Insurer Prudential Financial Inc. said Monday that it will take a $100 million charge in the first quarter in relation to the recent health care overhaul legislation.
The life insurance and annuities provider said in a regulatory filing that it will take the charge against earnings in the first quarter.
Prudential joins a growing list of companies that have said they will take accounting charges because of the health care bills. AT&T said last week it would take a $1 billion charge in the first quarter. AK Steel Corp., 3M Co., Caterpillar Inc., Deere & Co. and Valero Energy have also said they would take smaller charges.
Prudential said in a filing with the Securities and Exchange Commission that the health bill signed into law by President Barack Obama last week and a companion measure he is expected to sign Tuesday will reduce its tax deduction for retiree health care costs beginning in 2013.
Companies that provide prescription drug benefits for retirees have been getting subsidies covering 28 percent of eligible costs but could deduct everything they spent on the benefits — including the federal money — from their taxable income.
Normally I oppose subsidies, but this one one was keeping the elderly off the even more wasteful Medicare prescription drug plan. (I hate that plan – it was a huge mistake made by an otherwise good president). These companies are going to dump the pensioners onto Medicare and it will cost EVEN MORE to have an inefficient government run the program, with all the waste and fraud that plagues Medicare now.
That subsidy was to induce companies to keep retirees on their own corporate plans rather than dump them into taxpayer-funded Medicare. Now that they’ve cut the subsidy, not only is it costing these businesses money, but many are thinking of giving up the subsidy and dumping them into government health care.
Remember, if you like your insurance, you get to keep your insurance.
And Henry Waxman is going to drag these CEOs in front of his committee, to harass and threaten them, and badger them into answering why they’re bound to accurately account for additional new tax costs.
In fact, Waxman doesn’t want an answer to that; what he wants is for companies to hide these new, embarrassing costs illegally, so that Democrats don’t have to answer questions about them. And he figures harassment and the threat of punitive legislative action should be enough to give other companies the hint.
Preemptive Strike? Rich Lowry says it’s part of the Democrats’ plan to claim that all negative consequences of this bill are due to a conspiracy between evil corporations.
Illinois Tool Works Inc. (NYSE: ITW) today announced that as a result of certain provisions in the recently enacted Patient Protection and Affordable Health Care program, future Medicare prescription drug subsidies received by the Company for retiree prescription drug coverage will now be taxable. As a result, the Company expects to record a discrete tax adjustment of $22 million, or 4 cents of diluted income per share from continuing operations, in its 2010 first quarter results to reflect this change in tax treatment. This discrete tax adjustment was not included in the Company’s March 15, 2010 revised earnings forecast.
Wow. We’re in freaking North Korea now. Next time, don’t vote for the radical socialist. Socialism makes jobs go away. This is not a surprise to anyone on the right. We know these things because we’re grown ups. We know how the world works. Happy talk doesn’t grow the economy.
Related: Other companies take massive losses after Obamacare passes.