Earlier this week, the North Carolina Court of Appeals issued an opinion that will improve the lives of many injured workers who need Medicaid assistance after sustaining a work-related injury.
In the case of Phoebe Williford v. N.C. Dep’t of Health and Human Services and N.C. Division of Medical Assistance, the Court held that assets placed in a workers’ compensation Medicare Set-Aside account should not be considered a “countable resource” for purposes of determining a petitioner’s eligibility for North Carolina Medicaid. This opens the door for many injured workers to now apply (or re-apply) for Medicaid assistance even if they have a separate bank account containing thousands of dollars earmarked for future medical treatment.
A workers’ compensation MSA is not a piggy bank that an injured worker can use for anything s/he wants. “The purpose of a MSA is to allocate a portion of workers’ compensation award to pay potential future medical expenses resulting from the work-related injury so that Medicare does not have to pay.” The injured worker must keep the funds separate from his/her other accounts, must maintain an accounting, and must only use the funds for future medical treatment related to his/her injuries. MSA accounts are regulated and injured workers must report to Medicare. CMS recently published a toolkit to help injured workers manage their MSAs. As you see, there are specific restrictions and requirements on how the money is used.
In the Williford case, the petitioner originally did not qualify for Medicaid because she had more than $2,000 in liquid assets (i.e. her MSA account). The issue before the Court was whether the petitioner’s MSA account, containing approximately $46,000, should be counted as a “financial resource for purposes of determining the petitioner’s eligibility for Medicaid.”
The Court concluded that the WC MSA was not a countable resource because “…federal standards clearly establish that, in order for a given asset to be a countable resource, the asset must be legally available to the applicant without legal restriction on the applicant’s authority to use the resource for support and maintenance.” Because there are requirements governing the WC MSA, the funds were not “legally available” “without legal restriction” and not a “countable resource.”
That said, when settling a workers’ compensation claim any other portion of the settlement (i.e. lump sum cash) would likely be considered “legally available” funds. If appropriate, a special needs trust should be considered in certain cases to avoid these funds from disqualifying a person from Medicaid.