Workers' Compensation and Medicare: Important Facts to Understand
Navigating workers' comp and Medicare? Here's the lowdown, laced with essential insights for a hitch-free journey.
Workers' compensation insurance is a godsend for folks who've been injured or fallen ill on the job. But what happens when it intersects with Medicare? You gotta stay in the know to dodge claim denials and reimbursement obligations.
Workers' compensation is administered by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor. It covers federal employees, their families, and select entities. If you're already enrolled in Medicare or about to be, understanding the impact of workers' comp on Medicare coverage is crucial to avoid complications with medical costs for work-related injuries.
Settlement shenanigans with Medicare
Medicare follows what's known as the secondary payer policy. Workers' comp should be the main player paying for work injury treatments. If you have high initial medical expenses before the workers' comp settlement, Medicare might pay first, and the recovery process spearheaded by the Benefits Coordination & Recovery Center (BCRC) kicks off. To shun a recovery process and preserve your hard-earned settlement, the Centers for Medicare & Medicaid Services (CMS) should be kept abreast of the amount you receive for injury-related medical care. In certain instances, Medicare will push for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA). Medicare will only cover your medical expenses post-WCMSA exhaustion.
What settlements need the Medicare limelight?
The industry standard rules for reporting workers' comp settlements to Medicare stem from Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA). If you're a Medicare beneficiary and receive a settlement of $25,000 or more, a Total Payment Obligation to the Claimant (TPOC) must be submitted to the CMS. If you're not a Medicare beneficiary but will be within 30 months of the settlement date and the settlement is $250,000 or more, TPOCs are also required. Additionally, you'll need to report to Medicare if you file a liability or no-fault insurance claim.
The nitty-gritty of settlement reporting
As of April 4, 2025, all settlements involving Medicare beneficiaries require reporting to the CMS, regardless of the settlement amount. CMS will also nix zero-dollar set-asides starting July 17, 2025. However, if you're not a Medicare beneficiary, the reporting requirements may vary, and not necessarily require extensive reporting to Medicare unless you're expected to become eligible within a specific timeframe.
FAQs
Questions? Dial 800-MEDICARE (800-633-4227, TTY 877-486-2048) or drop by during the live chat hours on Medicare.gov. If you're curious about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
Owning a Medicare set-aside (MSA) is voluntary, but if you want one, your workers' comp settlement must exceed $25,000 or $250,000 if you're eligible for Medicare within 30 months. Abusing the funds in an MSA can lead to claim denials and reimbursement obligations.
"Learn more: Understanding Medicare set-asides## The Takeaway
Embrace workers' comp insurance as your support system for job-related injuries or illnesses, particularly as a federal employee or a member of select groups.
Remember, folks enrolled in Medicare or hurtling towards it need to stay informed about the impact of workers' compensation on their Medicare coverage to navigate medical costs smoothly. Don't shy away from reporting workers' compensation agreements to avoid future claim rejections and reimbursement woes.
Medicare resources
Explore our Medicare hub for the scoop on navigating the complicated landscape of medical insurance with ease.
- Understanding the intersection of workers' compensation and Medicare is crucial for federal employees and select entities, especially for those already enrolled in Medicare or approaching eligibility, to avoid complications with medical costs for work-related injuries.
- If a workers' comp settlement involves a Medicare beneficiary, the Centers for Medicare & Medicaid Services (CMS) should be kept informed of the amount received for injury-related medical care to prevent a recovery process and preserve the settlement.
- The reporting of workers' comp settlements to Medicare is essential, with the industry standard rules stemming from Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA). In general, Medicare beneficiaries must report settlements of $25,000 or more, and those not yet Medicare-eligible but expected to be within 30 months of the settlement date with settlements of $250,000 or more must also report.
- The Medicare set-aside (MSA) is an optional arrangement, but for settling workers' comp cases that exceed $25,000 or $250,000 if the claimant is eligible for Medicare within 30 months, owning an MSA is highly recommended to avoid claim denials and reimbursement obligations. Abusing MSA funds can lead to such issues.
For more information, discover our Medicare hub, a comprehensive resource to help navigate the complexities of Medicare and health-and-wellness, including therapies-and-treatments, nutrition, and science-backed advice.
