Medicare Part D

The Affordable Care Act (ACA) changes the tax treatment of federal subsidies paid to plan sponsors of retiree prescription drug benefits that are at least actuarially equivalent to the benefits under Medicare Part D. These Retiree Drug Subsidy (RDS) payments will become taxable in tax years beginning after December 31, 2012.

Retiree Drug Subsidy (Medicare Part D): Elimination of Tax Deduction