AT&T Inc. will take a $1 billion non-cash accounting charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.
The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses. On Friday, 3M Co. said it will also take a charge of $85 million to $90 million.
Remember, this is companies doing the “decent” thing, not the “required” thing. This will not go on much longer, probably not past the middle of next year.
My old employer, UPS used to send “retirement reminder” to employees when they near 55. They want to hire younger workers as soon as they can to cut expensive salaries and to move the anticipated increase healthcare cost onto the retirement accounts and off the capital gains accounts.
I wonder who the first “respectable” company will be? The one that just says, “Sorry, too expensive to take the charge, we’ll just cut the healthcare cost to the older workers in line with the law."
The reductions to health care benefits for the older worker now gives those companies cover to do that and by the way, cut the retirees loose too and let them join the new “pools.”