Workers’ Compensation Medicare Set Aside Arrangements

A Workers’ Compensation Medicare Set-Aside (WCMSA) allocates a portion of the Workers’ Compensation (WC) settlement for all future work-injury-related medical expenses that are covered and otherwise reimbursable by Medicare.

The goal of establishing a WCMSA is to estimate, as accurately as possible, the total cost that will be incurred for all medical expenses otherwise reimbursable by Medicare for work-related conditions during the course of the beneficiary’s life, and to set aside sufficient funds from the settlement, judgment, or award to cover that cost. WCMSAs may be funded by a lump sum or may be structured, with a fixed amount of funds paid each year for a fixed number of years, often using an annuity.

Information for Insurers/Self-Insureds regarding WCMSAs

While there are no statutory or regulatory provisions requiring that a WCMSA proposal be submitted to CMS for review, submission of a WCMSA proposal is a recommended process.  CMS will review a proposed WCMSA amount when the following workload review thresholds are met:

A claimant has a reasonable expectation of Medicare enrollment within 30 months if any of the following apply:

If a threshold is met, a WCMSA can be submitted to CMS for approval.
These thresholds are created based on CMS’ workload, and are not intended to indicate that parties may settle below the threshold with impunity. All parties in a workers’ compensation case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving cases that include future medical expenses.  
Insurers/Self-insureds should regularly monitor the CMS website at for changes to these thresholds and for other changes in policies and procedures.

Additional information for employees, employers, adjusters, attorneys, insurers/self-insureds, and WCMSA vendors can be found in the WCMSA Reference Guide on the CMS website.