STRUCTURING MEDICARE SET-ASIDES

What is a MSA Structured Settlement?

  • Recognized and encouraged by IRS since mid-1970's and Approved by Medicare for Medical Set Aside Funding

  • Pays benefits over time rather than a lump sum today.

  • Designed to Match Medical set Aside Claimant Needs.

  • Reduces Liability Holder's MSA cost by 20 to 50%

  • Provides claimants with a secure, predictable tax-free income to pay Medicare reimbursable expenses.

  • Is a claims resolution to0l beneficial to all stakeholders.

  • Enhances best case outcomes in negotiated settlements. 

  • Preserves assets for future medical payments.

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Basic Components of a structure

Preiodic Income - Weekly, Monthly or Annually

  • Pays periodic payments into Medicare Set Aside Medical expense trust accounts

  • Pays Non Reimbursable Medicare medical expenses

  • Pays wage replacement income (for as long as lifetime)

  • Pays Survivorship payments to spouses and children

Lump Sum Payments

  • Wage settlements can include lump sum payments for:

  • College tuition

  • Home Mortgage payments

  • Retirement supplement (no age distribution restrictions)

Attorney Fees

  • 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:

  • When your MSA value exceeds $30,000 or more And... Your claimant is expected to live at least 10 years.

  • Your claimant's life expectancy is reduced by poor health conditions.

Also Consider Structures on Indemnity Claims:

  • Survivorship Claims - Replacing spouse or Children Income.

  • Any Severe Injuries with shortened life expectancy. 

  • Minor or Mentally Incompetent person

  • Claimants with limited investment or financial skills.

  • Plaintiff demand and offer are FAR apart.

  • 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:

  • Cash to SEED the MSA with Annual annuity payments.

  • Approved by Medicare

  • Saves Liability Holder 20% to 50% off the MSA - Average savings from Lump Sum is 46%

  • Individual Trust Accounts are available. No Pooled Assets means Claimant knows exactly how much they have.

  • Guaranteed Payments from A rated Life Insurance Companies means the money will ALWAYS be there.

  • Helps protect the injured worker from improperly dissipating MSA funds.

  • Tax Free Payments under IRS Code: 104(a)1

  • Structuring is the MOST cost efficient method:

  • Frees up scarce settlement authority to address other needs; i.e. Indemnity and Non-Reimbursable medical.

  • Medicare Agrees to cover any shortfalls in Annual Funding until next annuity payment is deposited.

  • Hathaway Settlements office obtains the most cost effective annuity products at the best possible rates.