Tag Archives: msa

Workers’ Compensation Medicare Set-Aside (MSA) Not a “Countable Resource” for North Carolina Medicare Eligibility

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.

Workers’ Compensation Medicare Set-Aside Accounts and Supplemental Coverage

When an injured worker is a Medicare beneficiary due to age or disability, a Workers’ Compensation Medicare Set-Aside (WCMSA) account will often be required as part of a settlement  of their workers’ compensation claim.  The funds in a WCMSA are set-aside in order to pay for future medical or prescription drug services related to the work related injury, illness, or disease that would normally be covered by Medicare. Once the funds in a WCMSA have been used appropriately, then Medicare can start paying for Medicare-covered services related to the work-related injury, illness, or disease. The WCMSA cannot be used to pay for any medical items or services that Medicare does not normally cover.

Workers’ compensation insurance provides 100% coverage of medical treatment for accepted medical conditions. Medicare, however, requires an 80/20 sharing of medical costs. Without a Medicare supplemental (also called “Medigap”) insurance policy, the injured worker would be required to pay significant co-pays and deductibles.  Supplemental insurance is not required by Medicare, but may be advisable to cover the cost sharing required by Medicare, especially if the beneficiary has other medical conditions that are not related to the work injury, illness or disease. However, the premiums for such supplemental coverage cannot be paid out of the WCMSA funds.

While Medicare does not provide coverage for prescription medications, WCMSA funds can be used to pay for medications related to the work injury, illness or disease. If there is a likelihood that the injured worker will exhaust the funds in their MSA, then purchasing a Medicare Part D prescription drug plan may be advisable to prevent the injured worker from having to pay full price for their medications once the MSA funds are exhausted. However, the financial benefit of having this coverage should be weighed against the cost of plan (2013 national average was $30.00 per month) since the MSA funds cannot be used to pay for the plan itself.

 

For more detailed information about workers’ compensation MSAs and supplemental coverage, visit www.Medicare.gov.