SETTLEMENT WHEN YOU ARE ON OR SOON TO BE ON MEDICARE
When a client or perspective client asks me their options when it comes to settling a Worker’s Compensation case, I typically tell them that there are primary ways to do so.
First, a settlement can be by a “Stipulation With Request For Award”. In that case, the goal of the settlement would be to arrive at a reasonable agreed-upon disability impairment percentage as well as an agreement for the provision of future medical care to be paid by the defendant employer or carrier. It would also be necessary to agree (since we are talking about a “settlement” which requires both sides to agree) to what parts of body or conditions would be covered under the provisions for future medical care. Such a stipulation provides typically for settlement to be paid in bi-weekly payments.
The second way to settle a case would be to agree to the level of impairment and then, in addition, agree on what amount of money the employer or carrier would pay to close or “buy out” your future medical care. This is known as a “Compromise and Release”. In this case the majority of cases are settled by the payment of one lump sum, although they can also be settled by way of an annuity which provides for future payments or a combination of both – part lump sum, part payments.
Clearly, the settlement in the second case (C&R) is higher than the first (Stipulation) as, depending on the level of impairment a certain sum of money will be assigned to said impairment the higher the amount of money attributable for same and in addition you would be receiving an additional amount to buy out your future medical care.
I typically tell people not to close their medical care, unless they have something to “catch” them – some other insurance or benefit that would pay for their MediCare and would essentially be a safety net should they accept money to buy out their future medical needs. That’s when MediCare comes in.
If you are already a MediCare beneficiary, or are likely to be such within a certain amount of time, I tell the vast majority of my clients that it is always beneficial to settle with a MediCare Set Aside (MSA).
If your case would require an MSA to be able to agree to a Compromise and Release, the defendant would pay a few thousand dollars or more (not out of your money) to typically have an independent company review your medical records to determine, over your lifetime, what the cost of your injury-related medical care would be on a MediCare cost basis. That, depending on that amount, an attorney experienced with MediCare Set Aside settlements in Workers’ Compensation would try to settle your case with enough money to fund your MediCare Set Aside, pay for your permanent disability impairment and still have money available to you “in pocket”, even after payment of your attorney fees.
In this manner, you get the best of both worlds, you are able to receive money to buy out your future medical under the worker’s compensation case, you are able to receive a lump sum (and/or annuity) that you wanted and you still have an entity that will cover your future medical care – with certain limitations and exceptions that would be too difficult to address herein as it would depend on the nature of the injuries as well as the specific medical needs of the injured worker.