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Companies ask for repeal of health law provisionPosted On Tue, March 30, 2010
The American Benefits Council, representing 300 companies, is asking Congress and President Barack Obama to consider repealing a provision under the health care reform law.
The provision the ABC wants repealed reduces the tax deductions for companies with drug coverage for their retired employees. These companies view this as a significant hit to corporate profits and say it will discourage them from hiring more workers.
The provision takes effect in 2013, but accounting rules require companies to take immediate charges equal to the current value of any known hit to future profits, the New York Times reports.
James A. Klein, the president of the American Benefits Council, told the Times he sees the provision a serious mistake that has negative and unintended consequences. "Particularly in this economic environment, it makes no sense to impose this type of a hit on companies’ financial statements," he said.
The White House defends this provision and says there's a $5 billion subsidy for companies that maintain health plans to early retirees.
President Barack Obama is expected to sign the latest package of changes to the health care reform bill into law shortly.
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