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Bill studies plan to collect old State Insurance Fund debt

Mayra Domenech, director of the SIF’s advisory division, testifies during Wednesday’s hearing.

The House Labor Affairs Commission on Wednesday held a hearing on Bill 1096, which seeks to establish an incentive plan to benefit employers insured or uninsured with the State Insurance Fund (SIF), and shore up some $20 million for the public agency.

The plan would grant a 50 percent discount on the payment of debt accumulated by each insured participant with overdue and unpaid premiums, as well as uninsured employers in cases of liability and miscellaneous invoices related to workers insurance.

The bill also establishes eligibility criteria for joining the plan and its effectiveness, offers a waiver on interest payments, surcharges and penalties; eliminates debt older than 15 years, among other aspects.

In her testimony supporting the measure, Mayra Domenech, director of the SIF’s advisory division, said the public corporation could collect some $20 million through the incentive plan that would go directly into the government’s General Fund.

“It gives the SIF the chance to contribute to the General Fund, and in times of crisis, we recognize government unity in benefit of the island,” she said.

“The purpose of this measure complies with the provisions of the law, because certainly on overdue debts, when we pursue legal collection efforts in the courts, the most we can do is use the provisions of the Civil Code, which states that what we can collect is up to 15 years,” she said. “In real and practical terms, we have been unable to collect debts that old.”

Domenech estimated the SIF has about $60 million in bad debts, which can not be erased from the books. The measure would facilitate work on the matter with those employers who request the incentives plan.

“This project removes up to 50 percent of overdue debts and does not affect the budget we are presenting to the Legislature to operate (…) The current debts we believe we can collect, hover at around $100 million to $ 120 million, which is the balance of debt we have has in the last 15 years,” she said.

Meanwhile, Roxana Cruz-Rivera, deputy secretary of the Treasury Department, said her agency had no objection to the measure under analysis, since it provides that all funds raised are destined to the General Fund in accordance with the special legislation passed to address the government’s fiscal crisis.

She recommended reconsidering the percentage to be awarded as part of the Incentive Plan and how it can affect the government’s revenue projection.

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Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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