Health law strips companies of sweet tax deal

[SpartanDem]

Source: Reuters

As more U.S. corporate heavyweights warn about multi-million-dollar charges related to the Obama administration's landmark healthcare bill, experts say the one-time hit simply curbs a government giveaway.

At issue is a sweetener added in 2003 by lawmakers to legislation providing a prescription drug benefit to Medicare, the health insurance plan for the elderly.

That incentive was a 28 percent subsidy for retiree coverage, plus a tax deduction for the payment, essentially creating a double benefit not usually granted under tax rules.

The carrot was added to ensure employers would not drop their own retiree coverage. The legislation signed by President Barack Obama last week keeps the subsidy, but no longer lets companies deduct the subsidy from their income.



Read more: http://www.reuters.com/article/idUSTRE6303Q220100401?type=GCA-HealthcareReform

[PSPS]

1. Makes sense

We shouldn't be allowing an outright gift from the taxpayers to become a deduction from income for the corporations. It was never an income or expense item to begin with.

[DissedByBush]

4. Go back further

It was a "gift" to lessen an extra expense the government put on the companies in the first place.

Anyone who didn't think there would be some financial pain in the beginning of this was deluded.

You don't make this big of a change without it.

Take the hit now, things will be better later.

[joeglow3]

2. Expect many companies to refuse to offer this benefit

I am in the process of calculating the impact for our company. I am estimating it will be about $6 million. My understanding is this was offered to stop companies from dropping retiree benefits.

[high density]

3. This is positive coverage from Reuters

That's a lot better than the http://www.nytimes.com/aponline/2010/03/26/business/AP-US-TEC-ATT-Health-Care.html?_r=1&dbk">AP story from March 26 that started with a headline of "AT&T Will Take $1B Non-Cash Charge for Health Care."

[Hell Hath No Fury]

5. Shit!

Something like this could really effect my retired Mom. :( She gets her meds covered 100% through her employer retiree plan -- she has been terrified that coverage will be dropped, which would be an utter disaster for her.

Fuck fuck fuck fuck fuck....