Review of Pension Costs Claimed for Medicare Reimbursement by Travelers Insurance Company

This report provides you with the results of our review of Pension Costs Claimed for Medicare Reimbursement by Travelers Insurance Company (Travelers). We determined that Travelers under claimed allowable medicare pension costs for 1991 through 1995. During this period, the allowable Medicare pension costs were $2,089,883. However, Travelers claimed pension costs of $597,662 for Medicare reimbursement. As a result, Travelers did not claim $1,492,221 of allowable pension costs. The under claim occurred primarily because Travelers did not base its claims on separately computed pension costs for the Medicare segment. We recommend Travelers revise its Final Administrative Cost Proposals (FACPs) to reflect the additional allowable pension costs.