Let’s say you won your Iowa workers’ compensation case and the decision awarded you a lifetime of weekly benefits. This is known as a permanent total award. Widows and widowers get lifetime benefits so long as they don’t remarry. Remarriage creates other issues but today is not the day to discuss those issues. If you want me to talk about remarriage issues, write to me and I will consider adding a blog. Back to permanent total awards for today.
What these awards mean is a check comes to you or your lawyer every week, 52 weeks per year as long as you are alive. But there is another way besides just a check a week. The law allows you to be paid in one check and that check will be equal to the amount of the sum total of all your benefits discounted by using a reasonable interest rate. What you need to know is the interest rate used either reduces or increases the lump sum amount. A high interest rate will lower your lump sum amount, while a low interest rate increases the amount you will receive. Over time the interest rates change and so will what you receive if you lump sum the award.
Right now interest rates are low, but when they start to rise you will get less and less. Which means you need to do something now, not two years from now because two years turns into four or six and that spells trouble for you.
So here is what I suggest you do. Call us if you want the Lombardi Law Firm to file the necessary paperwork to get you a lump sum.
Because as interest rates rise the amount you will receive gets less and less. And if you die it’s game over, but again.... that's a whole other can of worms for another day.
§ 411.46 Lump-sum payments.
(a) Lump-sum commutation of future benefits. If a lump-sum compensation award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment.
(1) A lump-sum compromise settlement is deemed to be a workers' compensation payment for Medicare purposes, even if the settlement agreement stipulates that there is no liability under the workers' compensation law or plan.
(2) If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers' compensation by releasing the workers' compensation carrier from liability for medical expenses for a particular condition even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition.
(c) Lump-sum compromise settlement: Effect on services furnished before the date of settlement. Medicare pays for medical expenses incurred before the lump-sum compromise settlement only to the extent specified in § 411.47.
(1) Basic rule. Except as specified in paragraph (d)(2) of this section, if a lump-sum compromise settlement forecloses the possibility of future payment of workers' compensation benefits, medical expenses incurred after the date of the settlement are payable under Medicare.
(2) Exception. If the settlement agreement allocates certain amounts for specific future medical services, Medicare does not pay for those services until medical expenses related to the injury or disease equal the amount of the lump-sum settlement allocated to future medical expenses.