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Delta warns Obamacare will cost it $100 million in 2014
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| Contributor | Scott³ |
| Last Edited | Scott³ Aug 22, 2013 07:19pm |
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| Category | News |
| Author | Jacques Couret |
| Media | Newspaper - Pacific Business News |
| News Date | Friday, August 23, 2013 01:00:00 AM UTC0:0 |
| Description | "Delta Air Lines Inc. expects Obamacare will cost it $100 million in 2014 and warned the law will “provide real challenges for both our company and our employees,” according to a letter it sent in June to the Obama Administration.
Radio host Erick Erickson posted the letter online Thursday, saying “numerous” Delta employees called his show in Atlanta Wednesday to let them know the memo had been circulating. Also yesterday, Atlanta Business Chronicle reported United Parcel Service Inc. (NYSE: UPS) planned to drop 15,000 spouses from its medical plan due to Obamacare. The story went viral and was picked up by Drudge Report.
According to Delta’s letter, the Affordable Care Act is “anything but business as usual.” Due to Obamacare regulations, Atlanta-based Delta (NYSE: DAL) said it faces $10 million in new reinsurance fees, $14 million to cover employees’ children until age 26, $14 million related to the individual mandate provisions and other costs.
“...make no mistake -- the costs imposed on Delta and our employees are very real and they are escalating,” the letter reads. “The costs mentioned above, when combined with normal medical inflation and the end of the ERRP program mean that the cost of providing health care to our employees will increase by nearly $100 million next year. Delta will have to absorb the vast majority of that increase in costs so that we continue providing a high value, quality health plan, but some of it will have to be shared with our employees as well. And of course, the balance that the company pays simply means less left over for other investments that make our business stronger.” |
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