HR Tips

WCMSA statistics for FY2020 - 2024 now available

The Centers for Medicare & Medicaid Services (CMS) has released a new report, Workers' Compensation Medicare Set-Aside (WCMSA) Fiscal Year Statistics 2024. This one-page report has valuable insights into the trends of the proposed values submitted to the Workers' Compensation Review Contractor (WCRC) for voluntary review versus the values the WCRC determines. The report is based on decisions made, so it does not include submissions that did not result in a recommendation or approval nor zero ($0) submission approvals.

Key findings:

• There was a 5.5 percent decrease from FY2023 in the total number of decisions completed (14,852).
• The average of the proposed WCMSA submissions that were decided was $70,775.58. This figure has remained relatively consistent over the past five years.
• The average of the WCRC recommended values was $85,927.43, a slight decrease (0.6 percent) from FY2023. The report breaks down the recommended values by medical costs ($68,120.78) and prescription costs ($17,806.85). Prescription drug costs have been trending downward (33 percent since FY2020), while medical expenses have been trending upward (17 percent since FY2020).
• While the difference between the proposed and the recommended was 21 percent, a one percent drop from FY2023, the difference is quite a bit higher than FY2020 (13 percent), FY2021 (15 percent), and FY2022 (14 percent).

Overtime rule struck down - what's next?

On November 15, 2024, the U.S. District Court for the Eastern District of Texas struck down the DOL's overtime rule on a nationwide basis finding the white-collar exemptions need to be based on duties, not salaries, and the new rule makes salary predominate over duties, exceeding the DOL's authority. Also found illegal were the increase that went into effect July 1, 2024, and the automatic escalator provision, which would have increased the threshold every three years.

While the DOL can appeal the decision, many pundits think it unlikely the Trump administration would support the appeal. Others suggest that the nomination of Lori Chavez-DeRemer to be the DOL secretary may give some life to a rule with a lower threshold, similar to the July 1 change.

Employers have critical decisions to make about their compensation plans, but they may want to take a "wait and see" approach and put proposed changes for January 1 on hold. Technically, employers can roll back the increases that went into effect July 1, if it does not conflict with state law, but this can be problematic. On its blog, the Keystone Insurance Group notes "...it may not be wise to rescind that adjustment for a myriad of reasons. A rescission could affect compliance with applicable state law, employee morale, and be an administrative burden that outweighs any budgetary savings."

Regarding any planned January 1 increases that have been communicated to employees, Fisher Phillips, a labor and employment law firm, notes: "If you have already forecasted the increase, you might consider communicating to your workforce that the expected changes are going to be delayed given the court's ruling and let them know that you will continue to monitor the situation and make adjustments if and when appropriate. It is important to gauge your communications based on what you have already told your workforce. If there is an expectation that compensation levels would be increased during a certain time period, both for legal compliance and morale purposes, you will want to carefully craft your message." If you're planning to pause or roll back changes, it's wise to contact legal guidance to ensure compliance with state and federal laws.