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That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

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Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#181

Post by dylandrop »

pg wrote: post #92
ekidd wrote: post #31

I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable. I'll be sure to keep that in mind the next time I hear from an AOL recruiter. The whole point of insura…

"I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable." Did he say that?

"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. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan." -- Armstrong

Whether or not it's absolutely unacceptable to him is debatable, but it is clearly acceptable to use the cost of preserving the lives of his employees' children as a scapegoat, when many other expenses (large engineering salaries, "digital prophets" [1]) could have been noted as examples of excessive expenditures. What ekidd is mad about, and I think reasonably so, is that the attitude of "oh, our employee's child almost died which was costly, so let's cut some benefits" as an acceptable mindset to Armstrong is very troubling. In so doing, he is passing on the price of expensive healthcare costs from AOL to his employees, in the form of a slashed 401k. Now that seems to be pretty close to ekidd's paraphrase -- Armstrong does consider it unacceptable for AOL to pay for his employee's child's healthcare, because he wants to pass on that cost to his employees vis-a-vis 401k cuts.

Now at least in my view, I'd hope my employer would place employees' wellbeing first, and consider cutting benefits as a last possible option, but maybe you have a different view.

[1] http://www.businessinsider.com/shingy-aol-digital-prophet-20...

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#182

Post by deveac »

pg wrote: post #92
ekidd wrote: post #31

I'm delighted to hear that this child is doing well, and I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable. I'll be sure to keep that in mind the next time I hear from an AOL recruiter. The whole point of insura…

"I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently it's possible to pay a programmer $100K/year, but spending ten times that to save the life of one of his employee's children is absolutely unacceptable." Did he say that?

>Did he say that?

Setting aside the fact that the post above is obviously not quote from Armstrong, we can't say for certainty what he said because all we have is a reported quote in the press with the sources cited as an unnamed AOL employee's transcript of the call.

The alleged quote from the transcript is:

>“Two things that happened in 2012,” he said, according to a transcript provided by an AOL employee. “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. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”

If you believe the quote is accurate, Armstrong is clearly singling out these two babies as contributing to the reason why the 401k plan was changed.

But we lack all of the surrounding context, and the quote above wasn't even continuous. It does, however, fit the mold of televised arguments he gave on the subject. Obamacare and rising health care costs were cited and a decision to not completely absorb those and pass some of the increase to employees in the form of other benefit reductions was the argument he made in a few different places.

A poor comment to make considering the whole point of insurance and how it works, as well as the size of AOL's insurance risk pool IMHO, but then, I don't know if he even made that comment or qualified it with something like "But this is exactly the kind of worthy benefit and cost we believe should be prioritized above certain other existing benefits."

Given his response, it gives me the impression that he made a comment to this effect, and that it was a poor one to make, but that's just an impression. And it's even harder to say where his heart is on the matter. At the very least he has mentioned in interviews that they actively prioritized their benefits package in light of costs, and clearly healthcare was a higher priority than the 401k benefits that were cut. So for the poster to conclude that Armstrong deems covering the costs of these sick babies "unacceptable", I don't see it. The opposite, if anything. Whether or not he used the sick babies to rhetorically deflect from the fact that AOL is choosing not to absorb all of the rising costs and is passing them on to employees...well that is another story in my mind.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#183

Post by ars »

lutusp wrote: post #40
woodchuck64 wrote: post #27

Curious that AOL had to pay millions of dollars for insurance claims. Isn't that the insurance company's responsibility?

The entire point of this issue is that AOL chose to self-insure. That means there was no insurance company.

They should have gotten secondary catastrophic insurance. I.e. only for claims over some dollar amount, which are very rare and very cheap to insure for.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#184

Post by spacehome »

shasta wrote: post #78
paul wrote: post #47

Earlier quoted context omitted.

I'm aware of that kind of thinking, which is why I'm glad you aren't running the medical system. Consider who you're talking about when you say, "The cost of replacing the thing".

