Blogging Employee Benefits

February 6, 2006

GASB on Medicare Part D

Filed under: Accounting, PERS — Fuguerre @ 9:15 pm

Medicare Part D subsidy payments for prescription drug coverage do not connote transfer to the federal government of a portion of a governmental employer’s obligation for postemployment health care coverage, according to the Governmental Accounting Standards Board. Accordingly, payments received from the federal government should not be reported as reduction of an expenditure or expense, but instead as revenue –

  • Payments to Employer – As voluntary nonexchange transactions.
  • Payments to an OPEB Plan – As on-behalf payments for fringe benefits.

GASB plans to vote during its February 16 meeting to issue a technical bulletin expressing this position. [Project Pages: Accounting Treatment for Medicare Part D]

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1 Comment »

  1. […] The Governmental Accounting Standards Board has published a proposed staff Technical Bulletin aimed at clarifying financial reporting of subsidy payments received by a governmental employer or plan from the federal government under Medicare Part D. [Proposed GASB Technical Bulletin No. 2006-a, ©2006 GASB; News Release] As previously touched on here at BeneBlog, GASB does not view Medicare Part D subsidy payments for prescription drug coverage as connoting transfer to the federal government of any portion of a governmental employer’s obligation for postretirement health care coverage. Proposed guidance under the technical bulletin – […]

    Pingback by BeneBlog » Blog Archive » GASB Exposure Draft on Medicare Part D Subsidies — February 19, 2006 @ 11:05 am


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