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The Social Security Administration's proposal that workers compensation benefits be reported annually to the agency would increase insurers' and employers' paperwork and costs.
“There is a potential here of an extra burden … and potentially extra costs for employers and carriers around the country,” said Rafael Gonzalez, Tampa, Florida-based vice president of strategic solutions at Helios Settlement Solutions, a unit of pharmacy benefit manager Helios.
The requirement likely would be similar to reporting rules implemented by the Centers for Medicare and Medicaid Services in 2009, said Brad Peterson, a shareholder at law firm Heyl, Royster, Voelker & Allen P.C. in Urbana, Illinois.
“It would require insurers or others covered under this proposed rule to determine the Social Security status of a particular workers compensation claimant. So it would certainly add a burden in that regard,” Mr. Peterson said.
The mandate is a single paragraph in the Social Security Administration's proposed fiscal 2016 budget published in February. The administration says it would require “states, local governments and private insurers that administer” workers comp and public disability benefits to report data on those benefits to the administration.
The proposal also would “provide for the development and implementation of a system to collect such information from states, local governments and insurers.”
Onus on employers, insurers
The Social Security Administration now requires workers to disclose comp benefits they receive when applying for Social Security disability. Claimants who receive benefits from both programs typically are permanently disabled because of an occupational injury, Mr. Gonzalez said.
In most states, workers comp benefits reduce the amount of Social Security disability a claimant can receive, Mr. Gonzalez said. Thirteen states allow injured workers to collect full Social Security disability while offsetting their workers comp benefits.
People who fail to report comp benefits to Social Security risk being charged with having to repay Social Security benefits or fraud, he said. While the proposal does not speak to the individual requirement, the Social Security Administration likely expects insurers and employers to be more accurate in their reporting, he said.
“Who's in the best position to give (Social Security) the most accurate information about this claim? Hands down, it's the employer/carrier,” he said.
Experts say the proposal echoes Medicare Secondary Payer rules used by CMS, which requires insurers and self-insured employers to report workers comp benefits to that agency. It helps determine whether a claimant must repay Medicare for medical care that should have been paid by a comp policy or whether payers should set aside money to pay for future medical care related to an occupational injury.
Mr. Gonzalez said employers and workers comp insurers may not have trouble complying with the Social Security Administration's proposal if the agency seeks the same information as CMS, such as the claimant's name, gender, birth date, Social Security number and the date of the work accident.
However, additional reporting requirements could be cumbersome for many workers comp payers, he said.
Similar to Medicare reporting, Mr. Peterson said he expects the Social Security Administration to add penalties for employers and insurance that fail to provide workers comp data.
“I would expect that they would definitely attempt to put some teeth into this with some form of penalty,” he said.
While the Social Security Administration proposal includes no timeline for implementation, Mr. Peterson said he believes it would take at least 12 to 18 months for the agency to finalize its plan.
A worker who used his workers compensation settlement and Medicare set-aside account funds to buy real estate and a new truck will not have to include those items as assets under his Chapter 7 bankruptcy proceedings, a federal bankruptcy judge ruled this week.