Medicare set-asides pay for future medical expenses

A Medicare set-aside is an allocation for future medical expenses that would be covered by Medicare if private insurance were not available.

Under Medicare Second Payer laws, Medicare pays medical expenses only when all forms of private insurance are not available.

Therefore, when workers comp insurance is available and an injured worker is within 30 months of eligibility for Medicare enrollment, eligible for Social Security Disability Income, or meets other threshold criteria, the worker must set aside a portion of their medical settlement reached with workers comp insurers or self-insured employers.

The set-aside is to cover future medical expenses stemming from their workplace injuries so that Medicare is shielded from having to pay.

Currently, insurers typically charge employers about $2,500 for services that determine the portion of a claim settlement needed to satisfy required set-asides, said Kathy Murphy, safety and risk supervisor for the Legoland California theme park in Carlsbad, Calif.

But an attorney provides her with the same service for about $1,500, Ms. Murphy said.

The U.S. Centers for Medicare and Medicaid Services approves or rejects set-aside amounts to protect Medicare's financial interests. CMS is part of the U.S. Department of Health and Human Services.