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Maybe they should get into the health care business.
AT&T Taking $1B Charge to Cover Costs of New Health-Care Legislation
http://www.foxbusiness.com/story/mar...e-legislation/
AT&T (T) said Friday that tax ramifications related to the newly passed health-care legislation will force it to take a $1 billion non-cash charge in the first quarter.
A handful of other companies have also announced projected losses stemming from the new law, but AT&T's is by far the largest. Also Friday, 3M (MMM) said it expects a $85 million to $90 million charge.
In papers filed with the U.S. Securities and Exchange Commission, AT&T said the charge stems from changes in the tax laws regarding the Medicare Part D subsidy. AT&T will no longer be able to deduct tax-free subsidies it receives from the government for providing retirees prescription-drug benefits.
AT&T Inc. intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change, the company said.
Furthermore, AT&T said in the filing that, as a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.
Maybe they should get into the health care business.
I saw this same thing today, too.
What are the tax breaks they are talking about that are being closed? Does anybody know?
If, as is the case with AT&T, they had been getting tax breaks for paying for a prescription drug program for retirees' health plans, and now the 'donut hole' is being closed for medicare recipients, it makes sense that they would no longer be providing those payments and/or taking the tax deductions associated with them, but does anybody know what else in involved?
It's a smart move to take the accounting hit all at once, and AT&T's head is an accountant, but I don't know what else is involved.
I bet Randall Stevenson (AT&T head) is thrilled beyond belief at having an excuse to reduce benefits. It was a really big problem in the last bargaining round with the union.
The end of some tax subsidies? Good news...
Think of how much money they could save if they just didn't pay their employees. I'm not talking reduced salaries, I'm saying they shouldn't pay them at all. Damn, that's a good idea.
AT&T is just one of many companies that subsidize Medicare drug coverage for their retirees. The new health law slaps a tax on those subsidies, effective next year. In addition to costing the communications giant a cool billion, the tax is likely to cost workers and retirees a cherished benefit. AP notes that, because of the legislation, AT&T is now “looking into changing the health care benefits it offers to active and retired workers.”
So much for the promise about being able to keep the health care you have!
http://blog.heritage.org/2010/03/26/...-one-employer/
2018: Imposes 40% tax on high cost health insurance plans.
yeah. the At&T plans are in the 'cadillac coverage' category.
A tax break is not a subsidy. Please look the definition up in various sources and see how it applies here.The end of some tax subsidies? Good news...
LOL @ you believing that these companies trying to make more money is because of health care. Thats ing rich.
These people are tools of their corporate overlords. Nothing new here.
Oh our rate hikes? ITS NOT BECAUSE WE WANT TO MAKE MORE MONEY ITS BECAUSE OF THAT BIG BAD HEALTH CARE BILL. NO REALLY. WE'RE JUST HERE TO HELP PEOPLE LIKE YOU BUT WE HAVE TO PAY OUR BILLS YOU KNOW. TALK TO THEM. NO REALLY. WE HAVE TO DO THIS. ITS NOT OUR FAULT.
No really, its their fault. Promise, cross my heart hope to die.
Lol just kidding my toes were crossed.
Winehole now i understand why you like this posting style. Its fun.
LOL RATE HIKES IS OBAMA'S FAULT. ing Nazi Socialist.
what posting style?
I said a 'tax subsidy'. You can call it a 'tax break' if it makes you feel better.
At the end of the day, it's money that should have gone to the government coffers but instead stayed with the company under some special arrangement.
I pay my fair share of taxes, I don't see why AT&T should be any different.
you don't have to make a profit and show an annual growth rate to get a raise. I also doubt you pay more, percentage wise and total, than AT&T.
"they should get into the health care business"
As resellers of group health plans, they are all already major players in the health care business.
And I'm sure they've figured out a way to make money off/scam employees, insurers, and taxpayers(deductions) by reselling group plans.
Brief posts. I used to get slagged for posts that were too long. Now I get accused of stat padding.
No blame. You can't make everybody happy.
AP update today:
"AT&T said Friday that the charges reflected changes to how medicare subsidies are taxed.
...
Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28% of eligible costs. But they could deduct the entire amount they spent on those subsidies - including the subsidies - from their taxable income.
The new law allows companies to only the 72% they spent.".
Of course they will be providing fewer benefits because medicare's prescription drug payment 'donut hole' is closed by this law, which means that they companies won't have to pay for the retirees' drugs, medicare will be covering them.
I think this may have been a bit over-hyped.
Doesn't mean that companies won't reduce payments wherever possible, it just means this is a really good excuse to take a write down.
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