Worker's Compensation and Medicare: Essential Information
Navigating workers' compensation for federal workers necessitates alerting Medicare about any arrangement. Skipping this step poses risks, like claim denials and having to repay Medicare.
Workers' compensation is an insurance plan assigned to employees who sustain work-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor handles this benefit for federal employees, their families, and numerous other entities.
If you're currently on Medicare or about to join this insurance program, be aware of how workers' compensation might impact Medicare's coverage of medical claims. This knowledge can prevent complications regarding costs for occupational injuries or illnesses.
How does a workers' comp settlement affect Medicare?
Medicare operates under the secondary payer policy, which means workers' compensation should be the primary payer for treatment related to work injuries. However, in the event of immediate medical expenses before an individual receives their workers' compensation settlement, Medicare might pay first and initiate the Benefits Coordination & Recovery Center (BCRC) recovery process.
To avoid the recovery process and protect yourself, the Centers for Medicare & Medicaid Services (CMS) typically monitors the amount an individual receives from workers' compensation for their injury or illness-related medical care. In certain cases, Medicare may request a workers' compensation Medicare set-aside arrangement (WCMSA) to manage these funds. Medicare will only cover care after the WCMSA funds have been depleted.
What settlements have to be reported to Medicare?
Workers' compensation must submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of an individual's medical expenses. You'll need to submit a TPOC if you're currently enrolled in Medicare based on your age or Social Security Disability Insurance, and the settlement is $25,000 or more. If you're not yet enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more, you'll also need to report it.
Besides workers' comp, you must report to Medicare if you file a liability or no-fault insurance claim as well.
Frequently Asked Questions
Contact Medicare for any questions by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During specific hours, live chat is also available on Medicare.gov. For questions about the Medicare recovery process, you can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary. However, if you want to set one up, your workers' compensation settlement must be over $25,000 if you're already enrolled in Medicare, and over $250,000 if you're expected to join Medicare within 30 months.
It's prohibited to misuse the money in a Medicare set-aside arrangement. Doing so can result in claim denials and the necessity to repay Medicare.
Takeaway
Workers' compensation insures occupational injuries or illnesses for federal personnel and other categories of individuals. To avert issues regarding medical expenses, individuals enrolled in Medicare or about to join should educate themselves. Additionally, informing Medicare about workers' compensation agreements is crucial to prevent future claim rejections and reimbursement obligations.
For more resources to help navigate the complex world of medical insurance, visit our Medicare hub.
- Workers' compensation is an insurance plan that covers employees who suffer work-related injuries or illnesses, managed by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor.
- Medicare operates under the secondary payer policy, meaning it should only cover medical expenses for work-related injuries or illnesses after the workers' compensation insurance has covered them.
- To ensure Medicare covers the appropriate portion of an individual's medical expenses related to work-related injuries or illnesses, the Total Payment Obligation to the Claimant (TPOC) must be submitted to CMS if the settlement is $25,000 or more for individuals already enrolled in Medicare, or $250,000 or more for individuals expected to join Medicare within 30 months.
- Misusing funds from a Medicare set-aside arrangement, which is a voluntary arrangement to manage funds from workers' compensation, can result in claim denials and the necessity to repay Medicare.