I agree with your parent and thus don't want you in charge of "running the medical system," either. But we don't have to have one or the other. You buy your insurance policy that covers whatever it takes to save your fetus and I'll buy my policy that doesn't (and spend the difference on improving the lives of my healthy children).

This is pretty obviously preferable to the situation we have in health care today in the U.S., where you're (more or less) forced to get employment and health insurance from the same company.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#185

Post by tsotha »

nilsbunger wrote: post #29

AOL could've chosen a 3rd party insurance company instead of self-insuring. Self-insuring was probably a decision intended to save money compared to getting an external health provider. The CEO could conclude that these outlier events create too much unpredictability for the bottom line, and thus move the company to an external healthcare provider. Heck, they could even fire the CFO or whoever made the cost-benefit a…

Third party insurance doesn't necessarily save you when this happens. I worked for a company with third party insurance, and when one of my coworkers had a kidney transplant we lost money that quarter as a result of extra charges.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#186

Post by keithpeter »

jobu wrote: post #17

She quoted this line from some of the TV coverage: “How many distressed babies does AOL pay this guy?” Does anyone know who said that? That's really dark, but also hilarious.

Less dark: we used to measure budgets, wages &c in units of Rovers (millirovers for small items) for some years in a place I worked in because the Principal decided to buy herself an official Rover - while at the same time freezing expenditure on such fripperies as textbooks, photocopying paper &c. That one ended up on extended sick leave and then a payoff...

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#187

Post by bashcoder »

fiatmoney wrote: post #98

If your company cannot afford to pay $1M insurance claims, you shouldn't be in the business of insuring medical coverage. You should be re-insuring that risk. There are many companies that will be happy to do this for you. The fact that apparently AOL is on the hook for medical claims by its employees indicates they've made a reasoned judgement that their risk pool is diverse enough that it's worthwhile to self-insur…

Yes - there is a middle ground for self insured companies called a stop-loss provision. Companies can still get lower premiums through being self insured, but are also covered against huge losses over a specified amount.

In addition to the horrible way this was handled by management, this is clearly the failure of the AOL benefits team, who exposed AOL to more risk than it was actually prepared for.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#188

Post by lutusp »

facepalm wrote: post #178

I don't understand - doesn't insurance pay for such costs? Why is it an extra burden for a company if one of their employees needs money from the health insurance?

Because AOL chose to self-insure, there's no insurance company, just an asset pool within AOL itself.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#189

Post by davidw »

pg wrote: post #172
dkural wrote: post #153

Earlier quoted context omitted.

What is your interpretation Paul? What did he say? Do you think Tim did anything wrong or do you advice that Tim sticks to his guns on this one & shouldn't have caved in with that second memo?

What did he say? http://www.capitalnewyork.com/article/media/2014/02/8539961/... He shouldn't have mentioned specific cases. If he felt the company had to cut elsewhere to compensate for high medical costs, he should have left it at that level of detail. But I don't see how you get from what he actually said to I'm utterly appalled at Tim Armstrong's attitudes towards the lives of his employee's children. Apparently…

> Frankly, posting and upvoting that sort of comment is the behavior of a lynch mob.

Have you been reading the comments on the many political articles that now cross the front page of this site? The quoted comment is fairly tame stuff compared to some of the opinions expressed in those threads.

Re: That “distressed baby" Tim Armstrong blamed for benefit cuts? She’s my daughter

#190

Post by keithpeter »

bigchewy wrote: post #25

Tim Armstrong has an incredible ability to say the wrong thing. The underlying topic, however, is fascinating. I do healthcare analytics for a living so I see how often a single neonatal ICU incident can consume 30% of an entire company's healthcare budget for the year (note: if you don't really understand healthcare, e.g. what self insuring means, please don't respond with comments that the insurance company pays th…

What is the frequency of these kinds of incident per thousand live births? What I'm saying is should you not be in favour of a much larger risk pool? Is there any way self-insuring corporations can pool risk without the overheads of an actual insurance company?

UK perspective: I'm interested in the concept of 'health analytics' as our present government are sort of dancing round the edges of the NHS (knowing that any form of direct privitisation/move to insurance based benefits would result in prompt removal from office).

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