In many Pennsylvania (PA) workers’ compensation claim settlements, the issue of Medicare set asides (MSAs) frequently comes up. An MSA is an allocation of funds from the settlement that the injured worker reaches which is established in a trust (a separate interest bearing checking account adminstered by the injured worker) to pay for your future medical expenses relating to the work injury which might otherwise normally be covered by the Medicare program. While not all workers’ compensation settlements will require the establishment of an MSA account, it is important to understand the basic elements of this system to be prepared for your case.
The basic idea behind an MSA is that Medicare should not have to be the primary financial support for those who successfully settle a workers’ compensation claim. The aim is to prevent workers’ comp carriers from shifting their liablity onto someone else (something they love to do). Therefore, only those workers whose injuries may conceivably require future medical expenses that would be paid by Medicare need to establish an MSA.
The Centers for Medicare and Medicaid Services (CMS) has established guidelines for instances in which they will review MSA proposals. These include:
Workers’ Compensation settlements of $25,000 or more for individuals currently Medicare eligible
Workers’ Compensation settlements of $250,000 or more for individuals who will become Medicare eligible within 30 months
If your settlement does not meet these criteria, it does not mean that you do not have to establish an MSA. In most settlements, we have the workers’ compensation carier fully fund the MSA. In may cases, we complete the wage loss settlement portion and perfect the medical settlement with the MSA at a later point in time so as to not hold up the settlement due to waiting for approval from medicare on the amount of the MSA and medical settlement which can take many months to over a year. Timing is everything in negatiating a settlement. In some cases you will want to settle before Medicare gets involved and in other cases you will want to wait until they are required to get invloved. Once a settlement is reached, there is a quick way to get it approved by a Judge, which is required in all workers comp settlements in PA.