Medicare and Workers' Compensation Interactions: Important Information to Understand
Navigating workers' compensation and Medicare can be tricky business. Here's what you need to know to avoid any unwanted headaches down the line.
Workers' comp is your insurance blanket when you sustain an injury or illness on the job as a federal employee or in certain other groups. The Office of Workers' Compensation Programs under the Department of Labor is in charge of doling out these benefits.
When you're already on Medicare, or soon will be, it's essential to understand how your workers' comp benefits can impact Medicare's coverage of your medical claims. This is a must to prevent complications with your medical costs due to work-related injuries.
Workers' comp settlements and Medicare
Under Medicare's secondary payer policy, workers' comp should cover any treatment for a work-related injury before Medicare steps in. However, if you need immediate medical care before your workers' comp settlement arrives, Medicare might pay first and then seek reimbursement.
To avoid this reimbursement process, the Centers for Medicare & Medicaid Services (CMS) often monitor the amount you receive from workers' comp for your injury-related medical care. In some cases, they may ask for a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Once the money in the WCMSA is used up, Medicare will cover the remaining costs.
Settlements to report to Medicare
When a workers' comp settles, it needs to submit a total payment obligation to the claimant (TPOC) to CMS. This total consists of the amount owed to you from workers' comp. You need to submit a TPOC if:
- You're currently on Medicare, either due to age or Social Security Disability Insurance, and the settlement is $25,000 or more.
- You're not on Medicare yet but will be within the next 30 months after the settlement date, and the settlement amount is $250,000 or more.
Besides workers' comp, you also need to report if you file a liability or no-fault insurance claim.
Frequently asked questions
If you have questions, you can reach out to Medicare at 800-MEDICARE. During certain hours, you can also chat with them on Medicare.gov. If you're concerned about the Medicare recovery process, reach out to the Benefits Coordination & Recovery Center at 855-798-2627.
A WCMSA is voluntary, but if you want one, your workers' comp settlement must be over $25,000 or over $250,000 if you're eligible for Medicare within 30 months. It is illegal to misuse the money in a WCMSA for any purpose other than the designated one, which can lead to claim denials and reimbursement obligations.
For a detailed guide on setting up and maintaining your WCMSA, check out our resources on the Medicare hub:
- Obtain a Medicare Set-Aside (MSA) Allocation Report
- Record and maintain proper documentation
- Submit annual attestation
- Notify Medicare if MSA funds are depleted
- Ensure compliance with new CMS requirements (as of April 4, 2025)
By following these steps, you can rest easy knowing your Medicare coverage is in order and you're complying with all the necessary reporting requirements.
- To prevent complications with medical costs due to work-related injuries, it's crucial to understand how workers' comp benefits can impact Medicare's coverage of health-and-wellness-related medical claims.
- Under Medicare's policy, workers' comp should cover any treatment for a work-related injury before Medicare steps in, but if immediate care is required before the workers' comp settlement arrives, Medicare might pay first and seek reimbursement later.
- To avoid this reimbursement process, the Centers for Medicare & Medicaid Services (CMS) may ask for a workers' compensation Medicare set-aside arrangement (WCMSA) for injury-related medical care funds.
- When a workers' comp settlement is made, it should submit a total payment obligation to the claimant (TPOC) to Medicare if the settlement is $25,000 or more and you're currently on Medicare, or if the settlement amount is $250,000 or more and you'll be on Medicare within the next 30 months.
