Health Care Reform May Present Disclosure Issues for Public Companies

25 March 2010 Publication
Author(s): Patrick G. Quick

Legal News Alert: Transactional & Securities

The Patient Protection and Affordable Care Act, which was signed into law on March 23, 2010, constitutes a significant overhaul of the health care system in the United States. While many of the changes that will flow from the Act will not take effect until 2014, there are consequences or potential consequences for public companies that may result in near-term impacts on their public disclosures.

The enactment could trigger charges to earnings in the current quarter. For example, in the two days since the Act became law, a number of companies have publicly disclosed non-cash charges as a result of changes in the way the new law treats reimbursements for Medicare Part D retiree drug coverage provided by employers. All public companies providing this benefit to retirees should work with their legal accountants and actuaries to assess the potential impacts of this change on their financial statements. In addition, companies should consider whether any financial statement impacts may materially alter their previously issued guidance, and should factor any such impacts into guidance to be issued in the near term. Companies also should consider other disclosure issues — such as whether any resulting charges to earnings (or potential future financial statement impacts) require discussion in the company’s next MD&A, or rise to the level of a new or expanded risk factor in the company’s next periodic filing under the Securities Exchange Act of 1934 or a new or expanded cautionary statement accompanying the next disclosure of forward-looking statements.

The Act will undoubtedly raise a host of issues for all employers to consider in the upcoming months, including decisions regarding whether to continue to offer certain benefits or pay statutory fines instead, and the extent to which existing employee benefit plans may need to be amended or new plans adopted. Although a thorough discussion of those issues is well beyond the scope of this news alert, companies should be mindful of disclosure implications of any future decisions.


Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues. If you have any questions about this alert or would like to discuss the topic further, please contact your Foley attorney or the following individuals:

Peter C. Underwood
Milwaukee, Wisconsin

Patrick G. Quick
Milwaukee, Wisconsin

Related Services


What’s Next for Blockchain and Crypto?
01 December 2022
Innovative Technology Insights
Case Law Update: Disputes Relating to Supply Chain Disruptions Hit the Courts
01 December 2022
Manufacturing Industry Advisor
Foley Partner André Thiollier Moderates Global Venture Market Session at BayBrazil Conference
01 December 2022
Foley Ignite
Podcast Episode 96: Eric Williams, Associate
01 December 2022
Foley Career Perspectives
What You Should Know About Payor/Provider Convergence
25-26 January 2023
Los Angeles, CA
ATA EDGE2022 Policy Conference | American Telemedicine Association
7-9 December 2022
Washington, D.C.
CLE Weeks
5-16 December 2022
Milwaukee, WI
Foley Sponsors Ernst & Young Entrepreneur of the Year® Program
1 December 2021 - 30 November 2022
Michigan and Northwest Ohio Region