Delta warns Obamacare will cost it $100 million in 2014 – Atlanta Business Chronicle

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.”

“Like many large companies, Delta faces significantly increased health-care costs in 2014 and beyond,” the company told Atlanta Business Chronicle. “Delta will absorb the vast majority of those increased costs so that we can continue providing a high value, high quality health plan. Consistent with our culture, Delta will always keep the best interests of our people in mind in connection with the healthcare and other benefits we provide.”

The $100 million in new health-care costs will hurt the carrier and profitability isn’t easy to maintain in the airline business.

via Delta warns Obamacare will cost it $100 million in 2014 – Atlanta Business Chronicle.