Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

What is a Structured MSA?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

A Structured MSA, or Structured Medicare Set Aside account is often the most cost efficient way to fund

According to the CMS  Workers Compensation MSA  (WCMSA) Reference GuideVersion 3.0, published October 10, 2019, a WCMSA can also be established as a structured arrangement, where payments are made to the account on a defined schedule to cover expenses projected for future years. In a structured WCMSA, an initial deposit is required to cover the first surgical procedure or replacement and two years of annual payments. The initial deposit (“seed money”) is followed by subsequent annual deposits (or a shorter time period if CMS agrees to such), based on the anniversary of the first deposit. If in any given coverage year the deposited funds are not exhausted (i.e., used up, spent), they are carried forward to the next period and added to the next annual deposit. The whole fund, including carry-forwards, must be exhausted before Medicare will pay primary for any WC injury-related medical expenses. If the fund is exhausted appropriately in a given annual period, Medicare will pay primary for further WC injury-related medical expenses during that period. In the next annual period, the replenished WCMSA funds again must be used, until the WCMSA amount is appropriately exhausted. 

The savings from using a Structured WCMSA is so great that it can finance the cost of professional MSA administration and still have money left over when compared to an all cash MSA.

Rated Age and WCMSA: CMS Clarifies Guidance on Rated Ages

by John Darer® CLU ChFC MSSC CeFT RSP CLTC

CMS issued a clarification of its May 14, 2010 memorandum concerning rated age language to be included in Workers Compensation Medicare Set Aside Proposals (WCMSA). 

Rated Ages and Structured Settlement Cost | How It Works 2024 (4structures.com)

A revised rated age certification is now required which states:

“Our organization certifies that all rated ages we have obtained and/or have knowledge of regarding this claimant, and generated at any time on or after the Date of Incident for the alleged accident/illness/injury/incident at issue, have been included as part of this submission of a proposed amount for a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) to the Centers for Medicare & Medicaid Services"

CMS will not accept the Rated Age unless the specific language above is included in the WCMSA proposal.

CMS reiterated that acceptable proof of Rated Age is demonstrated through the inclusion of independent rated ages on the letterhead of an insurance carrier OR settlement broker.

Copy of CMS Memorandum on WCMSA Rated Ages  dated June 8, 2010  Download CMS Clarifies 5-14 Memo WCMSA Rated Age 6-8-2010

The latest WCMSA Reference Guide provides information on rated ages or life expectancy in Sections 10.3 and 15.

A Structured WCMSA can save money over a cash MSA. A rated age enhances the savings if the payments are life contingent.

 

Last updated May 4, 2024