Verizon to take $970M charge from health care bill

(AP) -- The corporate tax impact of the recent health care overhaul grew Thursday as Verizon Communications Inc. announced it will record a related $970 million non-cash charge in the first quarter.

So far at least 15 companies have disclosed about $2.8 billion in charges prompted by the health care overhaul. Verizon's charge is the second-largest after AT&T, which last week announced a $1 billion charge related to the tax bill.

Verizon and other companies currently receive a government subsidy to keep prescription drug benefits for retirees. They've been able to deduct all of their expenses, but that ends in 2013 under the recently passed legislation.

Companies are announcing the charges now because accounting rules say they have to book them during the period a new law is enacted.

Verizon's announcement follows Wednesday's disclosures by Boeing Co. and Lockheed Martin Corp. that they would record first-quarter charges of $150 million and $96 million, respectively, related to the health care legislation.

Other companies that recently announced charges include Ingersoll-Rand PLC and Goodrich Corp.

Source

So 15 companies already disclosing charges of nearly 3 billion... wonder how that's going to affect funding HCR?

Personally, I see the cost of goods and services going up to cover the added expenses companies are being forced to incur from this. And we have to pay in too.

It's going to get interesting.

I want to ask, if AT&T and Verizon combined have nearly 2 billion in charges due to this bill, what could the total charges eventually tally as other large companies file their reports?


*sorry if it's the wrong forum.

[edit on 4/3/2010 by abecedarian]

President Øbama's HCR will need all of 10 years to approach his idealistic vision.

the HCR law will not become a central driving force for the economy,
nor will it replace the old system where persons that abuse & neglect
their health are given Good Samaratin treatment...
or the unfortunate, kids especially, that have a community of small donation philanthropists set up Funds & Trusts for their benefit.

Øbama, is wearing those rose-colored-glasses,
naw...he has had surgery & they are permanenty rose colored eyes

reply to post by St Udio

I believe the bill becoming central to the Fed's economy, alongside income taxes. Another way to get more money to divert to their credit-spending practicies. They talk about people avoiding credit cards, living within our means, etc. so that fluctuations in the markets don't impact us then they turn around and do things that impact us.

If AT&T, Verizon, et al, take these charges, they are considered 'losses', correct? That means a loss of profit. Loss of profit in turn means less money available for development and salaries (I'm not going there), cut-backs in the work force, myriad cost cutting strategies as well as increases in service charges all in an effort to buffer the affect of the charge to the shareholders. The charges are because to the companies were receiving subsidies, a.k.a. 'tax breaks' to provide services to pensioners and those breaks are going away.

I see this potentially going the same way as GM, Chrysler, etc. who overextended themselves with pension and benefit packages to unions:
insolvency and bankruptcy.

I'd have thought that more people would be interested in this than have actually shown interest.

It's not every day that corporations post near billion dollar charges in response to government legislation.

/me grabs broom
/me sweeps under the rug