If you are eligible for Medicare benefits, or soon will be, you have additional considerations when deciding whether to settle a workers' compensation or personal injury claim. In some cases, Medicare will require a sum of money to be set aside to cover your future medical expenses resulting from a work-related injury or a non-work-related injury that resulted from someone's negligence. (Currently, there is no requirement for a set-aside in negligence cases, but that is another discussion for another day.)
There can be a delay between the time when you submit a medical bill to the workers' comp insurance carrier and the time when the carrier decides whether to pay the bill. Medicare does not want to pay medical expenses that workers' compensation should pay promptly. If, however, the workers' comp insurer denies payment of your medical bill pending a review of your claim, Medicare may make a conditional payment. If workers' comp pays the bill later, or if you receive a settlement for the claim in a personal injury lawsuit, Medicare will want its money back. You and the insurance carrier are responsible for ensuring that Medicare is reimbursed.
A Medicare Set-Aside (MSA) is a requirement by Medicare for a current or future Medicare recipient to "set aside" a portion of their settlement for future expenses that are incurred as a result of the work-related injury. You can only spend this "set-aside" money on medical expenses for the work-injury-related care, and you must be able to provide a strict accounting to show all funds were spent only for medical expenses related to your injury. Once the account is exhausted, Medicare will pay for the future injury-related care and won't require you to reimburse Medicare for expenses related to the work injury.
When does a workers' comp claimant need a MSA? You need it if (1) you are Medicare-eligible at the time of the settlement, and the total settlement value is $25,000 or greater; or (2) if there is a "reasonable expectation" that you will be Medicare-eligible within thirty months of settlement, and the total settlement value exceeds $25,000.
If you meet either of these criteria, you should ask your workers' compensation lawyer to set up a Medicare Set-Aside account for these funds in accordance with Medicare's requirements. Typically, a third-party vendor is used to calculate the amount necessary for this "set-aside." Also, that vendor will get approval of the calculated amount from the Center for Medicare Services.
Things are a little different if you settle a personal injury lawsuit resulting from someone's negligence. Medicare's future interests must be considered. Currently, there is no law or rule requiring a set-side account, but it may be a good idea to have one in order to protect the injured person's future interest in Medicare benefits. This area of the law is extremely complicated, and competent legal advice is highly recommended.
For information about Medicare set-asides, contact the Brock Law Offices at (800) 639-1575.