AT&T Plans $1 Billion Charge Tied to Health Benefits

WSJ Online ^ | 26 March 2010 | Roger Cheng

[NautiNurse]

AT&T Inc. plans to take a noncash $1 billion charge in the first quarter in anticipating the impact of changes brought by the nation's health-care overhaul.

AT&T follows Deere & Co., Caterpillar Inc. and AK Steel Holding Corp. in taking the one-time charge.

The companies are taking the charges now even though the impact of the health-care law won't be felt until 2013.

[NautiNurse]

BOHICA

[BradtotheBone]

http://www.freerepublic.com/focus/f-news/2480565/posts

[lowbridge]

Negative Impact of ObamaCare Already Kicking In

[DonaldC]

I can’t get to the article. I see the $1 billion charge but that is compared to how much in revenues and/or how many employees does ATT have? I’m trying to understand how high a hit this really is.

[NautiNurse]

The article states that ATT employs more union workers than all the U.S. auto makers combined. ATT will need to review its sizable retiree benefits.

[WOBBLY BOB]

whole lot of Hope and Change exemptions coming CWA’s way.

[Frantzie]

Shareholders are sharing the wealth.

[pb929]

Can we add this to the CBO score?

[Alberta's Child]

See my Post #7 in this thread . . .

Click Here

I predict that AT&T is going to start dumping their retirees right off their insurance rolls -- and they're going to recover that $1 billion (if not more) before long.

[madinmadtown]

No worries...remember all those cell phones that Obama gave away....now taxpayers get to foot the additional AT&T fees for them as well. Our tax dollars are being spent at warp speed by our government....it doesn't feel like our government, but someone else’s government.

[jimbo123]

AT&T will need to cut 4-5% of their workforce to make up for the $1B hit to their bottom line.

That’s about 12,000 employees who will need to get the boot before the end of the year.

[muawiyah]

They've got about 303,300 employees. There are a variety of different deals for their retirees, many of whom were working for different companies only recently re-accreted to the AT&T label.

The "hit" looks to be $2,000 to $4,000 for each employee/retiree depending on what benefit package we are talking about.

Since every "loss" like that comes out of income not previously taxed, there's no tax break for the employees, but it's pretty obvious that services provided under the existing medical care plans will need to be CUT quite deep ~ and if this were comparable to the federal government plans those cuts could range from 15% to 50% depending on the plans.

I am absolutely certain the employees will notice the difference.

[Alberta's Child]

Or they toss a bunch of retirees off their insurance rolls and thereby reduce their future medical insurance obligations.

[NautiNurse]

Good info. Thanks.

[DonaldC]

Incredible numbers and they are just starting to come in. Another thread mentions 3M.

[jimbo123]

The safest option to handle the $1 billion hit to the bottom line is to cut the 12,000 or so employees first. And then deal with retirement benefits after the legal challenges are over.

[Heart of Georgia]

"The companies are taking the charges now even though the impact of the health-care law won't be felt until 2013."

Wondering if the writer is really that dumb!!!!!

[Hoffer Rand]

I predict that AT&T is going to start dumping their retirees right off their insurance rolls -- and they're going to recover that $1 billion (if not more) before long.

Bet they also send out hefty rate increases, moaning about the extra costs at the same time.

[DonaldC]

I saw that also. Maybe something much worse kicks in in 2013...LOL

[Heart of Georgia]

On second thought, this will probably be the talking points - greedy companies.....need to be stopped.....obama to the rescue.