Medicare Set-Aside Allocation

Medicare Set-aside Allocations & Trusts

A Medicare Set-Aside Allocation (MSA) is a predetermined amount of money set aside from the settlement of a worker’s compensation case. It is typically held in a trust and used to cover projected lifetime medical costs covered by Medicare. An MSA can be funded either by a lump-sum payment or by a combination of cash and a structured settlement annuity.

An MSA is mandatory in any worker’s compensation case that follows one of these criteria:

  1. The settlement involves an injured party that is already a Medicare beneficiary, regardless of the settlement amount.

  2. The injured party must have reasonable expectation of becoming a Medicare recipient within the next 30 months and the total settlement amount is greater than $250,000.

A reasonable expectation for someone becoming a Medicare recipient includes having applied for or been approved for Social Security Disability Income benefits, having been denied and are appealing the decision, having end-stage renal disease but do not yet qualify for Medicare, or are 62 ½ years of age.

Estimating the amount of money needed to fund the MSA and the other details associated with establishing the trust can be complicated and confusing. Please contact our associates if you would like to explore your family’s options for an MSA.