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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of the Pension Plan at a Terminated Medicare Contractor, Health Care Service Corporation," (A-07-00-00112)

July 9, 2001

Complete Text of Report is available in PDF format (475 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report points out that about $2.1 million in excess pension assets at Health Care Service Corporation (HCSC) should be remitted to Medicare because of the closing of HCSC's Medicare segment of their pension plan.  The HCSC was a Medicare contractor until their contract was terminated in 1998 and, as such, was allowed to claim Medicare reimbursement for their Medicare employees' pension costs.  Regulations and the Medicare contracts provide, however, that pension gains which occur when a Medicare segment of a pension plan closes should be credited to the Medicare program.  Accordingly, we recommended that HCSC remit about $2.1 million in excess pension assets to the Medicare program.