AT&T Will Take $1B Non-Cash Charge for Health Care

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AT&T Inc.will take a $1 billion non-cash accounting charge in the first quarterbecause of the health care overhaul and may cut benefits it offers tocurrent and retired workers.

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In this March 23, 2010 photo, AT&T President and CEO Randall Stephenson delivers a keynote speech...

Inthis March 23, 2010 photo, AT&T President and CEO RandallStephenson delivers a keynote speech during the CTIA wireless show, in Las Vegas.AT&T said Friday, March 26, it will take a $1 billion non-cashcharge in the first quarter related to the health care overhaul.(APPhoto/Isaac Brekken)
(AP)

The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses. On Friday, 3M Co. said it will also take a charge of $85 million to $90 million.

All five are smaller than AT&T, and their combined charges are lessthan half of the $1 billion that AT&T is planning. The $1 billionis a third of AT&T's most recent quarterly earnings. In the fourthquarter of 2009, the company earned $3 billion on revenue of $30.9billion.

AT&T said Friday that the charge reflects changes to how Medicaresubsidies are taxed. Companies say the health care overhaul willrequire them to start paying taxes next year on a subsidy they receivefor retiree drug coverage.

White House spokesman Robert Gibbs said Thursday that the tax law closed a loophole.

Under the 2003 Medicare prescription drug program, companies thatprovide prescription drug benefits for retirees have been able toreceive subsidies covering 28 percent of eligible costs. But they coulddeduct the entire amount they spent on these drug benefits — includingthe subsidies — from their taxable income.



The new law allows companies to only deduct the 72 percent they spent.

AT&T also said Friday that it is looking into changing the healthcare benefits it offers because of the new law. Analysts say retireescould lose the prescription drug coverage provided by their formeremployers as a result of the overhaul.

Changes to benefits are unlikely to take effect immediately. Rather,the issue would most likely come up as part of contract negotiationsbetween the company and unions representing its employees and retirees.AT&T is the largest private employer of union workers in the U.S.

Also on Friday, Reps. Henry Waxman, D-Calif.,and Bart Stupak, D-Mich., said they are asking the CEOs of Caterpillar,Verizon, Deere and others to testify at an April 21 House subcommitteehearing on claims that the health care law could hurt their ability toprovide health insurance to workers.

As simple as it is I didnt see this happening, granted I wasnt paying close attention to all this. I guess you gotta take to give?
 
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It was expected, the bigger companies are going to lose some to benifit many.  ATT does okay dont they, Theyll still be able to pay for all these lame Luc Wilson ads that ignore the 3g COVERAGE issues while they complain about THIS charge.
 
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If I'm reading this right, it's saying AT&T will alter it's health care coverage cause the loophole that saved them money is now closed. Since it's closed, AT&T is a bit salty because they can't rape the system, and since the system can't be raped, they're gonna push it off onto their employees even though they have revenue of 30 billion a quarter. Am I right in deducing this?
 
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Its 30 billion in revenue and 3 billion in profits. They just took a 33% hit to their profits.

As I said in the health care thread these corporations will not take a hit to their profit margins. This means they'll start scaling back certain aspects of your health care or drop it completely.
 
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Basically, they were getting a tax deduction on spending money that wasn't theirs to begin with. It's like this - What if you wanted to donate to $400 to a charity, and the government said "Cool, that's a good idea, were going to give you another $100 to make the full donation $500." You shouldn't be able to claim a $500 dollar donation on your taxes, because in reality you only donated $400.
 
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Originally Posted by Mangudai954



Also on Friday, Reps. Henry Waxman, D-Calif.,and Bart Stupak, D-Mich., said they are asking the CEOs of Caterpillar,Verizon, Deere and others to testify at an April 21 House subcommitteehearing on claims that the health care law could hurt their ability toprovide health insurance to workers.
Dems trying to thug CEOs into not speaking about the issue.
 
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Speaking of AT&T, they don't even hire full time employees anymore..they call them "long term temporary" employees..its a way for them to get around giving out retirement benefits.  
 
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Originally Posted by North Dade Represent

Basically, they were getting a tax deduction on spending money that wasn't theirs to begin with. It's like this - What if you wanted to donate to $400 to a charity, and the government said "Cool, that's a good idea, were going to give you another $100 to make the full donation $500." You shouldn't be able to claim a $500 dollar donation on your taxes, because in reality you only donated $400.
thanks for the explanation
 
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Wellllllllllllllll let's continue to trust Corporations because capitalism is the American way...
 
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Forget healthcare reform, the entire US is about to get reformed. Healthcare is just the tip, the US needs a lot of this blind eye crap to stop and get fixed. Businesses are going to try and push losses onto employees and employees are going to go ape.

Something's going to give and I doubt the little man (aka the hard working american) is going to take much more.
 
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If there's one thing this health care overhaul will show, it's that Capitalism is indeed corrupt.

Can't wait!!!

*grabs popcorn*

...
 
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I wish they would've said how much they would've paid had the law not been passed instead of throwing the final number out there. I'm not for either way but it always irks me when articles throw out numbers without a reference.
 
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Originally Posted by Ouch my feet

Forget healthcare reform, the entire US is about to get reformed. Healthcare is just the tip, the US needs a lot of this blind eye crap to stop and get fixed. Businesses are going to try and push losses onto employees and employees are going to go ape.

Something's going to give and I doubt the little man (aka the hard working american) is going to take much more.

I agree.
 
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Originally Posted by Essential1

Wellllllllllllllll let's continue to trust Corporations because capitalism is the American way...
I know.  What alot of these free market Repubs don't realize is that if many of  these corporations weren't so greedy, this "expansion" of government wouldn't fly.  The greedier these corporations get, the more people are going to look for the government to pick up the slack.  (in healthcare, unemployment, social security, medicare, welfare, etc)
 
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Originally Posted by cguy610

Originally Posted by Essential1

Wellllllllllllllll let's continue to trust Corporations because capitalism is the American way...
I know.  What alot of these free market Repubs don't realize is that if many of  these corporations weren't so greedy, this "expansion" of government wouldn't fly.  The greedier these corporations get, the more people are going to look for the government to pick up the slack.  (in healthcare, unemployment, social security, medicare, welfare, etc)
Capitalism + 0 Socialism = Totalitarian Government controlled by corporate bottom line watchers

Capitalism + Socialism =  A manageable and highly successful system
 
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Originally Posted by Mangudai954

Originally Posted by Ouch my feet

Forget healthcare reform, the entire US is about to get reformed. Healthcare is just the tip, the US needs a lot of this blind eye crap to stop and get fixed. Businesses are going to try and push losses onto employees and employees are going to go ape.

Something's going to give and I doubt the little man (aka the hard working american) is going to take much more.

I agree.
People on the right have been saying this.
 
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