• Social Security Administration Proposes Mandatory Reporting of Workers' Compensation Benefits
  • May 13, 2015 | Author: Bradford Peterson
  • Law Firm: Heyl, Royster, Voelker & Allen Professional Corporation - Urbana Office
  • The Social Security Administration has published its proposed 2016 budget, which also includes as an appendix, several legislative proposals. The legislative agenda includes a proposal that would require states, local governments and private insurers to report to the Social Security Administration workers' compensation benefits that would affect the offset of social security disability benefits. The proposal states:

    Current law requires SSA to reduce an individual's Disability Insurance (DI) benefit if he or she receives workers' compensation (WC) or public disability benefits (PDB). SSA currently relies upon beneficiaries to report when they receive these benefits. This proposal would improve program integrity by requiring states, local governments, and private insurers that administered WC and PDB to provide this information to SSA. Furthermore, this proposal would provide for the development and implementation of a system to collect such information from states, local governments and insurers.

    FY 2016 Budget Overview, Appendix A - Legislative Proposals - Summaries, p. 22-23.

    When social security disability recipients also receive workers' compensation benefits, the Social Security Administration is entitled to offset those benefits pursuant to the Social Security Act, 42 U.S.C. §424a. Generally, the Social Security Act requires that the total amount of social security disability and workers' compensation or public disability benefits be reduced by an amount necessary to insure that the sum of the benefits does not exceed 80 percent of the individuals pre-disability average current earnings. 42 U.S.C. §424a(a)(5).

    Currently, the Social Security Administration does not have a means to independently determine whether a disability beneficiary is also receiving workers' compensation benefits or governmental disability benefits. The Social Security Administration relies upon the beneficiary to report when they are receiving such benefits. The potential for fraud or underreporting is very apparent.

    The proposal would call for the creation of a system for governments and insurers to report the nature and amount of the benefit received by the social security disability beneficiary. The proposal does not address the issue of how the insurers or governmental entities are to determine whether the claimant is, in fact, a social security disability beneficiary.

    This proposal is substantially similar in principle to the MMSEA §111 mandatory reporting requirement for reporting benefits and settlements to Medicare. While the goal of reducing fraud is certainly meritorious, the proposal will shift the burden of reporting workers' compensation and public disability benefits from the claimant/beneficiary to government entities and workers' compensation insurers. The burden may be increased if the Social Security Administration requires insurers and public entities to acquire releases from the claimant/beneficiaries prior to disclosure of their workers' compensation or public disability benefit. It is likely that this proposal will receive widespread support. The proposal does not suggest an effective date; however, it is quite likely that the effective date would be approximately 12-18 months after any such legislative proposal became law.