Practical Law Glossary Item 1-505-4172 (Approx. 2 pages)
Glossary
Retiree Drug Subsidy
Established by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) for employers that sponsor group health plans that provide prescription drug benefits to retirees. Under the MMA, certain employers could receive a subsidy of covered prescription drug costs for their retirees. Employers were permitted to take a deduction equal to the amount of the subsidy received.
Effective January 1, 2013, however, the Affordable Care Act (ACA) eliminated this employer deduction.