5 ms·

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

59 points by rsobers 13y ago

roderick3427 13y ago
I wouldn't have expected this sort of behavior from a big tech company like AOL.
- a3n 13y ago
  This is the guy that publicly fired someone during a conference call without a moment's thought, at the snap of a neuron, and without whatever procedures were in place at his company. You should expect this kind of behavior from him 24/7.
- timje1 13y ago
  Is this the same AOL that still gets a good chunk of money each year from people that never cancelled their 56k internet subscription when they got ADSL? I think AOL is one large moral-free zone.
  - gdulli 13y ago
    Why is it a moral failing for AOL to leave it up to its customers to be responsible for the decision of what services they do or don't need?
    - normloman 13y ago
      Because their cancellation policy is intentionally designed to make it nearly impossible to cancel your AOL account. http://www.nytimes.com/2005/08/29/technology/29link.html?pagewanted=all http://www.nytimes.com/2005/08/29/technology/29link.html?pag... I think they might have changed things in recent years, but it's still not easy to cancel your AOL subscription.
    - selmnoo 13y ago
      It's not that they're "leaving it up to its customers to be responsible", it's strategically employing black patterns to exploit specific mistakes people make. Are you 100% on top of your every bill? Do you know everything going in and going out of your bank account? Have you made any mistakes in looking over something? My friend's dad is a CFO of a Fortune 500 company (and is a generally well-reputed guy) - I recently found out that he's pretty bad at managing his home finances - forgets to pay credit bills and all that. This shit just happens. I'd rather that I deal with a company that doesn't try to actively exploit me on my weaknesses. The companies that do this have a bad character and I wish they just didn't exist.
      - gdulli 13y ago
        > Are you 100% on top of your every bill? If I wasn't, I sure wouldn't blame anyone but myself for it. I wouldn't blame the company I willingly gave money to due to my own oversight. And I wouldn't be surprised if they didn't call me and ask me to stop paying them.
    - timje1 13y ago
      If the customers are actively paying for a service that AOL is providing, despite not needing that service anymore, AOL has an obligation to mention that to them. Otherwise AOL is exploiting the technological ignorance of their own customers, which is immoral. If AOL's logs show that a customer hasn't used their service in more than a year, it would be trivial to send out a 'are you sure you still need us?' letter to each of them.
    - ben010783 13y ago
      I think he was just using that as one example of AOL's questionable business practices. The company has been known for things like charging customers for service they don't need, making it difficult to cancel service, and pumping out a large volume of low quality content (pulled from original sources) to get higher search rankings.
- wtbob 13y ago
  IBM went to the EOY lump-sum 401(k) plan awhile back.
a3n 13y ago
Nut.
givehimagun 13y ago
They make 1.04 billion in profit each year and 9 million has him worried? It also seems to be a breech of trust that he outed 2 women and their children in this. I wonder if coworkers will have any backlash against these women. If that does happen it then it could easily become grounds for a lawsuit against AOL. Also they spent $405 million on an acquisition in August (8 months ago): https://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL https://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL
- vikas5678 13y ago
  Yes, I was thinking the same. Clearly in a company, everyone will eventually find out who these women are, so although he didnt break any laws by revealing their names, these women are probably feeling pretty targeted right now.
- bilbo0s 13y ago
  I have to admit... the baby thing really bothered me. If you want to make a political statement against Obama... fine... I get it. But why drag two innocent families into this? What were these people supposed to do??? NOT try to help their children??? That was a very classless maneuver on AOL's part. Just state that your medical benefit costs were higher than expected this year. Don't be a douche about the whole thing. I apologize for the rant... just rubbed me the wrong way.
  - gcb0 13y ago
    So it served it's purpose. Now instead of getting everyone outraged against benefit cuts for political action, you think that is fine but want reparation for the baby comment. forgot the name of this discourse diatribe, but apparently it's effective.
    - bilbo0s 13y ago
      What do you mean? The entire REASON we're outraged is because we REALIZE it was nothing more than political! If that is a technique they teach... all I can say is that it doesn't work very well here on HN. Benefit cuts for political action has lost A LOT of support around the tech industry today.
protomyth 13y ago
