Goodrich Corp. (GR) to Record $10M Q110 Charge Due to New Health Reform Legislation
Goodrich Corporation (NYSE: GR) announced today that it expects to incur a one-time charge against its first quarter 2010 results of approximately $10 million, or $0.08 per diluted share, due to the recently-passed U.S. health care reform legislation.
The expected charge relates to the elimination of tax deductions available to companies that provide prescription drug coverage to retirees. The Medicare Modernization Act of 2003 (MMA) expanded Medicare to include prescription drug coverage through a plan known as Medicare Part D. Under the MMA, employers that provide prescription drug coverage to retirees that equals or exceeds the benefit provided under Medicare Part D are entitled to a subsidy of 28 percent of the cost of the coverage.
Currently, employers can deduct the entire cost of providing the coverage. For taxable years beginning after December 31, 2012, the newly-enacted Patient Protection and Affordable Care Act will repeal the rule permitting deduction of the portion of expense that is offset by the Part D subsidy.
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