Will Health Care Reform Impact Your Medical Coverage?
April 2010
The passing of health care reform has appeased a lot of uninsured individuals, and ruffled a lot of feathers too. This is particularly the case for a few of those bigger companies who are paying for
group health insurance.
Their point has been driven home by the announcements by AT&T, John Deere, and Caterpillar that the loss of millions of dollars expected in the wake of health care reform is going to alter their care of employees, and in particular the medical coverage provided to them.
Here's what's happened: in 2003 when Congress and President George W. Bush passed Medicare Part D, larger companies were incentivized to continue offering prescription drug coverage to those employees covered by their group health insurance policies.
These incentives came in the form of subsidies, as well as the ability to exclude those subsidies as income at tax time.
The new health care bill still provides those subsidies, but now requires that larger companies pay taxes on it. This is standard with almost all other businesses.
These larger businesses stand to lose hundreds of millions of dollars when tax time rolls around because they will now be paying taxes on
medical coverage benefits given to them by the federal government.
Facts on:
The new health care bill still provides subsidies.
Did you know...
But now requires that larger companies pay taxes on it.
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According to the article at the Examiner about
health care reform, the Subcommittee on Oversight and Investigations is calling on senior company officials from AT&T, John Deere, and Caterpillar, to come to Washington D.C. and prove the claims, as well as explain how these losses will impact employees currently enrolled in group health insurance.
This is being done because previous calculations of the costs of the health care bill had found that major companies stand to save millions in medical coverage over the next ten years.
Each company will also be asked to provide information regarding the accounting methods used since 2003 for these companies to have made such claims.
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