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AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

washingtonpost.com

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Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#21

Post by VladRussian2 »

AceJohnny2 wrote: post #15

I'm surprised the company (not the insurance) had to pay that much for the babies medical bills. I had a friend die to leukemia a year ago (she had just turned 27). 6 months prior to that, her first month in Stanford Hospital for chemo led to a bill to the insurance on the order of one million dollars. I don't know how much the insurance billed the company (a small one without AOL's income), but they upheld it. Tim A…

>I'm surprised the company (not the insurance) had to pay that much for the babies medical bills.

my understanding that AOL self-insures for medical.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#22

Post by NoPiece »

jonknee wrote: post #11
mkaziz wrote: post #7

I feel for those poor women whose colleagues probably know about their "distressed" babies.

Luckily, thanks to "Obamacare" they can leave AOL and know they will be able to have affordable insurance.

They will be able to get insurance, but it won't be affordable.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#23

Post by aNoob7000 »

jseip wrote: post #2

The worst thing about a struggling company is the petty, demoralizing measures management takes to cut costs. Save a few million in 401k costs but waste eight figures in decreased productivity, increased employee turnover, and lower morale overall. This seems shortsighted.

I completely agree with you. If I were an employee of AOL, I'd personally start looking for a way out.

When a CEO of a company becomes so petty as to point out the medical problems of a few employees (exactly two), he deserves zero respect or loyalty from his employees.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#24

Post by mikeryan »

waterlesscloud wrote: post #17
minimax wrote: post #4

"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general," said Armstrong AOL does something like $2 billion in revenue per year. This cost would have been a fraction of one tenth of one percent of revenue. What. a. shithead.

He's saying he's cutting 401K matching for people who leave the company during a given year so that the company can continue paying for extraordinary medical costs for its employees. It's a tradeoff, and morally it looks like the right one to me. Pay less to people who left to the company so you can continue paying more in health benefits to those who remain.

He's also touting record profits. The morally correct decision is to do both.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#26

Post by fnordfnordfnord »

throwaway1979 wrote: post #8
minimax wrote: post #4

"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general," said Armstrong AOL does something like $2 billion in revenue per year. This cost would have been a fraction of one tenth of one percent of revenue. What. a. shithead.

Blaming this on distressed babies is disgusting.

What if he's trying to humblebrag?

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#27

Post by Jtsummers »

waterlesscloud wrote: post #17
minimax wrote: post #4

"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general," said Armstrong AOL does something like $2 billion in revenue per year. This cost would have been a fraction of one tenth of one percent of revenue. What. a. shithead.

He's saying he's cutting 401K matching for people who leave the company during a given year so that the company can continue paying for extraordinary medical costs for its employees. It's a tradeoff, and morally it looks like the right one to me. Pay less to people who left to the company so you can continue paying more in health benefits to those who remain.

They aren't in a position where they actually need to choose one or the other. They can do both. Your position (penalize people for leaving before year end) will hurt the company. The article mentions the financial losses for both the people that leave (for a multitude of reasons), and the financial loss for those who stick around. But it's also a destruction of a very useful benefit that should help the company be competitive in hiring. 401k matching is one of the major tradeoffs people use for determining which job to take (or stay at). Now AOL is telling prospective employees: You'd better be loyal or we'll screw you over.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#28

Post by jonknee »

NoPiece wrote: post #22
jonknee wrote: post #11

Earlier quoted context omitted.

Luckily, thanks to "Obamacare" they can leave AOL and know they will be able to have affordable insurance.

They will be able to get insurance, but it won't be affordable.

Yes it will. Regardless of what you consider affordable, it will cost much less than before the ACA because of their "pre-existing" condition (a child with medical issues). It's likely they wouldn't have been able to get coverage at all before the ACA.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#29

Post by jonknee »

VladRussian2 wrote: post #21
AceJohnny2 wrote: post #15

I'm surprised the company (not the insurance) had to pay that much for the babies medical bills. I had a friend die to leukemia a year ago (she had just turned 27). 6 months prior to that, her first month in Stanford Hospital for chemo led to a bill to the insurance on the order of one million dollars. I don't know how much the insurance billed the company (a small one without AOL's income), but they upheld it. Tim A…

>I'm surprised the company (not the insurance) had to pay that much for the babies medical bills. my understanding that AOL self-insures for medical.

Which makes this even more offensive to pass off as increased costs because of "Obamacare". They were either providing sub-par coverage before or he's lying about increased costs.

Re: AOL chief cuts 401(k) benefits, blames Obamacare and two “distressed babies”

#30

Post by kmunoz »

waterlesscloud wrote: post #17
minimax wrote: post #4

"We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general," said Armstrong AOL does something like $2 billion in revenue per year. This cost would have been a fraction of one tenth of one percent of revenue. What. a. shithead.

He's saying he's cutting 401K matching for people who leave the company during a given year so that the company can continue paying for extraordinary medical costs for its employees. It's a tradeoff, and morally it looks like the right one to me. Pay less to people who left to the company so you can continue paying more in health benefits to those who remain.

Actually, this ruins 401k plans for folks who stick with the company too. Employees miss out on all the compounding throughout the year from the contributions.

From WaPo:

"In other words, employees will have to stay through the end of the year to get the match, and then the contribution won't even come during 2014. In a year like last year, where the stock market was roaring, the difference for an employee who left in December could amount to thousands of dollars in pay and added savings."

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/04/a...

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