NORWALK, Conn., Feb. 17, 2006 (PRIMEZONE) -- The Governmental Accounting Standards Board (GASB) today published a proposed staff Technical Bulletin, intended to clarify the proper reporting of payments that an employer or a defined benefit other postemployment benefit (OPEB) plan receives from the federal government under Medicare Part D.
Medicare Part D is a new federal program that provides prescription drug benefits to eligible Medicare recipients. The law that created the program provides for payments to certain employers 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:
1. How should an employer account for and report a Medicare Part D
payment from the federal government to the employer?
2. 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?
3. How should an employer account for and report a Medicare Part D
payment from the federal government to the plan?
4. How should a defined benefit OPEB plan account for and report a
Medicare Part D payment from the federal government to the
plan?
"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 transactions," 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."
The proposed Technical Bulletin is available on the GASB website at www.gasb.org.
The GASB encourages interested individuals and organizations to comment on this proposed Technical Bulletin. The comment deadline is April 17, 2006. Comment letters should be submitted electronically to director@gasb.org or via regular mail to:
Director of Research Governmental Accounting Standards Board 401 Merritt 7 PO Box 5116 Norwalk, CT 06856-5116
About the Governmental Accounting Standards Board (GASB)
The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements and members of the academic community. More information about the GASB can be found at its website at www.gasb.org.