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Subject Number 046-372 The Board Will Not Approve Medicare Hold Harmless Language in Section 32 Agreements

Subject Numbers Concerning Health Providers’ Authorization to Treat Workers’ Compensation Claimants and/or Conduct Independent Medical Examinations

Supersedes Subject Number 046-372 dated November 13, 2009

March 2, 2020

On November 13, 2009, the Board published Subject No. 046-372, which announced that the Board would not approve Section 32 Waiver Agreements that required the claimant to indemnify and hold the carrier harmless for any payment made by Medicare for treatment of claimant’s work-related injuries prior to the execution of the Section 32 Waiver Agreement. Since the publication of Subject No. 046-372, Section 32 Waiver Agreements have been submitted to the Board for approval containing similar provisions whereby the claimant has agreed to indemnify and hold harmless the carrier for its potential financial liability. Recently, the Board has received Section 32 Waiver Agreements which provide that the claimant will indemnify and hold harmless the carrier in the event that the carrier incurs liability as the result of the claimant’s failure to safeguard the funds in a self-administered Medicare set-aside account established pursuant to the agreement.

The Board has determined that it will not approve any Section 32 Waiver Agreement that requires a claimant to indemnify and/or hold harmless the carrier. Given the disparity in bargaining power and financial resources between individual claimants and insurance carriers, the Board believes such provisions, regardless of the particular liability for which the carrier seeks indemnification, are unfair and unconscionable (see WCL § 32[b][1]), and have no place in an agreement settling a claim for workers’ compensation benefits.

Clarissa M. Rodriguez