Review of Carefirst of Maryland Unfunded Pension Costs

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.