Understanding the Interplay between Workers' Compensation and Medicare: Key Points to Consider
Understanding the Interplay between Workers' Compensation and Medicare is Essential
All workers entitled to workers' compensation insurance, especially federal employees and certain other groups, need to comprehend the potential impact of their compensation on their Medicare coverage. This stands crucial for avoiding complications regarding medical costs resulting from job-related injuries or illnesses.
Workers' compensation serves as insurance for employees sustaining injuries or health issues directly linked to their occupation. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor oversees this benefit, which caters to federal employees, their families, and specified entities.
Medicare beneficiaries or soon-to-be enrollees must be aware of the possible effects of their workers' compensation benefits on Medicare's coverage of medical claims for work-related injuries. This knowledge is critical to prevent medical cost issues related to workplace accidents or illnesses.
Workers' Compensation Settlements and Medicare
The secondary payer policy in Medicare necessitates that workers' compensation should act as the primary payer for any treatment associated with a work-related injury. However, if immediate medical expenses appear before the workers' compensation settlement, Medicare might cover the costs initially and subsequently initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process, the Centers for Medicare & Medicaid Services (CMS) generally prefers to oversee the amount a person receives from workers' compensation for medical care related to their job injury or illness. In certain instances, Medicare may ask for the creation of a Workers' Compensation Medicare Set-aside Arrangement (WCMSA) for these funds. Medicare will only cover care after the WCMSA has been depleted.
Settlements to be Reported to Medicare
Under the Medicare, Medicaid, and SCHIP Extension Act (MMSEA), workers' compensation must submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure Medicare pays the optimal portion of a person's medical expenses. This represents the total amount of workers' compensation owed to the claimant or on their behalf.
Submitting a TPOC is necessary if the claimant is already enrolled in Medicare (based either on age or Social Security Disability Insurance) and the settlement is $25,000 or more. TPOCs are also essential if the claimant is not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount exceeds $250,000.
Besides workers' comp, the claimant must report the settlement to Medicare if they file a liability or no-fault insurance claim.
For more information on managing medical insurance in this complex landscape, refer to our Medicare hub.
- Medicare beneficiaries or soon-to-be enrollees should be aware that workers' compensation settlements act as primary payers for treatments related to work-related injuries, as per the secondary payer policy in Medicare.
- To avoid a potential recovery process by Medicare, it is recommended to coordinate the amount a person receives from workers' compensation for medical care related to a job injury or illness with Medicare's standards, which may involve setting up a Workers' Compensation Medicare Set-aside Arrangement (WCMSA).
- Under the Medicare, Medicaid, and SCHIP Extension Act (MMSEA), workers' compensation must submit a Total Payment Obligation to the Claimant (TPOC) to CMS if the claimant is already enrolled in Medicare based on age or Social Security Disability Insurance, and the settlement is $25,000 or more.
- Additionally, claimants must report settlements to Medicare not only from workers' compensation but also from liability or no-fault insurance claims.
