System. He noted that imposing a penalty on the insurer may force them to pull out their operation on the island.

Members of the association recommended that a study on how the proposed law would affect the Employment Retirement Income Security Act (ERISA), a federal law implemented in 1974, which covers an extensive pension program and employee benefit plan.

Steve Woodruff, legal counsel of the Senate, said his office is already reviewing ERISA to find out how the proposed legislation can be passed without any conflict with the federal law.

He said the CNMI may lobby for an exemption from the U.S. Congress, similar to what it granted to Hawaii.