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Even After Death, MSA Must Still Be Funded

December 13th, 2013

Today’s blog post comes straight out of the North Carolina Court of Appeals (hat tip to KC).  No, it doesn’t have any control over our lives, but it serves as a cautionary tale for us here in the workers’ paradise of California.

Here’s the skinny – parties agree to resolve a workers’ comp case and the settlement terms include the conditions for setting up the Medicare Set-Aside, including some seed money.  Well, before payment is made, the injured worker unfortunately passes away.

No dispute is raised about the various benefits promised as part of the agreement, except, of course, the MSA.  After all, the MSA isn’t just bonus money, but funds to pay for future medical treatment to avoid shifting the responsibility of the employer/insurer onto the federal government.  9 out of 10 doctors agree that most medical treatment is ineffective when applied to the deceased, and the fee schedule specifically excludes psychics, resurrections, and various poltergeists.

So, a defendant in this case would express condolences to the widow or widower and apply those previously-earmarked MSA funds to another project or case.

Well, not so fast!

The Court of Appeals in North Carolina, in reviewing the case of Carolyn G. Holmes (widow)  v. Solon Automated Services, the defendant, as part of the settlement agreement, promised to fund an MSA with $19,582.37 seed money and payments of about $9,200 annually for 18 years, only if the applicant was still living.

The Court of Appeals held that the annuity was self-negating as per the terms of the settlement.  Mr. Holmes failed to live even a year after the mediation that resulted in the settlement agreement, and therefore the yearly payments of about $9,200 were not an obligation upon the defense.

However, the seed money was owed to the applicant from day 1, and so was ordered pay it.

So, we’re back to this issue, which has been touched upon before just this week.  The money for medical treatment isn’t really for medical treatment, it’s just money.

So, again, perhaps language should be inserted to document an understanding of what will happen in the event of the injured worker’s death at any point – and also confirming that the funds set aside for medical treatment are only being provided in anticipation of medical treatment, and that death severs this obligation.

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