Review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield of New Mexico

EXECUTIVE SUMMARY:

This final report provides the results of our review of Medicare Contractor's Pension Segmentation, Blue Cross and Blue Shield of New Mexico (New Mexico). We identified Medicare segment assets of $508,856 as of 1986. Additionally, we updated Medicare segment assets from Plan Year 1986 to Plan Year 1988 and identified segment assets of $616,574 as of January 1, 1988. New Mexico merged with Blue Cross and Blue Shield of Colorado and Blue Cross and Blue Shield of Nevada in 1989, and the corporate name was changed to Rocky Mountain Health care Corporation. The three companies' pension plans were officially merged on January 1, 1989. However, New Mexico's pension assets were not separately accounted for after Plan Year 1987. Instead, the Medicare segment pension assets of New Mexico were included in Rock Mountain's update of pension assets for Plan Year 1988. We separately accounted for New Mexico's assets ($700,952) to January 1, 1989. We recommended that New Mexico separately identify Medicare segment assets to January 1, 1989.