Compensation Award, All Yours? Pt. 2

A personal injury claim is paid out when you successfully prove your case for injuries or property damages suffered. Some claims require the injured person to go through appeals, settlement negotiations before finally resolving the case. Once the award or settlement for compensation is made with the insurance company or the defendant, is it all yours? Other individuals may have a claim to some of that money. This includes lawyers, doctors and government agencies. This article will discuss how much of your compensation award or settlement you get to keep.

It is important to understand what deductions may be made from your settlement or award on your personal injury claim. You surely do not want to surprised when deductions begin to appear.

Compensation Award Deductions

• Unpaid/ paid medical bills – during the claims process it is likely you require medical attention and will get medical bills thereafter. Part of your award will include medical bills that you paid out of your pocket or that are pending payment. This becomes an extra item on your award. If you paid your own medical bills you can keep the money. If your doctors agreed to postpone your payment until compensation is received the money goes to paying outstanding medical bills.
• Medicare or Medicaid set aside – under federal law Medicare will not pay for medical expenses that are covered under compensation. However, it may pay medical bills conditionally when there is a dispute about personal injury compensation liability. So, if you are eligible for Medicare, part of your payment will go to the government. You must pay Medicare for the conditional payments it made during your claims process. If your settlement includes money for future medical expenses, you need to make sure that Medicare’s financial interests are protected. This happens by putting part of the settlement funds in a Medicare Set Aside (MSA) account. This money will go to pay for future medical treatment related to your injury.