Health Reform Cuts Kroger Tax Deduction

CINCINNATI — Kroger Co. here on Monday said it expects its tax expense for this year to be $1.5 million to $2 million higher than a year ago because it can no longer deduct expenses for providing certain prescription drug coverage for its retirees.

The change, a result of the Patient Protection and Affordable Care Act signed into law on March 23, will be reflected primarily in the company's first quarter, the company said in a filing with the Securities and Exchange Commission.

Most of Kroger’s retired employees do not receive a prescription drug benefit from the company, Kroger said in the filing. The new law, as it pertains to prescription-drug benefits, will not affect Kroger’s tax deduction for the contributions it makes to multi-employer insurance plans.

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