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.