What Is a Medicare Set-Aside Agreement (MSA)?

A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) is an agreement that guarantees your workers’ comp insurance will pay its share of medical costs before Medicare pays. Workers’ compensation — sometimes called workers’ comp — is an insurance arrangement that covers your medical expenses if you are injured or become sick directly because of your job. Employers are required to pay for workers’ compensation insurance to cover your medical costs in the event of injury or illness.

Workers’ comp benefits can vary from state to state.

In the case of a Medicare set-aside arrangement, workers’ comp is the primary payer and Medicare is the secondary payer — meaning Medicare pays only after workers’ compensation has paid its share of your medical care for the work-related injury or illness.

A Workers’ Compensation Medicare Set-Aside Agreement is established after a settlement is reached in a workers’ comp or personal injury liability case.

The amount of money agreed to in the settlement is put into a special account called a Medicare Set- Aside Account, or MSA account. The money is used for the future medical bills related to your injury or illness.

If you don’t follow the rules for how you can use your MSA account funds, you could be required to pay back the misspent money, or you could lose Medicare benefits that cover your work-related injury or illness.

The WCMSA and your MSA account set the stage for coordination of benefits between workers’ comp and Medicare to ensure each pays the proper amount.

Medicare does not pay for medical services incurred from a job-related injury or illness until you spend all the money in the applicable MSA account.

If you have a workers’ compensation case, it may involve either past or future medical expenses or it could involve both. Having Medicare review and approve a proposal for a set-aside can give you an accurate understanding of how much you will from your MSA account before Medicare starts paying for medical care.

To apply for a set-aside with Medicare, you must meet certain requirements and then you must submit a proposal. You should discuss with your workers’ compensation attorney how and when to submit your proposal.

Medicare does recommend filing a WCMSA proposal even if you have other health coverage through private health insurance, the Veterans Administration or a Medicare Advantage plan. Your MSA account usually has to be exhausted before the other coverage kicks in.