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Utilizing the Affordable Care Act in the Settlement Process
By Steven Chapman and Gregg Chapman, Esq.

The implementation of the Affordable Care Act (ACA), also known as Obamacare, has raised many questions regarding how it might be used in conjunction with workers’ compensation settlements.

The implementation of the Affordable Care Act (ACA), also known as Obamacare, has raised many questions regarding how it might be used in conjunction with workers’ compensation (WC) settlements. There are situations where it could be used as a tool that will help procure a settlement. However, it is not a panacea and there are several situations where it cannot be used or it would be unwise to incorporate into a settlement.

The eligibility requirements for the ACA are the first thing that must be considered to determine whether it can be used in your case. Most importantly, an applicant that has Medicare or Medi-Cal is not eligible for the ACA. Additionally, to enroll in a Qualified Health Plan (QHP), the applicant must be a U.S. citizen, a national or “lawfully present” in this country. Therefore, an early determination of the applicant’s health care status will provide the information as to what options are available.

The question often asked is whether an ACA policy can be used instead of a Medicare Set-Aside (MSA). As indicated above, those applicants that are already Medicare eligible cannot obtain an ACA health plan. For those applicants who are not yet on Medicare, CMS provided the following guidance to this question in its July 11, 2005 Memorandum: “In a WC settlement, is a MSA recommended where the claimant is covered under a Group Health Plan (GHP), or a managed care plan, or has coverage through the Veterans’ Administration?” CMS answered this question as follows: “Yes, a MSA is still appropriate because such other health insurance or health service could in the future be canceled or reduced, or the injured individual may elect not to take advantage of such services. It is important to remember that workers’ compensation is always primary to Medicare and many other types of health insurance coverage for expenses related to the WC claim or settlement.” While the ACA was not specifically mentioned in this 2005 memo, the inference can be made that since the applicant can cancel their ACA health plan at any time, CMS would not accept that plan as a substitute for a MSA.

When contemplating an ACA health plan to cover the future medical expenses of the workers’ compensation settlement, it is important to review the policy options. The different plan levels: bronze, silver, gold and platinum offer different out-of–pocket maximums, co-pays and deductibles. The Covered California web site provides the details.

A thorough review of the future medical care needed by the applicant is necessary to select the appropriate ACA policy. A review of the medical records is important. If substantial medical care has been denied due to UR and IMR, a determination of what the necessary care is, must be made. Use of a life care plan, home care analysis and an independent nurse case manager assessment are good tools to help determine the future care required. Once this is determined, find the ACA policy that matches the applicant’s needs and makes the most financial sense (i.e. co-pays and deductibles). Finally, determine if there are medical needs that are not covered by the ACA policy. A cost will have to be assigned to this that will need to be included in a settlement demand.

There are additional concerns and considerations that must be taken into account when deciding whether to use an ACA policy to cover the future medical care of the WC settlements:

• Enrollment for ACA policies is only available at specific time frames.

• Coverage could shift in the future. What is covered under a gold plan today might not be covered at a later date.

• The premium for a policy can change. The cost for a gold plan today could very well be higher in the future.

• The ACA could be altered or potentially dismantled in the future by legislation.

• As pre-existing conditions cannot be excluded under the ACA, is there any reason that the injured worker could not C & R her case and continue to obtain care under her private policy?

Many questions regarding the ACA are still unanswered since it has just been implemented. As discussed there are situations where the ACA cannot be used in a WC settlement as well as cases where it could make good sense. Keep up with the latest changes and complete your due diligence on these options. Contact you Structure Settlement Broker to assist in determining the present value cost of future medical needs of the applicant.

Steven F. Chapman & Gregg Chapman, Esq
National Settlement Consultants
12039 Jefferson Blvd.
Culver City, CA 90230
Phone: 800-845-2969
Fax: 310-450-3132
Cell: 310-480-5742
Email: SettleMan@aol.com or greggchap@aol.com

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