Funding Medicare Set-Aside Accounts
A Medicare Set-Aside (MSA) can be funded through one of two methods:
- Lump-Sum Payment: A one-time payment to fund the entire MSA.
- Structured Settlement: Initial deposit (often called "seed" money) followed by regular annual payments.
Since each method has different benefits, reference the Self-Admin Toolkit, v1.3, sec. 3 for detailed guidance on managing these options.
Benefits of Annuity-Funded MSA
Choosing a structured settlement to fund an MSA provides distinct advantages. For Medicare beneficiaries, if funds are depleted temporarily in any year, Medicare reimburses MSA-covered healthcare treatments. This information is covered further in the Self-Admin Toolkit, v1.3, sec. 11.
Managing and Storing MSA Funds
It is critical to keep MSA funds in an interest-bearing account that is separate from other personal accounts. It's recommended by CMS to store funds in an FDIC-insured account without low-balance fees, providing easy check access. For more details, see Self-Admin Toolkit, v1.3, sec. 2 and the WCMSA Reference Guide, v.3.1, sec 17.2.
Appropriate Use of MSA Funds
To avoid potential issues with Medicare denying treatment, it is essential to use MSA funds solely for Medicare-covered treatments related to the initial injury. For further information, refer to the Self-Admin Toolkit, v1.3, sec. 4.
Administering Your Medicare Set-Aside
MSAs can be self-administered (if permitted by state law) or managed by a professional administrator. CMS advises that injured parties consider using a professional administrator for added protection. More about this is discussed in the WCMSA Reference Guide, v.3.1, sec 10.6.
Protecting MSA Funds with Professional Administration
Professional administration, such as services offered by Ametros, can shield MSA accounts from direct garnishments often requested by states. This additional layer of protection is advantageous compared to self-administration, ensuring compliance and security. A professional administrator can significantly decrease garnishment risks.
For detailed procedures and further reading, please consult the WCMSA Reference Guide and the Self-Admin Toolkit sections as mentioned.
For any related questions or further advice on managing your MSA funds, consider reaching out to a professional administrator or consulting the provided resources.
