Claimant Mary Ferreira entered into a settlement agreement that included funds for her to establish a Medicare Set-Aside account. The contract stated that Ferreira, not the employer or carrier, be responsible for administering the account. The agreement also provided that the employer/carrier would deposit seed money in the amount of $10,851.08 and $33,694.64 for the purchase of an annuity that would yield $2,154.18 per year, and that amount was final, not subject to change or approval by CMS.

The parties also agreed that if CMS demanded a larger amount, Ferreira would be responsible. Ten months after the settlement was approved, the employer/carrier filed a motion seeking to compel Ferreira to return an “overpayment” of the MSA seed money. The employer/carrier had received correspondence from CMS that the gross amount of the MSA was accurate, but the sums projected for annual deposits were deficient. The employer/carrier had not yet purchased an annuity to fund the deposits. They demanded that Ferreira pay the additional amount so they could buy an annuity that met CMS’s requirements.

The judge of compensation claims granted the employer/carrier’s motion, reasoning the Ferreira had agreed to fund or pay the difference should CMS deem that more money was necessary for future medical expenses. Ferreira appealed.
Analysis: In its majority opinion, the first DCA said that the judge of compensation claims had misinterpreted the settlement contract. Noting in the agreement required Ferreira to pay anything more than the sums that were promised to purchase the annuity to fund the future deposits into the MSA. By not purchasing the annuity as promised, the employer/carrier created a predicament whereby the JCC was forced to rectify the potentially conflicting provisions which, on one hand, provided the annuity amounts were fixed, not subject to change, and not dependant of CMS approval, and on the other hand, made the claimant responsible for any deficiencies later identified by CMS, the opinion said.

Disposition: Reversed and Remanded
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