"Audit of the Pension Plan at a Terminated Medicare Contractor, Hawaii Medical Service Association

The objectives of this audit were to evaluate Hawaii Medical Service Association's (HMSA) compliance with the pension segmentation requirements of its Medicare contract and to determine the excess assets that should be remitted to Medicare as a result of the termination of the Medicare contractual relationship effective June 30, 1999.   We computed excess Medicare pension assets of $456,481 as of January 1, 2000.  In our opinion, the excess pension assets were the result of HMSA terminating the Medicare program and transferring all remaining Medicare liabilities out of the Medicare segment.  We recommended HMSA remit the $456,481 of excess Medicare pension assets resulting from the termination of its Medicare contract to the Federal Government.