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.
To avoid misclassifying your workers follow these tips:
- Don’t make assumptions. If you are a business owner you should consult a tax professional and an attorney to ensure you are complying with IRS and labor laws when hiring staff or contractors.
- If contracting with staffing companies or labor brokers, make sure those agencies are properly classifying its workers as employees. Companies can be held responsible for labor violations of their contractors.
- Consider filing a SS-8 Form (Determination of Worker Status) with the IRS and ask that agency to determine whether the worker is an employee or independent contractor.
- Be aware that contractors set their own schedules and pricing, and perform the work as they see fit. If you want control over these areas, make sure you hire an employee.
- Check the workers’ compensation policies of any subcontractor you hire. (Look out for “ghost policies,” which aren’t designed to cover known employees.)
- Don’t rely on excuses such as “He only works a few days a week.” “She agreed to be an independent contractor.” “They use their own tools.” “He’s done this for so long he doesn’t need my supervision.”
Thanks to McClatchy DC!
The number of workers killed last year on the job in North Carolina has nearly doubled according to the state Department of Labor. A total of 44 people were killed in work-related accidents, all but one of the workers was classified as male, and all of the deceased workers were classified as “laborers” by the Labor Department. In 2013, there were only 23 deaths.
Labor Commissioner Cherie Berry analyzed the deaths and found that many accidents occurred between 60 and 90 days on the job, and a few workers were killed on the first day of their employment. This is largely related to lack of proper safety training before starting construction jobs.
In order to combat this increasing statistic, Builders Mutual Insurance Company worked with Commissioner Berry to create public service announcements about common hazards on construction sites. These ads are aired on Univision, and will be aired through March of this year.
Original Article found here: http://www.newsobserver.com/2015/01/22/4496586_number-of-nc-workers-killed-on.html#storylink=misearch
A yearlong McClatchy public-records investigation of government construction projects spanning 28 states discovered widespread misclassification of construction workers as independent contractors instead of employees (News & Observer, September 8, 2014). By misclassifying their employees, construction companies were able to undercut their law-abiding competitors while at the same time exploiting those desperate for work. As a result, the study found that North Carolina loses approximately $467 million per year in tax revenue from construction firms and their employees.
Such a scam is simple. Companies declare that hourly wage earners working for them are independent subcontractors, not employees. These companies do not withhold income tax or file payroll taxes on those workers. They also do not pay unemployment tax and are not required to provide workers’ compensation insurance. Thus, there is less paperwork and more profit for the companies. The McClatchy investigation estimated that these companies can save 20% in labor costs by treating employees as independent contractors.
Misclassification has far-reaching effects. The investigation discovered that these cheaters:
(1) ignored existing labor laws and the IRS by misclassifying employees;
(2) undercut the bids of law-abiding companies;
(3) cheated workers by eliminating unemployment insurance, workers’ compensation coverage and social security payments;
(4) benefited from lax government officials who could have stopped them.
North Carolina State Legislative Office Building
This week Senate Bill 174 passed the House Committee with some changes that preserve the rights of injured workers to have telephone hearings to get their benefits restarted and medical treatment expedited. For at least the past five years, injured workers have had the right to have emergency medical and urgent medical issues (i.e. surgery approval or treatment approval) heard quickly before the Industrial Commission. Usually a telephone hearing was scheduled within five days of the original motion and a final order was filed within two weeks of the original motion!
This was a great benefit to injured workers and helped restore them to their pre-injury condition. Physical therapy orders and medical records were considered by the Deputy Commissioners and a ruling was rendered. Thus, not only was this procedure good for injured workers, it was good for business too because it helped workers get the needed medical treatment as soon as possible and back to work.
Senate Bill 174 initially sought to curtail these medical motions significantly. However, after full discussion from both sides of the table, a compromise was reached. Although the expedited medical motion process has changed, we are very glad that this process is still available to injured workers. The final bill will be voted on by the House and Senate in the near future.
Thanks to everyone who contacted their North Carolina House representatives to discuss this bill.