Foundation

The first Workers’ Compensation Bill was introduced by then Minister John Silk in 2012 under Bill No. 19. Most of the provisions and the program’s structure were patterned after the CNMI Workers’ Compensation Program. But due to some mixed reactions from employers who are concerned with the affordability and practicability of the program, the bill was amended and reintroduced by Min. Silk in 2016.  However, it was only passed by the Nitijela on September 20, 2019 which then became P.L. 2019-107. The purpose of the law is to provide compensation and rehabilitation of workers in respect to work-related injuries resulting to disability or death. The designated administrator of this program is the Marshall Islands Social Security Administration (MISSA or the “Administration”).

Highlights of the workers’ compensation program

• It requires private employers to secure payment with insurance carriers (accredited by the Banking Commission) for their workers;
• Government employees will be covered by the RMI Government Self-Insurance Fund. Government workers shall include employees appointed and employed by the Public Service Commission (PSC), Public Schools System (PSS), government agencies and instrumentalities, including any public corporation, state owned enterprise (SOE) and any other organization approved by the Nitijela, elected officials of both the national and local Governments, local government employees whose operations are being funded in full by the RMI Government and subject to audit under the supervision of the National Government.

Coverage

1. Death benefits of $1,200 for funeral expenses and $40,000 for workers who were fatally injured during the performance of their work.
2. Disability (temporary and permanent) benefits due to injuries while at work (link this to Benefits web page).
3. Medical/hospitalization benefits arising from injuries/accidents during work.
4. Maximum coverage is $40,000 per claim.

Two Funds shall be established

1. Special Disability Fund, to cover private workers. Payments into the Fund shall be made as follows:

   • Each employer shall contribute $10,000 for the death of an employee resulting from injury where the Administrator determines that there is no person entitled to MISSA’s disability benefits for such death;

   • Each insurer providing security for payment of workers’ compensation claims shall annually pay 2% of the total premium paid for such security during the preceding year; and

1. • All amounts collected as fines and penalties under the program’s provisions.

2. RMI Government Self-Insurance Fund

   • To be appropriated from the General Fund for Government employees, including government agencies and public corporations.
   • The Secretary of Finance shall be the custodian of this Fund.
     
     
     

To give employers, workers, insurance companies and other stakeholders ample time to understand the program and allow MISSA to design its structure and establish its systems and procedures, its implementation was deferred by the Cabinet until September 30, 2021.

Considering the scope of MISSA’s responsibility as its administrator and the COVID-19 situation worldwide, the Administration requested that it be given at least one year (from September 30, 2021) to come up with a compensation program that would address several areas of concern that were not clarified to MISSA when the law was passed. Consequently, the Cabinet postponed again its implementation date to September 30, 2022.

In mid-2021, MISSA management has already started a series of consultation with the Workers’ Compensation Commissioner of CNMI and other local stakeholders. It also initiated the creation of a Task Force whose members were appointed by the Cabinet. However, MISSA management and the Task Force members realized that the team will not be ready to implement the program by October 1, 2022. In consultation with Legal Counsel Divine Waiti, Bill 83 was introduced by MISSA Chairman and Health Minister Joe Bejang, Min. John Silk and other members of the Nitijela in late November 2022 in order to extend again the implementation of the program to October 1, 2023. The bill was passed by the Nitijela in January 2023.

Administration & Management

Workers’ Compensation Board (“WCB or the “Board”)

The WCB shall administer the program and has the following functions and authority:

• The 9-member Board of Directors of MISSA shall serve as the WCB;

• Make rules and regulations necessary to assure timely payment of compensation and reporting by insurance carriers;

• Select technical consultants, medical advisors, offices, and employees, as it deems necessary;

• Disburse from appropriate funds such expenditures as it deems necessary based on duly approved budget;

• Staff and managers of MISSA shall also render services to the Board as applicable and necessary;

• At the beginning of each calendar year, the Board shall submit a report to the Nitijela for the preceding fiscal year, including a detailed statement of receipts of and expenditures from the funds; and
• Has the authority to decide on matters related to adjudication of contested decisions by the Administrator and appeals by one party to a claim for compensation.

