Medicare WC Set-Asides Fell in FY2024

A new report from the Centers for Medicare & Medicaid Services (CMS) shows that there were 14,862 workers’ compensation set-aside decisions in FY2024, down 5.5% from FY 2023’s 15,743 decisions.
A Workers’ Compensation Medicare Set Aside (WCMSA) is a financial agreement where a portion of a workers’ compensation settlement is set aside to cover future medical expenses related to the work injury, so that Medicare is not paying for treatment that should be covered by the settlement funds.
Total settlements amounted to $2.7 billion, with the average settlement amount of $157,487. The average WCMSA was $70,775 versus $70,887 in FY2023.
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AM Best has revised the outlooks to negative from stable for five companies that are part of Berkshire Hathaway’s GUARD Insurance group, but said the decline in underwriting performance was driven by business lines other than the group’s workers’ compensation business, which continues to perform solidly.
The firms are WestGUARD Insurance Company, AmGUARD Insurance Company, EastGUARD Insurance Company, NorGUARD Insurance Company and AZGUARD Insurance Company, which operate under an intercompany pooling agreement, the rating agency said.
The negative outlook reflects sharp deterioration in GUARD’s underwriting results that began in the 2023 calendar year and worsened in the first nine months of 2024.
GUARD’s significant underwriting losses in 2023 and 2024 included the impact of material reserve strengthening across several business lines, other than workers’ compensation.
AM Best noted that over the past 18 months, GUARD has established an almost entirely new senior leadership team that is tasked with restoring its operating performance to the previously adequate levels.
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Canada’s Prince Edward Island is rolling out expanded workers’ compensation coverage for psychological injuries, specifically those caused by work-related harassment.
The Workers Compensation Board coverage begins on Jan. 1, 2025, with a dedicated Psychological Injuries team and resources aimed at supporting workers, employers, and healthcare providers.
“Expanding psychological injury coverage to include harm caused by workplace harassment is a critical step in supporting Island workers,” says Allison Wyatt, WCB’s director of claims and compensation. “This change demonstrates our commitment to addressing the mental health needs of the workforce and providing holistic recovery options.”
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