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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Impact of the Employee Retirement Income Security Act Full Funding Limitation on Medicare Contractor's Funding of Pension Costs," (A-07-93-00684)

December 27, 1993


Complete Text of Report is available in PDF format (936 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

This final report points out that two Medicare contractors, in an attempt to protect the allowability of pension costs for future Medicare reimbursement, used paper transfers of pension assets from other lines of business to fund the Medicare pension segment. Such transfers do not constitute funding and are unacceptable in meeting Federal funding requirements. The two contractors concurred with our recommended removal of the paper transfers from the Medicare segments. We recommended that the Health Care Financing Administration (HCFA) require similar action for other contractors that executed paper transfers in an attempt to fund pension costs. The HCFA concurred with our recommendation.