From an April 6 New York Times editorial, “We call that double-dipping”:

What is really going on? It is true that, starting in 2013, the new law eliminates a corporate tax advantage on retiree drug benefits that amounts to double-dipping.

It is also true that accounting rules require that the present value of the entire additional tax that companies will have to pay over the next several decades be put on the books now. That led AT&T to declare a charge of about $1 billion in the first quarter of 2010 and Verizon to declare $970 million.

Those look like staggering amounts until one understands that they don't require any immediate cash payments and that the added taxes will be paid out slowly -- over perhaps 30, 40 or more years, depending on a company's retiree plan.

[...]

For every $100 the company spends on retiree drug benefits, Medicare sends it a subsidy payment of $28. On top of that, the companies got a rare double tax break. The $28 subsidy is tax-free, and the company was allowed to deduct the entire $100 as a business expense.

The new health care reform law has left the 28 percent subsidy intact and continued to exempt it from taxation. But companies will no longer be allowed to deduct the subsidy as if it were an expenditure of their own.

That seems a reasonable way to generate a bit more revenue to pay for covering the uninsured. It also treats all employers equally instead of favoring profit-making firms with a special deduction that is of no value to nonprofit organizations, state and local governments, or firms that lose money.

Related:

Wash. Times obscures “double subsidy” to trumpet corporations' complaints about health care reform

Ben Stein falsely claims health care reform ends “subsidy for drug costs”