Here’s a recent announcement from 3M Corp:
We recognize that many of you have questions about how the new health care bill will impact your 3M benefits. We need to take time to understand and analyze the new laws before we make any changes to our medical programs.
A provision that will impact the company immediately relates to the Medicare Part D subsidy. 3M will be subject to federal income taxes on the subsidies it receives for providing prescription drug benefits for our retirees and their eligible dependent(s). The government provided this subsidy to help offset the financial burden of offering prescription drug benefits to retirees and with the goal that retirees would be less likely to rely on the Medicare Part D program.
Although the tax doesn’t take effect until 2013, 3M is required to recognize the impact in the period in which the law was signed. 3M will record a one-time non-cash charge to earnings in the first quarter of 2010 of approximately $85 to $90 million after tax, or approximately 12 cents per share. 3M issued a press release today describing this adjustment.
The scope of the bill is far reaching and complex. We will be providing updates once we understand the provisions more clearly.
The government provided this subsidy to help offset the financial burden of offering prescription drug benefits to retirees and with the goal that retirees would be less likely to rely on the Medicare Part D program
So the government is giving money away to avoid giving money away? That makes a lot of sense.