Interplay between Workers’ Compensation Benefits and the Affordable Care Act a/k/a ObamaCare
As many of you may know by now the Workers’ Compensation Act pays primarily two types of benefits (aside from death benefits, funeral benefits and specific loss benefits), it pays primarily medical benefits and lost wage benefits (a/k/a indemnity benefits). Please refer to my 2/18/14 blog regarding your rights to medical benefits and my 10/27/2014 blog with respect to your wage loss benefits.
The uncertainty of the application of the ObamaCare Act “hereinafter referred to as the “ACA” potentially impacts your rights after you settle your workers’ compensation case and for that matter can even have an impact in an ongoing way with regard to your workers’ compensation case. Before going into any more detail let me first be clear that there is no legal authority as the date of this article to clarify these issues.
Impact of ACA on future medical benefits after you settle your workers’ compensation case:
Normally when you settle your workers’ compensation claim (see blog), the insurance companies like to traditionally try to settle both your future lost wage benefits and your future medical benefits. So when you settle, let’s say a low back injury in 2015, and let’s say that you have the need for surgery in 2017 because it never really improved after you settled your workers’ compensation claim, will the ACA require you to pay for that surgery and related medical expense out of your medical expense out of your settlement? The answer at this time is unknown. The most recent seminar I have gone to on a National level has indicated that the legal opinions are mixed.
There are multiple provisions in the ACA that say that your prior medical condition cannot impact your right to receive healthcare benefits under the ACA. However, if the ACA begins to adopt some of the regulations that are contained in Medicare Regulations, will then require you to either reimburse ACA from your workers’ comp settlement or may not allow you to be eligible for future Medicare because of your having received a settlement for these injuries? Typically when you settle your workers’ compensation case and you are on Medicare you must notify Medicare and they will tell you how much you must set aside to pay for your future medical expenses before Medicare will begin to pay for any of your medical expenses. You must also then exhaust that Medicare set-aside amount that you were told to withhold, before any such future payments are made by Medicare. I’m not sure how the Federal authorities are going to handle a similar situation under the Affordable Care Act.
Again it must be stressed that as of the date of this article legal authorities are split on this issue. Some take the position that nothing in the ACA says that an injured worker shouldn’t be covered even if you received your workers’ compensation settlement. Other note that there is nothing in the ACA that says they will be covered because your receipt of workers’ compensation benefits is technically a monetary receipt and not a pre-existing condition. In other words there is a separation between the injury and the monetary recovery you made through your settlement. Being conservative in nature I would not want to take the chance the Affordable Care Act will cover this in the future. If you wish to discuss this in more detail please call and set up an appointment.
Impact of ObamaCare/Affordable Care Act on settlement of workers’ compensation cases with respect to future income calculations to determine the premiums for healthcare:
The ACA in part determines what your premiums will be (of course depending on what type of policy you pick) based on your income. So when you settle your workers’ compensation case and you hopefully had an attorney that did some level of apportionment between the settlement of your future wage loss benefits and the settlement of your future medical benefits, no one knows at this time how the ACA will treat that lump sum settlement. To put figures in an example, let’s say you settle your workers’ compensation case for $100,000.00. You allocate $25,000.00 for your future medical expenses and you allocate $75,000.00 for your future wage loss benefits. How will that $75,000.00 allocation for your future wage loss be treated by the ACA? Will that render you having to pay for your full premium for one year? 2 years? Will you still receive any type of tax credit because of that settlement? The answers to these are unknown. In my office what I try to do is try to take your allocation of future income and spread it out over the remainder of your entire life thereby minimizing any impact on either your Social Security Disability benefits in the future (if you ever have to take them) or on your rights to receive premium credits or reduced premiums for the ACA health insurance. Of course there is no interpretation of this issue and as referenced to in Issue 1 there is a split of opinion on what will happen. For more information please do not hesitate to contact my office and we can discuss this.