Elder Law Attorney Julian Gray Discusses Medicare Set-Aside Agreements in Liability Cases

Lawyers who handle workers’ compensation cases are probably familiar with Medicare set-aside (MSA) agreements. However, the use of set-asides is expanding to involve liability cases as well. In this report, elder law attorney Julian Gray of Julian Gray Associates discusses the use of set-aside agreements and how the use of set-asides is expanding. [Note: this 2015 Legal Broadcast Network report also discusses Medicare set-asides in liability cases.]

Gray explains that the use of Medicare set-asides is a response to the Medicare secondary payer act of 1980. The act was aimed at workers’ compensation claims where Medicare would at some point become a person’s primary health insurer. The idea was to shift costs from Medicare to other payment sources. Initially, at least, things were fairly clear cut. Workers’ compensation cases were the ones where set-aside agreements would be required.

Julian Gray

Julian Gray

Now, says Gray, Medicare is suggesting that it will look past the workers’ compensation field to other areas. Cases involving motor vehicle accidents and medical malpractice are probably the likeliest targets for Medicare, Gray says. The Centers for Medicare & Medicaid Services (CMS) are looking at liability cases, and insurance companies who will be paying for substantial verdicts or settlements “are getting a little nervous” about the possibility of monetary penalties and possible liability of people involved in a case, including counsel on both sides. The possibility that Medicare would deny coverage for future care is also in the background. The result is that parties are now beginning to think of what Medicare’s interest would be in the future. Gray says that no one presently knows what new rules from CMS might look like when they are issued, probably later in 2017. As a result, people involved in liability settlements are looking at the rules in workers’ compensation cases as a guide.

The big questions to be answered are how much money should be set aside and how to fund the account. Gray explains that there are resources available to plaintiffs’ attorneys whose expertise is in determining future medical costs. These experts can analyze the injuries in a particular case with an eye to future care that will be required, including medication costs, and suggest an amount of money that might be required given a particular plaintiff’s life expectancy. These numbers provide a basis for deciding how much set-aside funding will be needed.

Funding the Medicare set-aside requires some attention from plaintiffs’ attorneys, Gray says. In worker’s compensation cases, set-asides were typically funded by cash from the settlement or by a structured settlement annuity. However, there are presently no guidelines as to how to fund a liability MSA. Gray suggests that anyone trying to decide how to fund an MSA consider a variety of possibilities beyond the two traditional approaches. It makes sense for the lawyer for an injured party to involve an attorney knowledgeable in the MSA funding field at an early point so as to make sure that all the possible issues that might arise down the line are dealt with before the settlement plan is finalized.

Gray also suggests that people involved in liability cases should consider possible alternatives to Medicare as an insurance source for an injured party. Private insurance can be purchased, including through the Affordable Care Act or its successor, whenever such a law is enacted. Medicaid benefits might also be an option. There are ways to opt out of Medicare, and that is an option that should be kept in mind.

Julian is the founder of Julian Gray Associates in greater Pittsburgh, Pennsylvania.  He is a board member of the Special Needs Alliance (SNA), a national nonprofit committed to assisting individuals with disabilities, their families and the professionals who serve them. He is one of only a few attorneys in all of western Pennsylvania to be Certified as an Elder Law Attorney by the National Elder Law Foundation. He has provided assistance to a variety of clients and their families for over twenty years in the areas of Medicaid planning, veterans' benefits, and related estate planning and tax issues. He is a lifelong resident of Pennsylvania. He received his bachelor's degree from Penn State University and his law degree from Duquesne University School of Law. The Settlement Channel is a featured network of Sequence Media Group.

Posted on April 24, 2017 .

NSSTA President Jim Early of Ringler Associates Discusses the Future of the Structured Settlement Profession

Structured settlements haven’t been around forever. In their present form, they are a relatively new addition to the world of torts. Jim Early, newly-installed president of the National Structured Settlements Trade Association (NSSTA) and Senior Advisor to Ringler Associates, explains the development of structured settlements and discusses what the future may hold in this report.

Early explains that the structured settlement, in its present form, comes from the settlement of Thalidomide cases in Canada. Thalidomide was given to pregnant mothers, and many gave birth to children with serious birth defects. Today, structured settlements are routinely used “to protect injured parties from premature dissipation of settlement funds.”