Well, the "distressed babies" comment is par for the course from Mr. Armstrong. He is not doing any other tech companies CEO any favors. He does remind me of the one psycho that attends a peaceful protest, but gets all of the press coverage to show the protest in a bad light. He says foolish things so he is the representative of all tech CEOs in an unfriendly, as of late, press. As to the health insurance, yes, its going to go up for most and with higher deductible and premiums. All the rhetoric now meets the pavement.
- jbooth 13y ago
  Health insurance has been increasing by ~9% a year since the late 1990s. Obamacare is predicted by the CBO to bend the cost curve in the right direction but it's not going to 0% or sub-inflation anytime soon. Anybody blaming their cost structure on Obamacare is just being opportunistic, although I guess I can't blame them. Getting a multi-billion dollar media machine pushing a message makes it persuasive.
  - torkins 13y ago
    premiums rose by 4% for 2013, so that's the right direction, even sub 5% edit: http://www.nytimes.com/2013/08/21/business/survey-finds-modest-rise-in-health-insurance-premiums.html?_r=0 http://www.nytimes.com/2013/08/21/business/survey-finds-mode...
    - protomyth 13y ago
      Your pointing to an article based on a Kaiser Family Foundation survey of employers for 2013 without any guidance on 2014 when the ACA changes occur for businesses. A study about a year that the ACA doesn't affect the group being studied is not very informative. study: http://kff.org/private-insurance/report/2013-employer-health-benefits/ http://kff.org/private-insurance/report/2013-employer-health...
      - jbooth 13y ago
        Is the national review less biased? http://www.nationalreview.com/corner/353475/slowdown-health-care-inflation-here-stay-veronique-de-rugy http://www.nationalreview.com/corner/353475/slowdown-health-...
geetee 13y ago
Can someone please explain what a "distressed baby" is in this context? And why did AOL foot a million dollar bill for each and then blame the mothers?
- selmnoo 13y ago
  Because he's an asshole with a long and illustrious history of doing shit like this? I'm just really sad that we, the programmers and engineers, keep letting people like him climb up the ladder.
  - a3n 13y ago
    We, the programmers and engineers, have absolutely no say in the matter. If you wanted that influence you should have been an MBA. We're Morlocks.
    - mattgreenrocks 13y ago
      But the need to professionalize is way overdue: http://michaelochurch.wordpress.com/2012/11/18/programmers-dont-need-a-union-we-need-a-profession/ http://michaelochurch.wordpress.com/2012/11/18/programmers-d...
    - dragonwriter 13y ago
      Nah, programmers and engineers aren't Morlocks to executives Eloi -- when was the last time a programmer or engineer ate a C-suite exec? Serfs, not Morlocks.
- pgrote 13y ago
  It may relate to prematurity. The cost of hospitalization of a premature baby can be 500K to 1.5 million on average given a 20-40 day stay in the NICU. AOL's insurance would cover it and rates might rise slightly, but it is disingenuous to blame the women. AOL might be self-insured, but I doubt it.
  - geetee 13y ago
vikas5678 13y ago
I should point out however, that this 401K match at the end of year practice is already a standard at IBM, which is probably the worst place to work at in the Silicon Valley today.
- throwawayandrun 13y ago
  ...plus nowadays IBM only starts matching after a full year of employment. Worst-case scenario, you could work 1,99 yrs and get nothing.
ryguytilidie 13y ago
It's pretty distressing to me that these people are like "eh, I'll just cut a few million in benefits for ALL MY EMPLOYEES, blame obamacare and pocket it myself." Because we need to get people angry at the idea that their fellow man is getting adequate healthcare!
- andzt 13y ago
  We have had similar discussions in our own company, which is much much smaller than AOL. It's definitely not directly caused by Obamacare, but we've watched healthcare costs significantly rise over the last few years. And it's mostly these "catastrophic" cases - major surgeries, expensive pregnancies etc. We are try to figure out how we can continue offering great benefits but we'll probably have to make a change. Not to save our billion dollar profits (I wish), but so we can continue to function as a company and employ some great people...
  - jbooth 13y ago
    Health insurance costs rose by 131% from 1999-2009[1], which comes out to just under 9% inflation. That's in comparison to an average 2.5% inflation for all goods including healthcare since 2000[2]. 2.5% inflation turns $100 into $128.01 over 10 years. Instead, we got 231. About 10 years ago I was in local government, we laid off teachers every single year in order to keep paying health insurance premiums for the rest of them. More money for less bodies. [1]http://business.time.com/2009/09/16/health-insurance-premiums-up-131-in-last-ten-years/ http://business.time.com/2009/09/16/health-insurance-premium... [2]http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_... (edit: fixed my numbers thanks to twoodfin)
    - Cthulhu_ 13y ago
