Audit of the Pension Plan at a Terminated Medicare Contractor, Blue Cross Blue Shield of Connecticut

EXECUTIVE SUMMARY:

Blue Cross Blue Shield of Connecticut was a Medicare contractor until its contract was terminated in 1999 and, as such, was allowed to claim reimbursement for its Medicare employees' pension costs.  Federal regulations and the Medicare contracts provide, however, that pension gains which occur when a Medicare segment of a pension plan closes, be credited to the Medicare program.  Accordingly, we recommended that Connecticut remit $1,351,284 in excess pension assets to the Medicare program.  Connecticut agreed with our recommendation.