The title of this blog sounds complicated, and I do this stuff for a living! Because it’s confusing and complicated, I wanted to take a few minutes to put it all in layman’s terms. So here goes…
SCENARIO: Your employee has a workers’ compensation claim. It could be a work related injury, illness or disease. It’s serious. They have been out of work for an extended period of time and medical bills are more than anyone anticipated. When this claim settles, the percentage of the permanent partial disability and any future medical services related to this work injury, illness or disease will be taken into consideration. The settlement may require that funds be set aside to pay for future medical bills.
If your employee is a Medicare beneficiary, or eligible to enroll in Medicare within 30 days of the settlement date, they can have a Workers’ Compensation Medicare Set-aside Arrangement (WCMSA) into which they can deposit these funds. CMSA is a financial agreement that allocates a portion of the workers’ compensation settlement to pay for future medical expense.
According to www.medicare.gov here is what the employee can and can’t do with the funds:
- Money placed in your WCMSA is for paying future medical and/or prescription drug expenses related to your work injury or illness/disease that otherwise would have been covered by Medicare.
- You can’t use the WCMSA to pay for any other work injury, or any medical items or services that Medicare doesn’t cover (for example, dental services).
- Medicare won’t pay for any medical expenses related to the injury until after you have used all of your set-aside money appropriately.
- If you aren’t sure what type of services Medicare covers, call Medicare before you use any of the money that was placed in your WCMSA.
- Keep records of your workers’ compensation-related medical and prescription drug expenses. These records show what items and services you got and how much money you spent on your work-related injury, illness or disease. You need these records to prove you used your WCMSA money to pay your workers’ compensation-related medical and/or prescription drug expenses.
- After you use all of your WCMSA money appropriately, Medicare can start paying for Medicare-covered services related to your work-related injury, illness, or disease.
We understand that this is complicated. If you still need help with the process, give our team at Sinclair Risk & Financial Management a call – it’s our job to make sure your company’s bottom line is protected and your employee’s interests are as well.