      That's mostly because there not being any restrictions on health care pricings (as far as I know); the insurance companies don't pressure hospitals to keep costs manageable, the government doesn't prevent health care institutions from charging widely different prices, and nobody stops pharmacy companies from charging exorbitant prices for medication.
ceautery 13y ago
The video did not include any comments about million dollar babies. It did show him saying a 3% match on 401k is a great deal... which it isn't.
- deleted 13y ago
  [deleted]
- FireBeyond 13y ago
  Tell that to the very vast majority of Americans who work their entire lives without "employer matching" on their 401k's... Or a smaller but not insignificant number for whom a 401k at all is something dreamt of.
  - ceautery 13y ago
    OK. Dear vast majority.... Actually I'm in that boat, too, but of my own doing. At where I work (a large utility in the midwest), we match 75 cents on the dollar up to 6%, so essentially 4.5%. I stopped contributing a few years back to try to get out of debt faster, but kept finding creative ways to add new expenses: wife, new daughter, another new daughter, repair that leaky roof, etc. Still, my point was obvious: 3% is free money that shouldn't be turned down if it's available, but to laud it as something to brag on is really grasping at straws. 6% was the industry standard in my area... and I once worked for a company AOL bought out.
pmorici 13y ago
The distressed babies thing is bizarre since when does a company have to pay extra out of pocket for something like that like Armstrong is claiming? Isn't that the whole point of Insurance, in case something bad happens insurance pays?
- pyre 13y ago
  More like the cost of that company's plan goes up, but I somehow doubt a company as large as AOL has significant cost increases due to a baby or two that had some special surgeries.
- Agathos 13y ago
  Most large companies self-insure. They just hire a "health insurance" company to administer the plan.
  - andrewtbham 13y ago
    a company i worked for self-insured, but they did have insurance that kicked in at a very high level.
cfesta9 13y ago
I love how he starts the video posted in the article off with "We are in the most intense talent space in the world" Well good sir don't expect to keep any of that talent. This sickens me.
mortov 13y ago
Wow ! Obviously sexual discrimination and workplace bullying are in favor at AOL. Seriously, this sounds like another 'top notch tough businessman' appointed at immense salary. My experience has been the first person normally claiming they are top notch is none other than themselves, and otherwise prosperous companies with generally good prospects seem to bleed money shortly after their arrival (normally into their pockets) and end up as burned out shells being sold off piecemean with some golden parachute to the outgoing top notch guy before he repeats the performance or retires to a recently purchased, by a tax haven based company, island in the Carribean. And as proof of true sexual equality, there are examples where the he is a she.
- FireBeyond 13y ago
  Of course. The entire company's "hit" from the ACA (I'm making myself a pact now to refuse to call it "Obamacare" again) could have been covered by half of his salary ($12MM before bonuses or stock options).
lxt 13y ago
Wow. A billion dollars in profit, 12 million in his pocket each year...but the 7 million for health care has to come out of the employees' other pocket. Also, the fact that he's blaming two babies - I find it highly unlikely, statistically, that two such cases blew the cost of premiums for a group as large as AOL. I'm pretty sure they had more employees with cancer that year, for example, and that's also super-expensive. This guy is despicable.
- gum_ina_package 13y ago
  He's not blaming two babies, he simply stated that unforeseen events caused the company's healthcare costs to go up unexpectedly.
  - rgrieselhuber 13y ago
    Still disgusting to parade two specific examples like that.
  - 727374 13y ago
    Sounds to me like he's blaming the babies or else he could have left them out of it and said something like 'exceptional events'.
    - bilbo0s 13y ago
      That's EXACTLY what he should have done. He should have said, "The cost of our medical benefits package was higher than expected." FULL STOP. I can't, for the life of me, see how anyone could possibly think what that man did was appropriate.
  - abarringer 13y ago
    On a group the size of AOL statistics would clearly imply at least two expensive cases per year. To single those cases out is inexcusable. In 2000 I worked at a relatively small company of 50 employees. One person had a baby that cost millions sic. Being a small group we all knew who it was and anticipated our insurance rates increasing. Our rates went up some but not much, and the company president decided to cover 100% of the increase. I greatly admired the company for doing that and now 14 years later I find myself working with the same team on a new startup. The company president has been able to get back most of the top talent from a decade ago because we all respect and admire his leadership.
deleted 13y ago
[deleted]