Administrator

The Workers’ Compensation Administrator or “Administrator” shall be the same as the Administrator of MISSA, and will have the following functions and authority:

• Shall maintain and keep open a Workers’ Compensation office during reasonable business hours. The WC Office shall be the offices of MISSA in Majuro and Ebeye;
• May issue subpoenas, administer oaths and compel the attendance and testimony of witnesses, or for the production of documents and other evidence during hearings related to claims for compensation;
• Approve, decline or put on hold a claim for compensation;
• Make rules and regulations, subject to WCB approval, to assure timely payment of compensation and reporting by insurance carriers.
• Determine claims on the basis of medical evidence and provide copies of reports for procedural fairness.

Workers’ Compensation Task Force

Due to the immense task of reviewing the Workers’ Compensation Act 2019 and designing its system and structure, the MISSA Board (also designated as the Workers’ Compensation Board), recommended to the Cabinet the creation of a Task Force to assist MISSA management in the pre-implementation stage of the program.

On October 7, 2021, the Cabinet approved the establishment of an 11-member Workers’ Compensation Task Force comprised of the following members:

1. Mark Stege, Chairman, representing Majuro Chamber of Commerce (MCC)
2. Bryan Edejer, Vice-Chairman, representing MISSA
3. Senator Jack Adding, representing the Nitijela
4. Daisy Alik-Momotaro, representing Civil Society/NGO
5. Harden Lelet, representing Ebeye Chamber of Commerce
6. Grace Abong, representing Moylan’s Insurance
7. Corazon Lagunay, representing Marshalls Insurance Agency
8. Malie Tarbwilin, representing the Government
9. Travis, representing the Labor Office
10. Teresa White, representing the self-employed sector
11. KalGov Councilman Anthony Maika, representing Kwajalein/Ebeye

1. Dr. Robert Maddison, representing the Ministry of Health & Human Services (MoHHS))
2. Ms. Helen Jetnil-David, representing MoHHS Medical Referral Committee; and
3. Mr. Joseph Tibon, Deputy Commissioner of PSC.

Responsibilities of the Task Force:

1. Appoint the Chair, Vice-Chair and Secretary (during the first meeting):
   • The appointed Chair (or the Vice-Chair if the Chair is not available) will preside over all meetings of the Task Force; and
   • The Secretary will take down notes and prepare the minutes of every Task Force Meeting
2. Review and approve the minutes of previous meeting(s);
3. Review P.L. 2019-107 RMI Workers’ Compensation Act;
   • Identify issues and provisions that may not be applicable, not practicable or not realistic to enforce in the Marshall Islands;
   • Determine the affordability and probability of compliance to the financial provisions of the law; and
   • Provide the right, detailed and more understandable interpretation of provisions that are generalized and may be subject to different interpretations.
4. Review the draft of Workers’ Compensation Procedural Handbook and Forms to be used.
   • Ensure that the provisions and procedures in the Handbook are in compliance and aligned with the Workers’ Compensation Law
   • Check if the Forms to be used are consistent and aligned with the Handbook in terms of contents, deadlines and requirements
   • Make changes and revisions as necessary.
5. Consult with and solicit comments and recommendations (by in-person meetings, virtual communication and public forums) from the Workers’ Compensation Board, Marshall Islands Social Security Administration (MISSA) management, Nitijela, Cabinet, Attorney-General’s Office, heads of government agencies, Chamber of Commerce, selected employer and employee groups, Work Comp Consultant (Advisor) and the general public;
6. Gather data, comments and recommendations resulting from the consultations;
7. Present a report to the Cabinet with the following highlights:
   • What was done and accomplished by the Task Force;
   • Results of consultations and recommendations; and
   • Proposed amendments to the Workers’ Compensation Law
8. Present and justify/defend the proposed amendments to the Nitijela during the hearing; and
9. Continue to work hand-in-hand with the Workers’ Compensation Board and MISSA management during the initial year and post-implementation period of the program, and make changes to the system and procedures when deemed practicable, legal and necessary.

What was accomplished by the workers’ compensation task force?

As of May 29, 2023, the Task Force has met on 41 occasions since January 2022 (mostly at the MISSA Board Room), with all meetings having detailed discussions lasting between 2 to 3 hours. The majority of the meetings were held face to face, with Zoom participation usually restricted to those residing off Majuro. Due to Covid-19 restrictions there were several meetings held only by Zoom participation.

