Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of CareFirst of Maryland Unfunded Pension Costs," (A-07-03-03039)

May 2, 2003


Complete Text of Report is available in PDF format (783 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

The objectives of our review were to:   (1) determine if pension costs allocable to the Medicare contracts for plan years 1992 through 1995 were funded in accordance with the Federal Acquisition Regulations (FAR); (2) determine if the accumulated unfunded pension costs identified in our prior review have been properly accounted for; and (3) identify any unallowable components of the accumulated unfunded pension costs.  We found that CareFirst funded the pension costs allocable to the Medicare contracts for plan years 1992 through 1995 in accordance with FAR.  However, CareFirst did not properly account for the accumulated unfunded pension costs that were identified in our prior review.  CareFirst should have brought the accumulated unfunded pension costs forward, with interest, to January 1, 1996.