Pink Fire Pointer Healthcare Reform Update - 31March2010

Healthcare Reform Update - 31March2010

American Benefits Council Pressures Congress to Repeal Part of Health Reform Law
  • The American Benefits Council, which represents 300 companies, is asking Congress and Obama to consider repealing a provision of the healthcare reform law.
  • The provision under scrutiny reduces the tax deductions for companies that provide prescription drug coverage for their retired employees.
    • Since 2006, companies have received a 28-percent federal subsidy (up to $1,330 per retiree) on a tax-free basis to help pay for prescription drug coverage for retirees.
    • Until now, companies could deduct the subsidy from their taxes, essentially receiving a second benefit from the money. (If a company pays $100 in coverage, they would receive a $28 subsidy, yet still deduct $100 in expenses from income for tax purposes.)
    • Now, companies will no longer be able to deduct the coverage amount, but it remains tax-free.
  • This provision doesn’t go into effect until 2013, but companies are bracing for the change now.
    • AT&T announced last week that it was taking a $1 billion charge because of the provision;
    • Deere & Company announced a $150 million charge.
    • Boeing expects a $150 million charge.
  • Many companies say they are taking these charges before the current quarter ends to comply with accounting rules. However, some critics believe the companies’ quick response to the provision is aimed at pressing the administration to repeal it.Find all the info that you need about " good research essay topics orderessay " at
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