Originally Posted by sfloriII

Great point!! Why do we have to get insurance through employers?? If it were based on individual people making the purchases themselves costs would go way down. We buy every other kind of insurance ourselves.... why not health insurance?

Originally Posted by 450slcguy

Ooh a misplaced word, how silly of me.

Originally Posted by guage

Who do you suppose is going to pay in the end?


By DAVID REILLY, ELLEN E. SCHULTZ And RON WINSLOW

AT&T Inc. said it would take a $1 billion charge against earnings tied to the federal health-care overhaul, joining a number of other companies in reporting an impact from the bill signed into law this week.

The charges relate to prescription-drug benefits for retirees. Companies that provide this benefit, as AT&T does, receive a federal subsidy, plus they can deduct the value of this subsidy from their taxes. The health overhaul cancels the deductibility of the subsidy.

It is for that reason that companies are taking a charge against earnings. They "have a stream of tax benefits that they are losing way out into the future," said Roland McDevitt, director of health-care research at benefits consultant Towers Watson.

On Friday, 3M Co. joined AT&T in saying it would take a first-quarter charge, in 3M's case of $85 million to $90 million. Deere & Co., Caterpillar Inc. and AK Steel Holding Corp. also said they were taking such charges.

AT&T's is much larger than the others' because it has far more current and future retirees, and a large number of them are unionized, with guaranteed benefits.

The charges are "noncash," meaning companies don't have to write a check. But ultimately their tax bills will be higher given the change in tax treatment of the drug-benefit subsidy.

The charges are related to a 2003 law providing a prescription-drug benefit under Medicare. At the time it was adopted, some companies were threatening to drop drug coverage for their retirees, since this would now be available through Medicare. Congress voted them a 28% tax-free subsidy for continuing to provide coverage to retirees eligible for Medicare.

The subsidies caused the cost of companies' obligations for retiree benefits to decline. AT&T, for example, saw its obligation drop by $1.6 billion at the time.

The cost of providing retiree prescription-drug coverage was already tax-deductible before the 2003 law. After that law was signed, companies remained able to deduct the cost of providing the benefit, including the portion paid for by the subsidy.

The current health-care overhaul doesn't eliminate the subsidy, nor make it taxable. What it changes is that companies will no longer be able to deduct the portion of the drug benefit paid for by the subsidy.

Since companies had created an asset based on the expectation they would be getting these deductions over the lives of their current and future retirees, they say they need to take a charge reflecting the fall in the asset's value.

Accounting rules say the charges, which affect what are called "deferred tax assets," must be taken in the quarter in which a tax-law change is enacted. The first quarter ends Wednesday. Companies wouldn't have to announce the charges before they actually report their first-quarter earnings over the next several weeks. However, if they viewed the charges as material, they might feel they needed to inform shareholders immediately.

The one-time charges, running into the hundreds of millions of dollars, could add to the ongoing debate about the health overhaul's impact, even though the charges are noncash.

Mr. Zion of Credit Suisse estimated in a report this week that companies in the S&P 500 index will rack up a combined $4.5 billion charge due to the change in the value of the tax asset.
—Roger Cheng contributed to this article.
http://online.wsj.com/article/SB20001424052748704100604575145981713658608.html

Originally Posted by raslaje

Exactly right. AT&T and every other employer with health benefits just passes the cost on to the customer. Let everybody get their own insurance. I just bet most of the people in favor of this bill had their insurance paid by their employer's customers.

Originally Posted by guage

Raise the cost of product or service to pay the offset. Or let go some employees.

Originally Posted by 450slcguy

Well so far Rush Limbaugh, Skid Row, and AustinCE have indicated there getting ready to leave. Obviously they don't believe in our system of government and have a better place in mind. Good for them, good riddance and lots of luck in their new country.

Originally Posted by Craig

Actually, it sounds like they were given a "bribe" in 2003 to continue to provide drug benefits to their union retirees and the new bill has taken it away. I assume they will now get rid of that benefit in their next union contract.

The good news is that mandatory health coverage will make unions even less relevant and level the playing field for non-union workers. It also means that part of my phone bill will not be going to pay these union benefits.

Originally Posted by Skid Row Joe

After the vote, Al Sharpton makes the statement that "Americans overwhelmingly voted for socialism when they elected President Obama." as well as the statement "This began the transformation of the country that the President promised when he was elected"

Originally Posted by JollyRoger

Al Sharpton is a government official? Why should I give a rat's rear what he says? Why is what he says so important to you?

Originally Posted by Skid Row Joe

Correct.

Count on both happening.

For examples:
Just yesterday, Caterpillar and Deere and Company both reported increases of $100,000,000.00 million dollars in increased healthcare-related costs each.....and that is for just the remainder of this year - 2010!!!

In the months ahead as Capitalism continues crumbling, and unemployment rises - I predict that Obama and the 50.5% of Congress that voted government medicine in will proclaim that Capitalism doesn't work. I told you so here.

Originally Posted by guage

Maybe a different country will give them a better incentive to mfg there!