What is Workers’ Compensation Medicare Set-Aside in Florida?
If you have been injured in a workplace accident and are seeking workers’ compensation benefits through your employer’s insurance, you may come across a term called “Medicare Set-Aside.” But what is it, and how does it work in Florida?
If you are eligible to receive workers’ compensation benefits for your work-related injury or illness, Medicare may require you to use an agreement that “sets aside” a portion of your settlement in order to cover future medical expenses related to your on-the-job injury.
As you may have guessed, this agreement is called a Workers’ Compensation Medicare Set-Aside Agreement or WCMSA.
How Does Workers’ Compensation Medicare Set-Aside (WCMSA) Work?
Workers’ Compensation Medicare Set-Aside allocates a portion of your workers’ compensation settlement to pay for future medical care for your injury or illness. Medicare may require you to use a WCMSA if you are currently receiving Medicare benefits or will receive them in the future.
Medicare benefits are available to people age 65 or older, and people with disabilities who are under age 65. Basically, a Medicare Set-Aside agreement works as a trust. A WCMSA contains funds that can be used to pay for future medical services required for your workers’ compensation injury or illness.
You must exhaust all of the funds in a WCMSA before Medicare agrees to pay for any future treatments related to your work-related injury or illness. Under a WCMSA agreement, Medicare can refuse to pay for future medical expenses related to your injury until after you have used all of the funds appropriately.
Seeking Approval from CMS to Receive a WCMSA
Often, an injured worker will need to seek approval from the Centers for Medicare and Medicaid Services (CMS) to receive a Medicare Set-Aside agreement. Failure to get approval from CMS can hinder your ability to pay for medical expenses related to your workers’ comp injury.
If the injured worker, their workers’ compensation attorney, and the employer’s insurance company agree on a settlement amount in a Medicare Set-Aside agreement, but CMS does not approve the WCMSA, the federal agency is likely to refuse to pay for future medical expenses. Medicare will cover the cost of your medical treatment only when CMS approves the WCMSA amount, and the funds are used appropriately.
CMS will review your request to approve a WCMSA only if:
- You are a Medicare beneficiary, and your total settlement amount exceeds $25,000; or
- You have a reasonable expectation of becoming a Medicare beneficiary within 30 months of reaching the settlement, while their total settlement amount for future medical services, loss of income, and/or disability is expected to exceed $250,000.
How is a Medicare Set-Aside Funded in Florida?
There are two ways to fund a Medicare Set-Aside in Florida:
- A lump-sum payment; or
- A structured settlement.
When choosing to fund a Medicare Set-Aside with the structured settlement option, you may be able to retain more of the settlement proceeds because Medicare will pay for any remaining medical services to treat your injury or illness once you exhaust your Medicare Set-Aside funds. Medicare will cover any remaining medical costs until the structured settlement replenishes your funds the following year.
When choosing the lump-sum payment option, you must deplete the entire Medicare Set-Aside account before Medicare provides coverage for future injury-related medical treatment. If you have more questions about how Medicare Set-Aside works in Florida, schedule a consultation with our Tampa workers’ compensation attorney at Kobal Law. Call at 813-873-2440 to get a case review.