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Workers Compensation MSA funding. Lump sum VS. annuity?

Austin, TX |

I had recently asked about the potential settling of future lifetime medical benefits with the IC. I appreciate the responses received.

My question,
I will be relocating outside of the USA in the near future. Keeping this in mind, would it be best to negotiate the MSA being funded as a lump sum rather than an annuity? I realize this would be to the benefit of the IC, however I will have no need for the MSA if I am not residing within the USA, correct?

Any ideas as to whether or not the MSA should proceed according to the guidelines set forth by CMS/Medicare given the future circumstances?

I'm guessing to fund the MSA as a lump sum would save the IC roughly 25% - 50% over the value of an annuity.

Thank You.

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Attorney answers 3

Posted

Annuities are much cheaper than a lump sum. Why insurance companies like to buy them. However, what is in your best interest? Always a lump sum for a regular settlement or one including an MSA.If you want the money in a monthly installment, you could buy an annuity yourself and get a better deal. If you violate the terms of the MSA agreement (i.e. spend the money not on medicals), it is my understanding ( and the laws can ALWAYS change), that there is no criminal repercussions. What would happen is that you would have to repay the MSA account and use the money up before Medicare would pay for your future medical care.

Asker

Posted

Thank you very much for the response. I have a second claim of which there is VERY little value attached to it. I realize if it were to be settled there would have to be a MSA in place. Am I able to sign a release so as to be rid of it without going through a settlement process? Once again, I am leaving the USA and the claim would be of no use to me if not settled or released to the IC. Thank you

Daniel Edgar Tropp

Daniel Edgar Tropp

Posted

great points!

Michele Susan Lewane

Michele Susan Lewane

Posted

I doubt it. Each state has different rules. In Virginia, it is required by the Virginia Workers Compensation Commission to have Medicare's approval if an MSA is required. Also, insurance companies are personally liable if they settle a case without Medicare's approval. I would call the adjuster and see what she would be willing to settle for. Settle, then move and give her your change of address to amil the settlement check.

Asker

Posted

Excellent advice! Thank you very much.

Posted

Actually, you are completely wrong. An Annuity for 100K over your life expectancy might cost the IC about 70K. They pay an Annuity Company 70K, and the Annuity Company pays you 5K a year for 5-30 years.

We give free general concepts to be helpful, but you should give ALL your facts to a licensed Attorney in your state before you RELY upon any legal advice.

Asker

Posted

Ok, I understand the concept now. Is there a need for the MSA given the fact I will no longer reside within the USA?

Posted

The annuity will always cost the Insurance company less than the required lump sum amount. Why do you think they like to use them? To save money, of course.

This answer is intended as general information and not as specific legal advice. If you want to have a free consultation with me, please contact me through AVVO.

Asker

Posted

I appreciate your response however I am still looking for an answer pertaining to my living outside of the USA and the MSA requirement. ???

Daniel Edgar Tropp

Daniel Edgar Tropp

Posted

good points.

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