The Governmental Accounting Standards Board (GASB), in February, published a proposed staff Technical Bulletin intended to clarify the proper reporting of payments that an employer, or defined benefit other postemployment benefit (OPEB) plan, receives from the federal government under Medicare Part D. Comments on the proposed Technical Bulletin may be submitted through April 17, 2006.
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“Since the provisions of Medicare Part D became effective on January 1, 2006, a number of questions have arisen regarding the proper accounting for these transaction,” said Karl Johnson, project manager. “Through this proposed Technical Bulletin, we are providing guidance on how best to apply existing accounting standards and to report these new federal payments in state and local government financial statements.”
Medicare Part D is the new federal program that provides prescription drug benefits to eligible Medicare recipients. The law that created the program provides for payments to certain employees who provide prescription drug benefits to persons who otherwise would be eligible to participate in Medicare Part D; the payments can be as much as 28 percent of certain eligible costs.
The Technical Bulletin looks at four specific questions:
- How should an employer account for and report a Medicare Part D payment from the federal government to the employer?
- How does a Medicare Part D payment from the federal government to an employer affect the accounting for the transaction and financial reporting by a defined benefit OPEB plan?
- How should an employer account for and report a Medicare Part D payment from the federal government to the plan?
- How should a defined benefit OPEB plan account for and report a Medicare Part D payment from the federal government to the plan?
Comments can be submitted electronically to [email protected] or by regular mail to
Director of Research
Governmental Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk, CT 06856-5116