What You Need to Know About Medicare Set-Asides (MSA) in California Workers' Comp Settlements
A HELPFUL GUIDE AND NOT LEGAL ADVICE.
When you're hurt at work in California and your case is ready to settle, you might hear your lawyer or the insurance company mention something called a Medicare Set-Aside, or MSA.
It might sound complicated, but it's actually a very important part of making sure your medical care is protected after your case closes. Here's what it means, why it matters, and how it affects your settlement.
Understanding the Basics
What Is a Medicare Set-Aside?
A Medicare Set-Aside is money set aside from your workers' comp settlement to pay for future medical treatment related to your work injury.
This happens because Medicare is not supposed to pay for treatment that workers' compensation is responsible for. The MSA makes sure the right amount of money is saved for your future medical needs before Medicare starts paying.
Once that money is used up properly, Medicare can then cover related medical care if you're eligible.
Why It's Important
Federal law says Medicare is a "secondary payer." That means Medicare only pays after other insurance — like workers' comp — has paid what it owes.
So, when you settle your case with a Compromise and Release (C&R) — which closes out all future medical care — you need to make sure Medicare's interests are protected.
Without an MSA
Medicare could later refuse to pay for treatment related to your work injury. You could be stuck with those bills yourself.
With an MSA
An MSA helps prevent that from happening. It shows Medicare that your settlement includes enough money to take care of your future injury-related treatment costs.
When a Medicare Set-Aside Is Needed
Not everyone needs an MSA. It mainly comes up if:
1
You're already on Medicare or Social Security Disability. Medicare
2
You're eligible for Medicare
(example, if you are within 30 months of your 65th Birthday)
If either of those apply, the insurance company or your attorney will usually have an expert calculate how much money should be set aside for your future medical care.
How the Amount Is Calculated
The amount that goes into your MSA depends on your expected future medical needs.
An expert reviews your medical records, your doctor's reports, and the kind of treatment you've been getting to estimate how much it's likely to cost over your lifetime for your injury-related care.

That total becomes your Medicare Set-Aside amount — the portion of your settlement that's meant to cover those future medical expenses.
Why It Matters in a Compromise and Release Settlement
A Compromise and Release (C&R) is when you settle your workers' comp case for a lump sum payment that closes everything — including future medical care.
01
You give up future treatment rights
Because you're giving up the right to have workers' comp pay for your future treatment, the government wants to make sure you still have enough money to take care of those medical needs before Medicare steps in.
02
The MSA protects you
The MSA is what makes that possible. It protects your settlement and keeps you in compliance with federal rules so there are no surprises later.
Getting Help
MSAs can be confusing — and every case is different. The good news is, you don't have to figure it out alone.
Your workers' compensation attorney will guide you through the process, make sure the MSA is calculated correctly, and help protect your rights before you sign any settlement papers.
It's important to ask questions and make sure you understand how your medical care will be handled after your case is closed.
The Bottom Line
A Medicare Set-Aside is there to protect you and your future medical treatment after your workers' comp case settles.
It's not just a formality — it's an important step to make sure Medicare continues to cover your care the right way, and that you're not left paying out of pocket for treatment related to your injury.
Before you settle your case, talk to your attorney about whether an MSA is needed, how much should be set aside, and how it will affect your settlement amount.
With the right guidance, you can settle your case confidently — knowing both your finances and your medical care are protected for the future.
More Information from the California DWC
A HELPFUL GUIDE AND NOT LEGAL ADVICE.