gum_ina_package 13y ago
To everyone who's saying "they make X billions in profit each year and can't afford Y million!", that's not the point. It'd be irresponsible of him to simply eat the extra costs. Hopefully, people wake up and realize what a horrible law Obamacare is and demand it be repealed.
- astrodust 13y ago
  What is wrong with you? Are you suggesting AOL employees should be paid minimum wage?
  - a3n 13y ago
    Less. Federal interference in wages is an abomination. /s
  - thrownaway2424 13y ago
    I doubt that person supports the minimum wage law.
- GoogleCoder 13y ago
  Fuck you prick. Eat a dick you fucking shit faced republican. Your kind are the scum of this earth.
  - gdulli 13y ago
    Take this kind of shit back to reddit, please. There's no excuse for escalating a difference of opinions like this.
thedaveoflife 13y ago
Obamacare: the perfect scapegoat for large companies trying to cut costs.
dgbsco 13y ago
As an AOL employee, this news and other internal news really, REALLY makes me want to reconsider my options.
bobjordan 13y ago
From my view, this is a case where random big box mgt consulting firm (McKinsey, PWC, Booz) found some loose cash on $xM engagement. Tim then publicly regurgitated much of the internal deck logic. Obamacare may have been his own (questionable) addition - but the two distressed babies was definitely in the deck. Whichever consulting firm it was obviously need's to coach those CxO's better on implementation.
thrillgore 13y ago
And here I was being sympathetic to "healthcare problems" until he threw those two mothers under the bus with that backhanded remark. Has this guy shown no class while at AOL? I'd like to think AOL has made a meteoric turnaround with HuffPost and Patch especially (the content is better than the local papers in my suburban hellhole, which isn't saying much) but maybe I spoke too soon.
ScottWhigham 13y ago
It disappoints me to read the knee-jerk reactions here by those who obviously have not gone through childbirth. To help some of you along, a "distressed baby" would be his way of saying that the mother or baby experienced trauma or were under life-threatening duress either during childbirth or prior. This is not that unusual - things like umbilical cords wrapped around a neck, a small birth canal, and other reasons can cause significant problems during childbirth. How many millions of women and babies have died during childbirth? Half of the commenters here are acting as though childbirth is always a safe process. The guy used a term that the writer of the article took offense to and you guys are making a huge deal of it. Get over it. Imagine yourself having to tell the same story to 100 reporters 100 times over two days. You'd try different ways of saying it and, no doubt, at least one of those times you'd use a word or phrase you wished you could take back. If you're unhappy that he's bitching about paying for healthcare, fine - let that be why you complain. But stop falling for the buzzfeed/linkbait BS titles and "tricks" that authors use to try to make stories facebook-worthy.
- phillmv 13y ago
  It's not about whether the babies are having a bad time, it's about the breach in privacy involved in referring to the health issues that two of his employees underwent, and directly blaming them for the health premiums.
- nitrogen 13y ago
  From what I've read, people who have to tell once.the dame story 100 times over two days are supposed to have a list of talking points that they memorize and refuse to deviate from the list, and/or hold a press conference to tell everyone at once.
GuiA 13y ago
"For employees leaving to go to other employers, not matching those programs was probably the last thing on the list for us in terms of employee benefits that we wanted to keep." I can't imagine what must be at the top of the list if "no healthcare" is a the bottom. Sounds like even the CEO agrees that AOL is a shitty, shitty place to work for.
sebnukem2 13y ago
Someone at work gave me her email address, and it was an AOL address. I felt like I had discovered a new living fossil, still in her thirties (guessing). And that's how I know that AOL, somehow, is still kicking.
uptown 13y ago
What right does Mr. Armstrong have revealing private medical details about policy-holders to the public?
robodale 13y ago
If I was a woman working there...I would GTFO. Hell, if I was any female/male/other working there, I would GFTO.
karmelapple 13y ago
If you'd like to let him know what you think about this, be sure to check him out on twitter @timarmstrongaol https://twitter.com/timarmstrongaol https://twitter.com/timarmstrongaol
flashgordon 13y ago
On a semi-related note, what makes fetal distress cost a million dollars to recover from? I would have thought by now this should have been part of every pediatricians runbook. I am not any where savvy with medicine and also apologize in advance if this sounds insensitive. That is not my intention. I am curious as to what would make these costs be so high.
dougabug 13y ago
Why would anyone with career options choose to work for AOL? He might as well have posted a billboard declaring, "Top talent not wanted."

