Our good friends over at MEDVAL have reported that the State of Maryland passed a new law that encourages insurers to use structured settlements or professional administration on Medicare Set-Asides (MSA). The new bill, signed by Governor Martin O’Malley on April 12, 2012, exempts the payer of certain workers compensation awards and settlements from paying, otherwise mandatory fees to the state. These fees amount to 6.5% to the state’s Subsequent Injury Fund (SIF) and 1% to the Uninsured Employer’s Fund (UIF). The new law exempts payment if the medical benefit is in excess of $50,000 and is paid out with an annuity or is professionally administered by a third party with no reversion to the claimant.
This is the first time that a government agency has recognized the value of professional administration and/or structured settlements of a MSA by offering financial incentives. Professional administration protects the MSA from the dissipation that so often occurs when an injured person self-administers the MSA which helps to preserve the claimant’s Medicare benefits. Structured settlement annuities also help to preserve the MSA funds by providing periodic payments to the claimant rather than one lump sum payment.