Unilever Dumps Retiree’s In To Medicare

Hank Williams asked "Why do you treat me like a worn out shoe?" and Unilever responds by dumping the retiree health insurance plan. This follows as 3M and Honeywell had similar announcements. Retiree health insurance plans are going the way of the buggy whip as corporations look to save money as a result of Obamacare.

Not only does Obamacare impact the cost of health insurance, funding this monster requires new taxes on corporations that provide group health insurance for their employees and retirees.

A diminished tax break for employers who provide retiree drug plans and the anticipated availability of better Medicare coverage as the government shrinks the so-called "doughnut hole" gap in prescription drug coverage are among the factors that have companies reexamining their retiree health insurance programs, he said.

If you like the plan you had before Obamacrap, that is too bad. Like Dick Nixon, it won't be here to kick around any more.

Part of the impetus for companies steering retirees to individual Medicare plans this year is the coming loss under recent health care legislation of a tax benefit that employers who offer drug benefits have been getting for the past few years, he said. Under the 2003 law that created Medicare Part D drug coverage, employers get a 28 percent reimbursement of their retiree drug plan expenses within a certain range. They also are allowed to deduct the amount of that subsidy from their taxable income. Under the health care changes, employers will continue to be offered the subsidy, but the deduction of the subsidy portion will go away in 2013.

The subsidy is eliminated as part of Obamacare.

Honeywell also said in an Oct. 22 filing with securities regulators that by discontinuing its company retiree medical plan, it will trim its benefits obligations by $137 million.

Thousands will lose their fat, retiree health insurance plan and will be transferred to taxpayer funded Medicare which is already broke. This is one of those unintended consequences of Obamacrap.

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Comments

  1. Let’s be honest – the real reason employers are dumping retiree health insurance is to save money by reducing the huge liabilities they have on their books. Employers have been dumping retiree health insurance since the early 90’s when FAS 106 accounting rules were adopted – requiring companies to expense hugh amounts for future liabilties. The lost tax deduction for receiving Fed subsidies – from the Healthcare bill – is peanuts compared to the overall cost. Honeywell is saving $130 million

  2. Bob Vineyard says:

    No doubt retiree health plans are an albatross and have been for some time. About the only employers left that can afford these plans are government entities with unlimited power to tax and those that have heavy union involvement.

    Mixing the two, union and govt and you have a marriage made in Hell.

    Any time the govt get’s involved private industry reacts and usually to the detriment of the public. When ERISA became law it didn’t take too long before traditional defined benefit pension plans went away.

    More govt intrusion = higher costs all around.

    The impact of Obamacare is just another reason to drop medical insurance plans.

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