STRUCTURING MEDICARE SET-ASIDES
What is a MSA Structured Settlement?
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Recognized and encouraged by IRS since mid-1970's and Approved by Medicare for Medical Set Aside Funding
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Pays benefits over time rather than a lump sum today.
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Designed to Match Medical set Aside Claimant Needs.
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Reduces Liability Holder's MSA cost by 20 to 50%
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Provides claimants with a secure, predictable tax-free income to pay Medicare reimbursable expenses.
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Is a claims resolution to0l beneficial to all stakeholders.
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Enhances best case outcomes in negotiated settlements.
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Preserves assets for future medical payments.
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Basic Components of a structure
Preiodic Income - Weekly, Monthly or Annually
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Pays periodic payments into Medicare Set Aside Medical expense trust accounts
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Pays Non Reimbursable Medicare medical expenses
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Pays wage replacement income (for as long as lifetime)
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Pays Survivorship payments to spouses and children
Lump Sum Payments
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Wage settlements can include lump sum payments for:
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College tuition
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Home Mortgage payments
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Retirement supplement (no age distribution restrictions)
Attorney Fees
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Attorney Fees can structure Periodically or Lump Sum
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When to Structure a msa
Consider structuring the MSA whenever these conditions exist:
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When your MSA value exceeds $30,000 or more And... Your claimant is expected to live at least 10 years.
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Your claimant's life expectancy is reduced by poor health conditions.
Also Consider Structures on Indemnity Claims:
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Survivorship Claims - Replacing spouse or Children Income.
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Any Severe Injuries with shortened life expectancy.
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Minor or Mentally Incompetent person
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Claimants with limited investment or financial skills.
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Plaintiff demand and offer are FAR apart.
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Structure Attorney Fees on Workers Compensation claim are Tax Deferred!
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Advantages of funding MSA's with Periodic payments (structures)
CMS will approve a payout amount for services that would otherwise be reimbursable by Medicare from the Medicare Set-Aside Arrangement in a STRUCTURED format:
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Cash to SEED the MSA with Annual annuity payments.
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Approved by Medicare
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Saves Liability Holder 20% to 50% off the MSA - Average savings from Lump Sum is 46%
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Individual Trust Accounts are available. No Pooled Assets means Claimant knows exactly how much they have.
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Guaranteed Payments from A rated Life Insurance Companies means the money will ALWAYS be there.
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Helps protect the injured worker from improperly dissipating MSA funds.
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Tax Free Payments under IRS Code: 104(a)1
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Structuring is the MOST cost efficient method:
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Frees up scarce settlement authority to address other needs; i.e. Indemnity and Non-Reimbursable medical.
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Medicare Agrees to cover any shortfalls in Annual Funding until next annuity payment is deposited.
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Hathaway Settlements office obtains the most cost effective annuity products at the best possible rates.