Undocumented Workers: What are the MSA Obligations?

PMSI has frequently been asked what the MSP obligations are when a settlement occurs and the claimant alleges that he/she does not have a SSN and/or is not a legal resident or citizen of the United States. Let’s examine the various scenarios and how to handle each one.

Claimant is in the U.S. illegally and does not have an SSN

Undocumented workers do not pay into the Social Security and Medicare system and therefore cannot receive SSDI or Medicare benefits. An MSA would not be necessary in this scenario. However, the parties settling the case should be absolutely certain that the claimant is in fact neither a legal resident nor a U.S. citizen or MSP liabilities may later attach.

Suggested methods to inquire as to the claimant’s residency status could include questioning the claimant during discovery as well as having the claimant sign a statement under oath that he/she does not have a SSN. Additionally, payers that enter into a settlement with undocumented workers should strongly consider including language in their settlement documents which demonstrates that Medicare’s interests were still considered despite the claimant’s undocumented status just in case.

Claimant is a legal resident of the U.S., but not a citizen

Legal residents of the U.S. (aka green card holders) do in fact pay into the Social Security and Medicare system just like citizens do and are assigned SSNs. Therefore, with enough work quarters, legal residents can become eligible for SSDI and Medicare benefits just like U.S. citizens. In addition, a legal resident of the U.S. can “buy into” Medicare at age 65 by paying a premium whether or not they have the required work quarters (this option is also available to U.S. citizens). Therefore, an MSA should be considered in settlements with legal residents just as they should with U.S. citizens.

PMSI is available for any complex or unique MSP compliance questions. Please feel free to e-mail us at asktheexperts@pmsisettlement.com for assistance.

Leave a Reply