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BofA to Expand Health Coverage
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ShareBank of America Corp. (BAC) said on Tuesday that in order to partly comply with the government’s requirements under the new federal health care regulation in advance, it is planning to expand health care coverage for its employees' dependents up to 26 years of age.
BofA's existing plan covers employees’ dependent children up to age 19. For the dependent family member, who is a full-time student, the existing coverage is up to age 24.
The health care law signed in March 2010 requires dependent children to be covered on an employee's family health plans up to age 26. As a result, starting September 15, 2010, BofA’s currently enrolled dependent children aged 19 to 26 will be covered.
According to BofA CEO, Brian Moynihan, this advance action represents the company’s continued investment in its human resources.
BofA’s first quarter 2010 earnings came in at 28 cents per share, substantially ahead of the Zacks Consensus Estimate of 9 cents. However, this compares unfavorably with the earnings of 44 cents in the prior-year quarter.
Strong capital markets activity and lower provision for credit losses were the primary factors that helped BofA bounce back to profitability after incurring significant losses for the last couple of quarters.
The market turmoil was more harmful to BofA than its peers except Citigroup (C). However, BofA concluded its biggest acquisitions in this period. Following the acquisition of Countrywide in July 2008, the company acquired Merrill Lynch almost during the height of the financial crisis last year.
Though there are concerns related to BofA’s inconsistent credit quality and net interest yield compression, we anticipate continued synergies from its large scale operations and balance sheet restructuring. Finally, as the company has settled the litigation issues over its Merrill Lynch acquisition and is in the process of resolving charges against Countrywide, there remains limited room for regulatory and legal pressure.
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Read the full analyst report on C
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