7 ms·
Health care: Microsoft ending 100% coverage for employees
- zach 16y ago"We can confirm that Microsoft has begun to evolve its employee health care benefit," the company said in statement. Wow, way to make it sound more ominous, corporate PR person. You could have just said you were knocking your benefits down a peg, but no, it's only the beginning of Microsoft's benefits turning into... well, what? Something much less generous, I guess. Here I thought Microsoft was just bowing to the enormous costs of health benefits, but with that turn of phrase, it seems like Microsoft has some kind of new attitude.
- ajg1977 16y agoAn out of pocket maximum of $1k ($2.5k for families) is still a very good deal. Bottom line - If you're generally healthy it won't make that much of a difference. If you or a family member require expensive care, or you're unfortunate enough to be in a serious accident, you'll still be very glad you're covered by MSFT.
- DougWebb 16y agoIf you're generally healthy and have health costs < $1000/yr, then this could mean going from 100% coverage to 0% coverage, depending on how they set it up. Still a great deal for accidents, though, compared to what most people have.
- whakojacko 16y agoI highly doubt its 0% covered until $1k/year out of pocket-Probably something like 80%.
- pyre 16y agoOut-of-pocket maximum means that $1k is the maximum that you'll pay for anything. It probably scales up to the point where your portion is $1k, and after that MSFT picks up the rest of the bill.
- enjo 16y agoAn out of pocket maximum is generally not the same as a deductible. My wife and I have a similar plan now. It's $1500 (I think) maximum, but we still only pay the routine $20 co-pay for normal visits... $75 for emergency room. I don't think we've ever actually spent more than $100 out of pocket over and above the monthly premiums. If something went terribly wrong, however, that cap would mean we'd owe at most $1500/yr. That worked out well for my father when my mom had cancer. 4 years of treatment totaling WELL over $1M, and I think he paid like $3500 total.
- woan 16y agoI don't know any other companies this generous even after the change in two years.
- ahi 16y agoMicrosoft is generous with their employees, but stingy when it comes to defining "employee".
- bhiggins 16y agoMicrosoft is also great at dodging taxes.
- salemh 16y agoGoldman Sachs if not in parity, very close.
- erreon 16y agoAlmost a year ago IBM announced they were going to cover Health Care for employees at 100%. Press Release source: http://www-03.ibm.com/press/us/en/pressrelease/28728.wss http://www-03.ibm.com/press/us/en/pressrelease/28728.wss
- woan 16y agoInteresting, I was there when they went from full coverage to the co-pay PPO/HMO model, as well as when they went from pensions to 401K retirement. Some of this seems to be in line with healthcare reform, i.e. no-copay preventative care.
- lkrubner 16y agoI wonder why they would make this announcement now? Why not a year ago, or a year in the future? My first guess would be there margins are slipping, or they expect there margins to be thinner in the next few years. Thus, they are starting to look for some minor cost savings.
- jf 16y agoThe announcement was timed to coincide with Microsoft's Open Enrollment period - which opens in November.
- lanstein 16y agoNope, the changes don't take effect for two years.
- Empact 16y agoIf you're switching to an HSA and anticipate good health in the near term, you could benefit from switching early and saving the unused portion of Microsoft's contribution to the HSA in your account, or otherwise contributing and allowing it to appreciate as savings. So yes, it could be helpful information for future planning.
- saratogacx 16y agoI would suspect that some of the timing may have been based on the outcome of the Obama health care bill. With additional requirements like insuring until children are 26 and things like that it makes it more expensive to provide health care.
- marclove 16y agoI think its nice that they're telling employees about the change this far in advance. Most employers will tell you about this a couple weeks before the prices get jacked up or the benefits get slashed. It shows a lot of respect for their employees.
- eclark 16y agoThe healthcare coverage was something that drew me in when I started work at Microsoft. It showed a pretty serious level of respect to their employees.
- InclinedPlane 16y agoWhile MS's health care coverage had been very "generous" previously, make no mistake: this is a pay cut for every MS employee.
- cartano 16y agoI am already on an HSA so this actually is a pay increase for me.
- lanstein 16y agoIncidentally, how is it that Mary Jo Foley has her name spelled wrong on her blog heading?? (with a hyphen) http://www.zdnet.com/blog/microsoft/microsoft-to-tweak-employee-benefits-and-more-news-of-the-week/7609?tag=mantle_skin;content http://www.zdnet.com/blog/microsoft/microsoft-to-tweak-emplo...
