Navigating Workers' Compensation and Medicare: Crucial Information Explained
Needing to notify Medicare regarding a workers' compensation situation is crucial if you don't want to face claim denials or repayment obligations. To keep things simple, let's break it down:
- Workers' compensation is insurance that covers employees who suffer job-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP), which comes under the Department of Labor, handles this benefit for federal employees, their families, and certain other entities.
- If you're already on Medicare or are soon to be, it's vital to be aware of how workers' compensation might affect your Medicare coverage. This will help reduce confusion regarding medical expenses related to workplace injuries.
How does a workers' comp settlement impact Medicare?
Under Medicare's secondary payer policy, workers' compensation must be the primary payer for any treatment connected to a work-related injury. If immediate medical expenses arise before you get your workers' compensation settlement, Medicare might cover first and start a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid recovery processes, the Centers for Medicare & Medicaid Services (CMS) generally monitor the amount you receive from workers' compensation for your injury or illness-related medical care. In some cases, Medicare might ask for a workers' compensation Medicare set-aside arrangement (WCMSA) to hold these funds. Medicare will only cover care after all the money in the WCMSA has been depleted.
What settlements need to be reported to Medicare?
For a WCMSA to be established, workers' compensation must submit the Total Payment Obligation to the Claimant (TPOC) to CMS. This is the total sum workers' compensation owes to the person or on their behalf.
If you're already on Medicare based on your age or SSDI and the settlement is $25,000 or more, submitting a TPOC is required. The same goes if you're not yet on Medicare (but will be within the next 30 months) and the settlement amount is $250,000 or more.
In addition to workers' comp, you may also need to report to Medicare if you file a liability or no-fault insurance claim.
Frequently asked questions
To get answers, contact Medicare over the phone (800-MEDICARE/800-633-4227, TTY 877-486-2048) or through a live chat on Medicare.gov during specific hours. For queries about the Medicare recovery process, call the BCRC at 855-798-2627 (TTY 855-797-2627).
A WCMSA is voluntary, but if you want one, your workers' compensation settlement must be over $25,000 if you're currently on Medicare or over $250,000 if you'll qualify within the next 30 months.
Using the money in a Medicare set-aside arrangement other than for the designated purpose can lead to claim denials and need for repayment to Medicare.
"Learn More: What to Know about Medicare Set-Aside"
Takeaway
Workers' compensation is insurance for federal employees and other groups for job-related injuries or illnesses. To ensure smooth sailing with Medicare, educate yourself on how workers' compensation can affect Medicare coverage and report required workers' compensation agreements to prevent future claim rejections and repayment obligations.
Medicare resources
For more guidance on navigating the complex world of medical insurance, check out our Medicare hub.
- For workers' compensation settlements over $25,000 if currently on Medicare or over $250,000 if qualifying within the next 30 months, a Total Payment Obligation to the Claimant (TPOC) must be submitted to the Centers for Medicare & Medicaid Services (CMS).
- A Medicare set-aside arrangement (WCMSA) can be voluntary, but using the money in it for purposes other than the designated ones can lead to claim denials and the need for repayment to Medicare.
- In addition to workers' comp, other settlements that may need to be reported to Medicare include liability or no-fault insurance claims.
