Medicare Set Aside Agreements

Workers' Compensation Lawyers Serving Chicago and Surrounding Cities

A Medicare set aside agreement is a financial arrangement through which part of an employee's workers' compensation settlement would be allocated to payment of future medical expenses that would ordinarily be covered by Medicare if the injury or illness were not work-related. A Medicare set aside agreement is administered by the Centers for Medicare and Medicaid Services (CMS). It calls for the creation of an account in which monies are set aside for future medical payments. These arrangements are very complex, and it is imperative for workers, employers, and insurers to retain an experienced Chicago workers' compensation attorney to handle the settlement of a case in which a Medicare set aside agreement is needed.

Understanding Medicare Set Aside Agreements

In a workers' compensation case, a settlement is an agreement between the injured worker and the insurer to release some or all of an insurer's responsibilities in exchange for a certain amount of money. Usually, the settlement is paid in a lump sum, but it can be paid in installments. In most cases, settlements close a claimant's right to workers' compensation benefits, including future medical care. Special issues may arise for older workers who are already or soon will be eligible for Medicare.

A Medicare set aside agreement in a workers' compensation case is required if: (1) a workers' compensation claimant is a Medicare beneficiary, and the amount of the settlement is more than $25,000, or (2) a workers' compensation claimant reasonably expects to be eligible for Medicare within 30 months of the date of the workers' compensation settlement, and the total amount is anticipated to be more than $250,000.

The Medicare set aside agreement is a financial agreement. It puts aside some of a worker's workers' compensation settlement with the goal of paying for future medical services related to the illness or injury. These funds need to be spent on those expenses prior to Medicare paying for any treatment of the injury or illness.

A Medicare set aside agreement is generated as a trust that can be administered by the worker, the worker's family member, or someone appointed by both the worker and the Centers for Medicare and Medicaid Services. The worker is not allowed to spend the money that is set aside in the trust until he or she becomes eligible for Medicare benefits. CMS must be provided with a full accounting of the money spent. If the requirements are not met, the worker could be audited and sued by the Centers for Medicare and Medicaid Services. Why should the employer or insurer care about this? If the worker is sued, the account administrator or workers' compensation insurer could be brought into the litigation too.

Everyone involved in a workers' compensation claim has substantial responsibilities under Medicare Secondary Payer laws. They must protect Medicare's interests if there are future medical expenses being addressed. There is no statutory or regulatory provision that mandates that a proposed Medicare set aside agreement be submitted to the Centers for Medicare and Medicaid Services, but it is recommended that a proposal be submitted for review. The Centers for Medicare and Medicaid Services only review proposals when: (1) the worker making the claim is a beneficiary of Medicare, and the total settlement amount exceeds $25,000, or (2) the claimant reasonably expects Medicare enrollment within 30 months of the settlement date, and the anticipated settlement amount for disability or lost wages over the life or duration of the agreement and future medical expenses is anticipated to be more than $250,000.

Contact a Work Injury Lawyer in the Chicago Area

It is often beneficial to have an experienced workers' compensation lawyer representing you in your claim. However, it is especially important to retain an attorney if you are older and trying to settle your workers' compensation claim. If you are concerned about Medicare set aside agreements, you should take the time to learn more about how they function. At Katz, Friedman, Eisenstein, Eagle, Johnson & Bareck, our attorneys handle workers’ compensation claims and appeals in Chicago, Quincy, Rockford, Champaign, Springfield, and Aurora, as well as other areas of Adams, Winnebago, Champaign, Sangamon, Kane, and Cook Counties. You can call us at 312-263-6330 or toll-free at 800-444-1525 for a free consultation.