59 points by rsobers 13y ago

roderick3427 13y ago

I wouldn't have expected this sort of behavior from a big tech company like AOL.

a3n 13y ago
This is the guy that publicly fired someone during a conference call without a moment's thought, at the snap of a neuron, and without whatever procedures were in place at his company. You should expect this kind of behavior from him 24/7.
timje1 13y ago
Is this the same AOL that still gets a good chunk of money each year from people that never cancelled their 56k internet subscription when they got ADSL? I think AOL is one large moral-free zone.
- gdulli 13y ago
  Why is it a moral failing for AOL to leave it up to its customers to be responsible for the decision of what services they do or don't need?
  - normloman 13y ago
    Because their cancellation policy is intentionally designed to make it nearly impossible to cancel your AOL account. http://www.nytimes.com/2005/08/29/technology/29link.html?pagewanted=all http://www.nytimes.com/2005/08/29/technology/29link.html?pag... I think they might have changed things in recent years, but it's still not easy to cancel your AOL subscription.
  - selmnoo 13y ago
    It's not that they're "leaving it up to its customers to be responsible", it's strategically employing black patterns to exploit specific mistakes people make. Are you 100% on top of your every bill? Do you know everything going in and going out of your bank account? Have you made any mistakes in looking over something? My friend's dad is a CFO of a Fortune 500 company (and is a generally well-reputed guy) - I recently found out that he's pretty bad at managing his home finances - forgets to pay credit bills and all that. This shit just happens. I'd rather that I deal with a company that doesn't try to actively exploit me on my weaknesses. The companies that do this have a bad character and I wish they just didn't exist.
    - gdulli 13y ago
      > Are you 100% on top of your every bill? If I wasn't, I sure wouldn't blame anyone but myself for it. I wouldn't blame the company I willingly gave money to due to my own oversight. And I wouldn't be surprised if they didn't call me and ask me to stop paying them.
  - timje1 13y ago
    If the customers are actively paying for a service that AOL is providing, despite not needing that service anymore, AOL has an obligation to mention that to them. Otherwise AOL is exploiting the technological ignorance of their own customers, which is immoral. If AOL's logs show that a customer hasn't used their service in more than a year, it would be trivial to send out a 'are you sure you still need us?' letter to each of them.
  - ben010783 13y ago
    I think he was just using that as one example of AOL's questionable business practices. The company has been known for things like charging customers for service they don't need, making it difficult to cancel service, and pumping out a large volume of low quality content (pulled from original sources) to get higher search rankings.
wtbob 13y ago
IBM went to the EOY lump-sum 401(k) plan awhile back.

a3n 13y ago

Nut.

givehimagun 13y ago

They make 1.04 billion in profit each year and 9 million has him worried? It also seems to be a breech of trust that he outed 2 women and their children in this. I wonder if coworkers will have any backlash against these women. If that does happen it then it could easily become grounds for a lawsuit against AOL. Also they spent $405 million on an acquisition in August (8 months ago): https://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL https://en.wikipedia.org/wiki/List_of_acquisitions_by_AOL

vikas5678 13y ago
Yes, I was thinking the same. Clearly in a company, everyone will eventually find out who these women are, so although he didnt break any laws by revealing their names, these women are probably feeling pretty targeted right now.
bilbo0s 13y ago
I have to admit... the baby thing really bothered me. If you want to make a political statement against Obama... fine... I get it. But why drag two innocent families into this? What were these people supposed to do??? NOT try to help their children??? That was a very classless maneuver on AOL's part. Just state that your medical benefit costs were higher than expected this year. Don't be a douche about the whole thing. I apologize for the rant... just rubbed me the wrong way.
- gcb0 13y ago
  So it served it's purpose. Now instead of getting everyone outraged against benefit cuts for political action, you think that is fine but want reparation for the baby comment. forgot the name of this discourse diatribe, but apparently it's effective.
  - bilbo0s 13y ago
    What do you mean? The entire REASON we're outraged is because we REALIZE it was nothing more than political! If that is a technique they teach... all I can say is that it doesn't work very well here on HN. Benefit cuts for political action has lost A LOT of support around the tech industry today.

