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Medicare Set-Aside Trusts

Workers Compensation concept

When a person is injured on the job, they are entitled to workers’ compensation through their employer’s workers’ compensation insurance provider. Workers’ compensation providers are under significant pressure from the federal government to ensure that the medical bills of injured workers are covered by the insurance provider to the greatest extent possible, especially if the injured worker is currently receiving or may in the future receive Medicare benefits. The same applies to individuals injured due to someone else’s negligence. Federal law, in fact, holds liable anyone who causes Medicare to pay for future medical costs relating to the workplace injury that should have been covered by workers’ comp or that should have been paid by a negligent personal injury defendant. A Medicare set-aside trust is a mechanism that insurance providers and covered parties utilize to avoid the ire of the federal government. Continue reading to learn about Medicare set-aside trusts, and reach out to a knowledgeable West Palm Beach Medicare planning and elder law attorney for assistance.

What is a Medicare Set-Aside Trust?

A Medicare set-aside (MSA) trust is a trust created to cover anticipated future medical costs for someone who expects to rely on Medicare. Medicare requires that all workers’ comp and personal injury settlement funds are exhausted before it will begin to cover the costs of treatment for an individual that are related to those injury claims. Insurance payouts are meant to cover future medical treatments, and Medicare wants to ensure that covered parties use all of those funds specifically for injury treatment and not for other purposes.

MSA’s are typically created as part of a settlement in a personal injury or workers’ comp matter. The trust will house a portion of the personal injury settlement or workers’ comp payout, to be “set aside” for coverage of future medical expenses that would otherwise have been covered by Medicare. Those set-aside funds must be depleted before Medicare will begin to cover the injured party’s qualifying medical expenses.

When is an MSA Required?

Whenever someone else is liable for a person’s injury, whether that is a negligent defendant or a workers’ comp insurance provider, Medicare becomes a secondary payer and requires the parties to set up an MSA. The regulations pertaining to set-asides are labyrinthine and complex.

As a general matter, parties who do or will rely on Medicare (those who are currently eligible or will be in the future) likely must generally establish an MSA whenever their injury is compensated by a third party and they receive a settlement of at least $25,000, in order to maintain Medicare eligibility. Workers’ comp claims are the most common type of claim that requires an MSA, but personal injury claims often require MSAs as well.

If you are concerned about your Medicare eligibility and are likely to receive a settlement after a workplace or negligence-based injury, talk to a seasoned Medicare planning attorney to ensure that you do not jeopardize your eligibility.

Plan for Your Medicare Eligibility

A skilled West Palm Beach Medicare planning attorney can help you and your family plan appropriately to maximize your chances to qualify for Medicare, Medicaid and other needs-based governmental programs. If you are in need of a seasoned and detail-oriented Florida Medicare planning and elder law attorney, contact the compassionate and savvy West Palm Beach trust and estates attorneys Shalloway & Shalloway at 561-686-6200.

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