Employers (Deere) lose drug tax benefit in overhaul

NPR's Jim Zarroli's story on how the new health care law will effect employers aired today on Morning Edition. WVIK News reported last week on Deere and Company's announcement about it. Here's our story.

The new health care law will cost Deere and Company some money. The company says its expenses this year will rise by 150 million dollars as a result of the overhaul bill signed by the president this week.

Spokesman Ken Golden says that's because a federal subsidy for the company's drug plan for retirees will be taxable from now on.

When the new Medicare Part D benefit was approved in 2003, it included a 28 per cent subsidy for employers offering prescription drug coverage for retirees - the goal was to encourage the companies NOT to drop their plans.

Golden says Deere is now evaluating the new health care law. And because the House and Senate are still working on possible changes, it's too soon to know what further costs and other effects there might be for the company.