Understanding the Intersection of Workers' Compensation and Medicare: Key Insights Explained
Revised Output
Navigating the intersection between workers' compensation and Medicare is crucial for workers and their healthcare costs. Neglecting to notify Medicare about a workers' comp arrangement can lead to claim denials and the need to repay Medicare.
Workers' compensation is an insurance program that covers employees with job-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor oversees this benefit, which applies to federal workers, their families, and certain other entities.
As people age or become eligible for Medicare, it's essential to understand how workers' comp benefits might impact Medicare coverage for work-related medical expenses, helping avoid complications with medical costs.
The Lowdown on Workers' Comp Settlements and Medicare
Under Medicare's secondary payer policy, workers' compensation must cover any treatment related to a work-related injury before Medicare steps in. However, if immediate medical expenses arise before the workers' comp settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid recovery procedures, the Centers for Medicare & Medicaid Services (CMS) monitors the amount a person receives from workers' comp for injury- or illness-related medical care. In certain cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after the WCMSA's funds are exhausted.
What Settlements Demand Medicare's Attention?
Workers' comp must provide a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. This includes the total amount of workers' comp owed to the person or on their behalf.
Submitting a TPOC is necessary if:
- The person is already enrolled in Medicare based on age or Social Security Disability Insurance, and the settlement is $25,000 or more.
- The person is not currently enrolled in Medicare but will qualify for the program within 30 months of the settlement date, and the settlement amount is $250,000 or more.
- The person files a liability or no-fault insurance claim.
"Pro-tip: Know the ropes of Medicare set-aside## Got Questions?
A person can contact Medicare with any query by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. If a person has questions about the Medicare recovery process, they can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
Creating a Medicare set-aside is voluntary. However, if a Medicare beneficiary wants to set one up, their workers' comp settlement must be over $25,000. Alternatively, it must be over $250,000 if the person is eligible for Medicare within 30 months.
Yes, it is prohibited to use the money in a Medicare set-aside arrangement for anything other than the designated purpose. Misusing the money could lead to claim denials and repaying Medicare.
"Learn more: Understanding Medicare set-aside arrangements## The Bottom Line
Workers' compensation is insurance for job-related injuries or illnesses for federal employees and certain groups.
It's important for those enrolled in Medicare or soon to be eligible to educate themselves on how workers' comp may impact their Medicare coverage to avoid problems with medical expenses.
Properly notifying Medicare about workers' compensation agreements is crucial to avoid future claim rejections and repayment obligations.
Your Medicare Aide
For additional resources to help navigate the tricky world of Medicare, explore our Medicare center.
- The Centers for Medicare & Medicaid Services (CMS) monitors the total payment obligation to the claimant (TPOC) from workers' compensation to ensure that Medicare covers the correct share of a person's work-related medical expenses.
- If a Medicare beneficiary wants to establish a Medicare set-aside, their workers' compensation settlement must be at least $25,000 in value, or if they are eligible for Medicare within 30 months, the settlement must exceed $250,000.
- Misusing funds allocated in a Medicare set-aside arrangement is prohibited, as it can lead to claim denials and the need to repay Medicare.
