What is a Medicare Set-Aside Agreement

A Medicare Set-Aside Agreement (“MSA”) is an agreement that allocates a portion of the funds obtained through the settlement of a worker’s compensation claim for deposit into a bank account or annuity in order to fund the future treatment of a workplace injury. In order to protect the interests of Medicare, an injured worker who has settled their claim, is enrolled in or has applied for Medicare, and has been compensated for future treatment as part of a settlement, must “set aside” some of the settlement money into an MSA account so that, when payments need to be made for post-settlement treatment of a workplace injury, money can be withdrawn from the MSA account and Medicare will not be first-in-line to pick up those medical bills. Instead, Medicare will only pay for the future treatment of a workplace injury once the MSA account is completely depleted. The MSA does not change how Medicare handles payments for your non work-related medical expenses.

Generally, an MSA account must be funded as part of the settlement of a claim if 1) the injured worker is a Medicare beneficiary at the time of the settlement of a claim for more than $25,000 or 2) there is a reasonable expectation that they will enroll in Medicare within 30 days of the settlement and the total value of the settlement will likely exceed $250,000, and 3) the settlement closes out the issue of future medical expenses. Sometimes a Worker’s Compensation carrier will choose to consider Medicare’s interests by leaving claims for future treatment open and may decide to find an MSA later down the road, in order to close out the claim entirely.

Injured workers can either administer the MSA account themselves or have a professional entity administer it. Regardless of who administers it, the MSA account funds should only be used for the purpose of paying for the medical treatment of the workplace injury that was the subject of the settled claim.  

Contact one of our experienced Worker’s Compensations attorneys today to discuss your claim and how an MSA may be part of your claim.