- natmaster 16y agoWhen you're taxed heavily by the government for having 'premium coverage', it kind of gives you the incentive to make the coverage crappier.
- marclove 16y agoNice try, but the the excise tax on "premium" plans doesn't go into effect until 2018. So if their only motivation was taxes, they'd have waited. Furthermore, I'm not losing any sleep about the government taxing only the portion of the value of a health plan that exceeds $27,500/yr -- in other words, the first $27,500 remains tax-free -- when the average employer-sponsored health plan is valued at $13,375/yr (2009). And here's what a $20,400/yr plan looks like: For the secretaries and environmental engineers, game wardens and van drivers who work for the state of New Hampshire, surgery is free, even at Boston’s top teaching hospitals if it’s necessary. So are MRIs, CT scans, and X-rays. Pregnant women pay nothing for prenatal care; alcoholics aren’t billed for short stints in rehab. Seeing a therapist costs just $10, as many as 20 visits a year, and prescription drugs top out at $30 for a three-month mail-order supply. New Hampshire state employees get $450 annually toward gym memberships, if they go regularly, or $200 toward their own treadmill - and there’s a $150 annual reimbursement for yoga classes, diabetes clinics, and nutritional counseling. http://www.boston.com/news/nation/washington/articles/2009/07/04/healthcare_overhaul_could_limit_tax_breaks_on_benefits/ http://www.boston.com/news/nation/washington/articles/2009/0... Yea, cry me a river if well-paid employees now have to buy their own treadmills or pay for their own rehab.
- larrywright 16y agoSo if a company (or state government in your example) wants to provide health care benefits to be competitive in the marketplace, they should be penalized for that? Additionally, your statement about "well-paid employees" doesn't seem to fit with the article you quoted. Secretaries and van drivers aren't generally highly paid positions.
- marclove 16y agoSo if a company (or state government in your example) wants to provide health care benefits to be competitive in the marketplace, they should be penalized for that? I don't accept your premise that taxes = penalization. Employers who pay their employees $35,000/yr have to pay more in federal taxes than if they paid their employees $34,000/yr. I don't consider that a penalty either. Its progressive taxation. Additionally, your statement about "well-paid employees" doesn't seem to fit with the article you quoted. Secretaries and van drivers aren't generally highly paid positions. "Well-paid employees" referred to Microsoft employees. The government positions (secretaries & van drivers) mentioned in the article, I would agree, probably aren't highly paid. They have a great health plan because of the unions that represent them and fight for those benefits. If they were non-union, they'd probably have much crappier health plan options. But as the article said, the value of their plan is $20,400/yr. The excise tax is on whatever amount exceeds $27,500/yr. So they, and the state government they work for, will not be subject to any new taxes under the Health Care and Education Reconciliation Act of 2010. The reason I quoted the article was to show how great a $20,400/yr health plan is. Just imagine the benefits you'd get from a $27,500+/yr health plan. The people who have plans that expensive, most of them executives and other highly paid employees, are not hurting and I could care less if they have to go with a slightly less lavish plan that doesn't cover things like rehab, treadmills and gym memberships or choose to pay what amounts to income taxes on the portion that exceeds $27,500/yr.
- aaronbrethorst 16y agoGoodbye last conceivable reason to ever go back to Microsoft.
- fizx 16y agoI've heard of people who've worked at microsoft for exactly their chosen childbearing years. It's equivalent to 2x+ salary, and a nice paragraph on the resume.
- larsberg 16y agoThis may have an impact on recruiting senior hires. It didn't come up often, but when recruiting folks with families and getting on in years -- especially with pre-exiting conditions -- this benefit helped close people who had salary and stock package offers from other companies that I couldn't match. It's really hard to argue with 100% coverage for even things like autism treatment and visits to naturalists/homeopathic-care, which was quite unusual at the time.
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- shasta 16y agoWow, this is a gonna be a $2.5K pay cut for us, straight up. We used to take our kids to the doctor whenever they were showing signs of sickness - fever, cough, runny nose, skinned knees. Now we're going to have to weigh whether they're sick enough to shell out $20 to take them to the doctor. And I guess this is the end of lollipop Tuesdays.