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Q: What if my MSA allocation only identifies a lump sum and does not include the MSA “Seed” and “Annual” Payments?

A: Simply request if from your MSA vendor. They usually provide it at no extra cost.

Q: What if I have already applied the rated age to my MSA allocation? Can I save additional monies by using a structured settlement to fund the MSA annual payments?

A: ABSOLUTELY! The rated age used in the MSA report reduced the numbers of life expectancy years, resulting in a somewhat lower lump sum MSA. However, the MSA cost can be reduced further by structuring it.

Q: Will CMS/Medicare allow the parties to structure the MSA?

A: Yes. If structuring the MSA, advise CMS (usually by way of your MSA vendor) that you will use a structure to fund it. Their approval letter will be issued with the following: 1) SEED amount, 2) ANNUAL amount, 3) Begin date for the ANNUAL amount and, 4) the numbers of years the ANNUAL payments should be made.

Q: How does the claimant use the MSA funds when the MSA is structured?

A: The CMS approval letter will state that once the MSA funds are used in accordance with their guidelines, Medicare will become primary – regardless if the MSA funds are funded in a lump sum or structured.

If the funds are structured, the claimant uses the MSA funds similar to how one uses his or her regular insurance that has a deductible: The claimant uses his MSA funds first, and once properly extinguished, Medicare becomes primary until the next structured ANNUAL payment is received.

Q: When structuring an MSA, how are the settlement monies disbursed?

A: Usually, as follows:
  • Cash Up Front Attorney Fees,
  • Cash Up Front to claimant (non-MSA monies),
  • Cash Up Front to claimant: MSA SEED monies payable to the claimant to self-administer, or payable to vendor to professionally administer,
  • Lump sum annuity cost/premium payable to the annuity company to generate the tax-free MSA ANNUAL payments payable to the claimant.

Q: Who will explain how the structured settlement works to fund the MSA to the settling parties?

A: We will. This is part of the services we provide.

Q: Are there any potential additional medical costs not covered in the MSA?

A: Yes. When applicable, these include: co-pays, deductibles, donut hole, Medicare Part B & D, transportation, attendant care, MSA administration costs, other. These items can be negotiated and structured as well.

Q: Can a structured settlement be used to negotiate and settle non-MSA portions of the claim such as indemnity, attendant care, transportation, etc.?

A: ABSOLUTELY! Contact us to discuss.

Q: What if the parties had reached a tentative settlement and CMS came back with a much larger approval figure resulting in the settlement not moving forward due to the higher cost?

A: Structure the MSA to reduce the cost and keep the revised settlement on track. If you have CMS figures approving only a lump sum, ask your MSA vendor for an estimate of your SEED and ANNUAL payments based on the CMS approval so we can run preliminary costs. Note that you may need to ask CMS for a revised approval letter stating the SEED and ANNUAL payments.

Q: What are some of the annuity companies that issue structured settlement annuities?

A: American General, Berkshire Hathaway, Liberty Mutual, MetLife, Mutual of Omaha, New York Life, Pacific Life, Prudential and USAA Life.

Have another question? Please contact us at 323-887-9200.