Jim Early

Jim Early

As to the future, Early says that the primary challenge for NSTTA is to protect the sections of the Internal Revenue Code that apply to structured settlements, especially §§104 and 130. One thing that helps, Early explains, is that the NSSTA has no political enemies on the left or on the right. There is a structured settlement caucus in Congress with members from both sides of the aisle who all see the value of structured settlements. The only real danger Early sees is that sweeping tax reform could sweep up §§104 and 130 for change.

As to a challenge for the future, Early says that NSSTA members “need to become settlement planners rather than annuity brokers.” Now more than ever, there are a host of factors that must be considered in planning the best settlement for an injured victim. For example, a settlement might require a special needs trust. All of the relevant factors need to be considered.

Another challenge for NSSTA members will be to protect injury victims from abuses in factoring (the purchase of a structured settlement payment stream for a lump sum that may be dissipated improvidently). Early points out that there are now structured settlement protection acts in forty-nine states.

The toughest challenge for the NSSTA will be to deal with an aging structured settlement work force. Early says that it is important to attract some younger people into the structured settlement profession.

Early believes that the future is bright for the structured settlement profession. Early is pleased that all participants in the process are now encouraged to have someone participate on their behalf to bring increased professionalism to the process. Also, the emphasis is increasingly on preserving capital and avoiding risk in planning the investments of the settlement proceeds. Structured settlement professionals “bring certainty and security to the process.”

Early says that dealing with his duties with NSSTA is not a challenge because he is now in an advisory capacity with Ringler Associates. He looks forward to working on the challenges ahead.

James M. Early is a Senior Advisor to Ringler Associates, assisting in strategic business partnerships and collaborating with Ringler’s 150-plus Consultants nationwide. He is also the President of the National Structured Settlement Trade Association (NSSTA). He has been with Ringler since January 2002. He has spent more than 40 years in insurance and settlement planning, providing structures in thousands of cases since 1985. The Settlement Channel is a featured network of Sequence Media Group.

Posted on April 7, 2017 .

Ringler Associates President Geoff Hunt Talks about the Acquisition of Galaher Settlements

Ringler Associates has acquired Galaher Settlements, as The Settlement Channel reported in January 2017. Ringler’s president, Geoff Hunt, discusses the acquisition of Galaher and what he sees in the future for the structured settlement profession in this report.

Geoffrey E. Hunt

Geoffrey E. Hunt

Although Ringler was already the country’s largest structured settlement company at the time it acquired Galaher, the move made sense, says Hunt. The structured settlement industry is “ripe for some consolidation.” A larger company is better able to reinvest in the business. Ringler went looking for a quality company that would benefit from joining Ringler. Galaher had excellent information technology in its business. Also, adding Galaher provided an opportunity to have relationships with the larger CPA firms in the country. Hunt does not believe that the Galaher acquisition will have much effect on the structured settlement marketplace. Customers should not see much change.

One change that is visible on Ringler’s website is a new look associated with rebranding. Hunt explains that the rebranding was driven by consultants who worked with Ringler. The view was that Ringler needed to rethink its branding, looking ahead to a new approach to its business. Ringler is “moving from the broker of a product to a consultant for settlement solutions.”

On a personal note, Hunt says that things have gone very well in the two years since he joined Ringler. As for Ringler’s future, it is investing in training and development to move employees from brokers to settlement consultants. Ringler also has a number of strategic partners, and those relationships allow Ringler to bring more products and services to the table when consulting with an injured party. Ringler is also moving to attract more young and diverse talent into its team of consultants.

Hunt says that one challenge for Ringler and its consultants is to get past the notion that they are selling an interest rate product. There is a continuing challenge to educate everyone, including the plaintiffs’ bar, about what structured settlement consultants can do for their clients. It is also important for Ringler not only to maintain sound enterprise management, but also to make sure that the plaintiffs’ bar understands that Ringler is a solid company to deal with.

Geoffrey E. Hunt serves as the President and CEO of Ringler Associates, chosen unanimously by the Board of Directors. His experience in finance, management and the insurance industry spans over 30 years. His experience includes time spent with Deloitte, Liberty Mutual, and Narragansett Bay Insurance Co., which he co-founded. The Settlement Channel is a featured network of Sequence Media Group.

Posted on March 31, 2017 .