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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

General Accounting

Receivables
Reporting of Medicare Part D Payments from the Federal Government

GASB TB 2006-1 was effective for financial statements issued after June 30, 2006 — except for portions of answers pertaining specifically to the measurement, recognition or required supplementary information requirements of GASB 43 and GASB 45. Those provisions are applied simultaneously with the implementation of GASB 43 and GASB 45. GASB TB 2006-1 addresses the following:

  • The portion of GASB TB 2006-1 implemented in fiscal 2006 requires Medicare Part D reimbursements received from the federal government in relation to prescription drug benefits to be reported as federal revenue. Recoveries must not be netted against the expenditures.
  • A Medicare Part D payment from the federal government to the employer is a voluntary non-exchange transaction between the federal government and the employer, as discussed in GASB 33, Paragraph 7. The employer recognizes an asset and revenue for the payment received following the applicable recognition requirements.
  • The payment is a separate transaction from the exchange of salaries and benefits for services between the employer and employees. The accounting for these types of transactions is addressed in GASB 45. Therefore, a sole or agent employer applies the measurement addressed in GASB 45 to determine the actuarial accrued liabilities, the annual required contribution of the employer (ARC) and the annual OPEB cost without reduction for Medicare Part D payments.
  • The payment transaction does not affect accounting for employer contributions or the financial reporting presentation by a defined benefit OPEB plan in which an employer participates. An OPEB plan applies the measurement requirements of GASB 43 to determine the actuarial accrued liabilities, the ARC and the annual OPEB cost without reduction for Medicare Part D payments.

For the reporting of the Medicare Part D reimbursements on the federal schedule, see Reporting of Medicare Related Programs.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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