Initially, the Task Force focused on reviewing the Procedural Handbook based on the CNMI Scheme. Several meetings were assigned for the review of the proposed Forms, many of which are destined to be incorporated into the RMI Workers’ Compensation Act Regulations. The Work Comp Advisor, Adrian Nippress, joined the Task Force in July 2022, shortly after his appointment to the role and was a significant contributor to the administrative and policy directions. In addition, Divine Waiti, Attorney and Parliamentary Legal Counsel, attended a significant number of the meetings, to ensure legal direction was provided.

Under the guidance of the Advisor and Attorney, the Task Force identified numerous issues and provisions of the RMI Workers’ Compensation Act which while established in the CNMI Worker’s Compensation Law, may not be applicable, practicable or relevant to the context of the Marshall Islands. Most such areas examined were the subject of formal recommendations to draft amendments to the RMI Workers’ Compensation Act.

During the extensive review and development of the Procedural Handbook, the Task Force researched and debated the interpretation of provisions in the CNMI Handbook and Law to ascertain their relevance and applicability to the Marshall Islands context. A number of these, such as the enforcement provisions at the commencement of the RMI Worker’s Compensation Scheme, have been adjusted. The application of these variations has been built into the draft Regulations, Procedural Handbook and Forms. The Task Force examined its ability to “Determine the affordability and probability of compliance to the financial provisions of the [Worker’s Compensation] law” and decided that an independent actuary would be required. MISSA sought financial resources via a Cabinet submission to engage an actuary, outside of the RMI. 

The Procurement process was a selective tender one that went to a select market of highly qualified and experienced actuaries in Australia and the United States of America (USA). The methodology used to seek and assess the tender responses was in accordance with MISSA and relevant RMI government procurement policies and procedures. The Advisor tested the market by approaching a series of 3 possible actuary tenderers via the Australian Actuaries Association and 1 USA recommended actuary known to MISSA. 

The applicant actuaries responded via a substantial and persuasive outline to the Chair, Bryan Edejer, which detailed the extent to which they would obtain relevant data and perform a financial analysis to advise the Task Force on appropriate insurance premium rates. The Evaluation Panel then independently assessed the applications received and appointed Deloitte Touche Tohmatsu (“the Actuary”) in late September 2022, signing a contract on 14 October 2022 and commenced the actuarial study immediately. 

The Actuary has worked closely with the Advisor and expended considerable effort in obtaining claims related data from the two participating insurers, RMI business data from MISSA and employee information from PSC and the PSS. Unfortunately, the essential work-related injury data has not been captured by either the MoHHS or the PSC/PSS resulting in delays being experienced in obtaining an analysis that could provide meaningful advice on appropriate insurance premiums to the participating insurers and the Nitijela. 

The Advisor continues to work with the RMI Government agencies named and the Actuary to reach the necessary conclusions. One of the issues raised with the Task Force has been the ability of small businesses to pay for Worker’s Compensation insurance premiums, which will be required when the Act is enforced next year. The Advisor and Senior MISSA officers who will administer the RMI Worker’s Compensation Act, have negotiated with the two main insurers Moylan’s and Marshalls Insurance Agency (MIA), to reduce their minimum insurance premium from $300 per year, to $150 or $200, respectively. The reduced minimum insurance premium means that around 70% of the 835 RMI employers who employ less than 4 workers, will be able to take advantage of this immediate cost saving on insurance premiums. MISSA’s actions will save $150 to $200 insurance costs per year for around 580 RMI employers, by working collaboratively with the principals of the two participating insurers. 

In more recent months, the Task Force has focused heavily on the consultation with the RMI Community including employers, workers, members of the Nitijela and Local Government representatives.  

Advisor Adrian Nippress commenced informal consultations with significant Majuro employers when he arrived in late August 2022. Following the Advisor’s visit to Kwajalein and Ebeye in September, meeting with all of the employers on these islands, he completed consultation meetings with the remaining Majuro businesses, totaling about 50 employer consultations. 

The Task Force then conducted 13 formal Public Consultations in Majuro, Ebeye and Kwajalein during October and November 2022, meeting with some 208 employers, workers, and other members of the RMI community. Since these consultations, the Advisor and some Task Force members and MISSA staff have written back to each attendee and confirmed the Task Force has considered the issues they have raised, reporting progress where relevant.