Disability Insurance Payments

If the A/R receives payments based on disability from an insurance policy, treat the payments as follows:

If the payments are designated by the policy owner to cover medical expenses only, consider the payments to be a TPL. Report the payments to Health Management Systems on Form DMA 285.

If the payments are designated to cover lost wages or to be used at the discretion of the policyholder (A/R), consider the payments to be unearned income if the payments cannot be assigned.