Medicare and Workers' Compensation: Key Points to Understand
Navigating Medicare and Workers' Compensation: Essential Knowledge for Federal Employees and Others
Managing your workers' compensation and Medicare benefits can be complicated, but it's crucial to stay informed to avoid any potential pitfalls. Here's what you need to know about navigating workers' comp and Medicare.
Workers' compensation is an essential insurance for employees who suffer injuries or illnesses directly related to their jobs. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor oversees this benefit, which applies to federal employees, their families, and certain other entities.
If you're enrolled in Medicare or are planning to soon, it's important to understand how your workers' comp benefits could affect Medicare's coverage of your medical claims. This will help you avoid any complications with medical costs for work-related injuries.
Workers' Comp Settlements and Medicare Coverage
Under Medicare's secondary payer policy, workers' compensation must serve as the primary payer for any treatment related to a work-related injury. However, if immediate medical expenses arise before you receive your workers' comp settlement, Medicare may pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To prevent a recovery process, the Centers for Medicare & Medicaid Services (CMS) tries to monitor the amount you receive from workers' comp for your injury- or illness-related medical care. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after all the money in the WCMSA has been exhausted.
What Settlements Need to Be Reported to Medicare?
Workers' comp must submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure proper coverage of your medical expenses. You must 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.
- You're not currently enrolled in Medicare but expect to within 30 months of the settlement date, and the settlement amount is $250,000 or more.
In addition to workers' comp, you must also report to Medicare if you file a liability or no-fault insurance claim.
Frequently Asked Questions
You can contact Medicare with any questions by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. If you have 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, but if you want to set one up, your workers' comp settlement must be over $25,000 if you're currently enrolled in Medicare or over $250,000 if you expect to be within 30 months.
It is prohibited to use the money in a Medicare set-aside arrangement for any purpose other than the one for which it is designated. Misusing the money can lead to claim denials and reimbursement obligations.
Resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Enrichment Insights
- As of April 4, 2025, Medicare requires workers' comp payers to report Medicare Set-Aside (MSA) amounts for all settlements involving Medicare beneficiaries, regardless of the settlement amount[1][2].
- Claimants must use MSA funds for related expenses before Medicare covers them[1][2][3].
- Reporting requirements and protection of Medicare's interests apply to claimants who expect to become Medicare beneficiaries within 30 months[1][2][3].
- Understanding the complex relationship between workers' compensation and Medicare is crucial for avoiding medical costs complications with work-related injuries.
- If a workers' compensation settlement is required, Medicare serves as the secondary payer for treatment related to work-related injuries, but may pay first if expenses arise before the settlement.
- Workers' comp is responsible for reporting settlements of $25,000 or more if the claimant is currently enrolled in Medicare, or $250,000 or more if the claimant expects to enroll within 30 months.
- Misusing funds in a Medicare set-aside arrangement for purposes other than its designated ones can lead to claim denials and reimbursement obligations.
