Nearly two weeks after President Obama signed a sweeping new health care law, which seeks to eventually provide insurance coverage for 32 million previously uninsured Americans, many manufacturers are left with a bevy of questions. How does it affect business? In what ways and when will manufacturers start feeling its effect? What are its long-range implications?

Many of those answers won't be known for years, say several experts. But the most significant change the legislation brings is an extension of coverage to millions of new uninsured Americans through the expansion of Medicaid and establishing new federal health insurance premium subsidies.

"I think it's a bit too early to quantify the financial impact for manufacturers," says Mark Armstrong, a health care attorney practicing in the health and life science practice group for Washington, D.C., firm Epstein Becker & Green. "But I think it's going to have a significant impact upon benefits they provide to their employees and their retirees."

Companies are faced with a January 1, 2011, deadline to offer health care plans that extend coverage to employees' adult children up to age 26, while also eliminating lifetime dollar limits and removing pre-existing condition exclusions for children up to the age of 19.

There is also a scramble for many companies to take advantage of a one-time program that reimburses employers for 80% of each claim between $15,000 and $90,000 for health care plans covering retirees age 55 to 64.

Another hot-button issue within the health care law is a provision affecting employers offering prescription drug coverage that is at least equal to Medicare Part D and Medicare-eligible retirees. As originally written in the 2003 law, those employers are eligible for tax-free government reimbursement up to 28% of prescription drug expenses. The new health care law, however, negates the value of that tax break beginning in 2003.

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According to several reports, the government-sponsored subsidies account for more than $500 per retiree. That change, which must be reported immediately under new accounting rules, led companies such as Deere & Co., Caterpillar, AK Steel and AT&T to report charges to earnings last week. AT&T's charge was for a staggering $1 billion.

"There will be a major blow to companies from a financial standpoint and I'm not sure if anyone's convinced it will reduce the costs for health care in short- or long-term," says Barry Sloane, chief executive of Newtek Business Services, which provides loans and business services to medium-sized companies.

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