Medicare and Workers' Compensation Interactions: Essential Facts to Understand
Heads Up! Workers' Comp and Medicare: Straight Talk on Benefits and Settlements
Navigating workers' compensation benefits when you're on Medicare ain't exactly a walk in the park. Missing the notification part can lead to rejected claims, and even demand for repayment from Medicare.
Workers' comp is an insurance policy for folks who've been hurt on the job or developed a work-related illness. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor manages it, dealing mainly with federal employees, their families, and other eligible entities.
So, when you're in Medicare and you've got a work-related injury or illness, knowing how your workers' comp may impact your Medicare coverage becomes crucial. This is essential to avoid medical cost drama for on-the-job injuries or issues.
Workers' comp and Medicare: Frequent Collisions
Under Medicare's secondary payer policy, workers' comp is supposed to cover all medical expenses related to work-related injuries first. But, what happens when immediate medical expenses crop up before you receive your workers' comp settlement? Well, Medicare might kick in first, then start a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this recovery process, it’s best to make the Centers for Medicare & Medicaid Services (CMS) aware of the amount you get from your workers' comp for your injury-related care.
When necessary, Medicare might also call for a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only handle the care bills after all the money in the WCMSA has been spent.
Who's Gotta Report What to Medicare?
All workers' comp settlements worth $25,000 or more must be reported to the CMS by the workers' comp provider. That's if you're already in Medicare due to age or receiving Social Security Disability Insurance.
If you're not in Medicare yet, but you will be within 30 months of the settlement date, and the settlement amount is $250,000 or more, they've got to tell Medicare too. Duke it out in a liability or no-fault insurance clash? You gotta report that too.
Frequently Asked Questions
Contact Medicare with your query by dialing 800-MEDICARE (800-633-4227) for voice calls, or 877-486-2048 for TTY. Live chats are also available on Medicare.gov during certain hours. Have concerns about the Medicare recovery process? Hit up the BCRC at 855-798-2627 for voice calls, or 855-797-2627 for TTY.
A WCMSA is voluntary, but it must be established if your workers' comp settlement is over $25,000 and you're on Medicare. Or if it's over $250,000 and you become eligible for Medicare within 30 months. Messing with the money in a WCMSA? That's a no-no. Misusing the funds could lead to rejected claims and demands for repayment from Medicare.
From April 4, 2025, all full and final workers' compensation settlements involving Medicare beneficiaries must be reported to the CMS through the Section 111 reporting process. This includes details of the settlement amount, Medicare Set-Aside (MSA) allocation, and funding mechanisms (lump sum or annuity).
By reporting, maintaining records, and coordinating with providers as needed, Medicare beneficiaries can ensure that their workers' compensation settlements are properly managed and Avoid reimbursement obligations.
Bottom Line
Workers' comp is insurance for work-related injuries or illnesses for federal employees and certain other groups. To maintain hassle-free Medicare coverage and avoid reimbursement obligations, it's essential to know how workers' comp may affect your Medicare coverage. Don't forget to keep CMS in the loop about your workers' comp agreements. Your future self will thank you!
For more resources to navigate the complex world of medical insurance, check out our Medicare hub.
- Maintaining awareness of how workers' comp may impact Medicare coverage is crucial for workers who have work-related injuries or illnesses and are already on Medicare or will become eligible within 30 months.
- Under Medicare's secondary payer policy, workers' comp is expected to cover all medical expenses related to work-related injuries, but when immediate expenses occur before the workers' comp settlement, Medicare might cover first, triggering a recovery process.
- All workers' comp settlements worth $25,000 or more must be reported to the Centers for Medicare & Medicaid Services (CMS) by the workers' comp provider if the recipient is already in Medicare or receiving Social Security Disability Insurance.
- In the event of a workers' compensation Medicare set-aside arrangement (WCMSA), Medicare will only handle care bills after all the funds from the WCMSA have been exhausted.
- From April 4, 2025, all full and final workers' compensation settlements involving Medicare beneficiaries must be reported to the CMS through the Section 111 reporting process, including details of the settlement amount, Medicare Set-Aside allocation, and funding mechanisms.
