Health Care Reform

Retiree Drug Subsidy Deduction Eliminated

Employers that provide prescription drug coverage to Medicare-eligible retirees that is at least as valuable as the Medicare Part D benefit are eligible for a subsidy of 28% of allowable prescription drug claims.  In effect, this subsidy has been tax-free for employers.  However, beginning with the 2013 tax year, an employer's allowable deduction for retiree prescription drug expenses must be reduced by the amount of the tax-free subsidy payment received.  (Which, in effect, means the subsidy is no longer tax-free for the employer.)  The provision also had an immediate Financial Accounting Standard 106 accounting impact on date of enactment of the ACA legislation.  

American Fidelity Assurance Company does not provide tax or legal advice.


Next Steps

Sign up for Updates

VIP Notification Service

We provide a VIP Notification Service to keep you informed as new Health Care Reform rules are issued.
Click here to sign up.

You’re Not Alone

We understand that these new requirements come at a time of strained budgets. 
Learn how our services and products can help.

Health Care Reform Timeline

What’s Due – And When? A simple timeline breaks down the new rules for you! Learn More

Time Line

Quick Access

  • Your Account

    View your policies, download forms and check the status of your claims - all in one spot!

  • Claim & Flex Forms

    1Select the forms you need:

    Flex Benefits
    Accident Benefits
    Cancer Benefits
    Critical Illness
    Disability Benefits
    Hospital Indemnity
    Life Benefits
    Medical (GAP)
    HRA Benefits

    2Select your state & industry:

  • Check Claim Status
  • FAQs

    Please select a category or type your question in the box below.

    Keyword Search
    All FAQs