Insurer Prudential Financial Inc. said Monday that it will take a $100 million charge in the first quarter in relation to the recent healthcare overhaul legislation.
The life insurance and annuities provider said in a regulatory filing that it will take the charge against earnings in the first quarter.
Prudential joins a growing list of companies that have said they will take accounting charges because of the healthcare bills. AT&T said last week it would take a $1 billion charge in the first quarter. AK Steel Corp., 3M Co., Caterpillar Inc., Deere & Co. and Valero Energy have also said they would take smaller charges.
Prudential said in a filing with the Securities and Exchange Commission that the health bill signed into law by President Barack Obama last week and a companion measure he is expected to sign Tuesday will reduce its tax deduction for retiree healthcare costs beginning in 2013.
Companies that provide prescription drug benefits for retirees have been getting subsidies covering 28 percent of eligible costs but could deduct everything they spent on the benefits — including the federal money — from their taxable income.
However, beginning in 2013, the healthcare overhaul will allow them to only deduct the amount of their own money that they spent. Prudential said it had taken a charge to reflect the increase in taxes it expects because of the changes.
The insurer earned $3.41 billion on revenue of $27.7 billion last year, when it was helped by a gain on the sale of its stake in a brokerage joint venture.
Shares of Prudential rose 70 cents to close at $59.91.
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