protomyth 13y ago

Well, the "distressed babies" comment is par for the course from Mr. Armstrong. He is not doing any other tech companies CEO any favors. He does remind me of the one psycho that attends a peaceful protest, but gets all of the press coverage to show the protest in a bad light. He says foolish things so he is the representative of all tech CEOs in an unfriendly, as of late, press. As to the health insurance, yes, its going to go up for most and with higher deductible and premiums. All the rhetoric now meets the pavement.

jbooth 13y ago
Health insurance has been increasing by ~9% a year since the late 1990s. Obamacare is predicted by the CBO to bend the cost curve in the right direction but it's not going to 0% or sub-inflation anytime soon. Anybody blaming their cost structure on Obamacare is just being opportunistic, although I guess I can't blame them. Getting a multi-billion dollar media machine pushing a message makes it persuasive.
- torkins 13y ago
  premiums rose by 4% for 2013, so that's the right direction, even sub 5% edit: http://www.nytimes.com/2013/08/21/business/survey-finds-modest-rise-in-health-insurance-premiums.html?_r=0 http://www.nytimes.com/2013/08/21/business/survey-finds-mode...
  - protomyth 13y ago
    Your pointing to an article based on a Kaiser Family Foundation survey of employers for 2013 without any guidance on 2014 when the ACA changes occur for businesses. A study about a year that the ACA doesn't affect the group being studied is not very informative. study: http://kff.org/private-insurance/report/2013-employer-health-benefits/ http://kff.org/private-insurance/report/2013-employer-health...
    - jbooth 13y ago
      Is the national review less biased? http://www.nationalreview.com/corner/353475/slowdown-health-care-inflation-here-stay-veronique-de-rugy http://www.nationalreview.com/corner/353475/slowdown-health-...

geetee 13y ago

Can someone please explain what a "distressed baby" is in this context? And why did AOL foot a million dollar bill for each and then blame the mothers?

selmnoo 13y ago
Because he's an asshole with a long and illustrious history of doing shit like this? I'm just really sad that we, the programmers and engineers, keep letting people like him climb up the ladder.
- a3n 13y ago
  We, the programmers and engineers, have absolutely no say in the matter. If you wanted that influence you should have been an MBA. We're Morlocks.
  - mattgreenrocks 13y ago
    But the need to professionalize is way overdue: http://michaelochurch.wordpress.com/2012/11/18/programmers-dont-need-a-union-we-need-a-profession/ http://michaelochurch.wordpress.com/2012/11/18/programmers-d...
  - dragonwriter 13y ago
    Nah, programmers and engineers aren't Morlocks to executives Eloi -- when was the last time a programmer or engineer ate a C-suite exec? Serfs, not Morlocks.
pgrote 13y ago
It may relate to prematurity. The cost of hospitalization of a premature baby can be 500K to 1.5 million on average given a 20-40 day stay in the NICU. AOL's insurance would cover it and rates might rise slightly, but it is disingenuous to blame the women. AOL might be self-insured, but I doubt it.
- geetee 13y ago

vikas5678 13y ago

I should point out however, that this 401K match at the end of year practice is already a standard at IBM, which is probably the worst place to work at in the Silicon Valley today.

throwawayandrun 13y ago
...plus nowadays IBM only starts matching after a full year of employment. Worst-case scenario, you could work 1,99 yrs and get nothing.

ryguytilidie 13y ago

It's pretty distressing to me that these people are like "eh, I'll just cut a few million in benefits for ALL MY EMPLOYEES, blame obamacare and pocket it myself." Because we need to get people angry at the idea that their fellow man is getting adequate healthcare!

andzt 13y ago
We have had similar discussions in our own company, which is much much smaller than AOL. It's definitely not directly caused by Obamacare, but we've watched healthcare costs significantly rise over the last few years. And it's mostly these "catastrophic" cases - major surgeries, expensive pregnancies etc. We are try to figure out how we can continue offering great benefits but we'll probably have to make a change. Not to save our billion dollar profits (I wish), but so we can continue to function as a company and employ some great people...
- jbooth 13y ago
  Health insurance costs rose by 131% from 1999-2009[1], which comes out to just under 9% inflation. That's in comparison to an average 2.5% inflation for all goods including healthcare since 2000[2]. 2.5% inflation turns $100 into $128.01 over 10 years. Instead, we got 231. About 10 years ago I was in local government, we laid off teachers every single year in order to keep paying health insurance premiums for the rest of them. More money for less bodies. [1]http://business.time.com/2009/09/16/health-insurance-premiums-up-131-in-last-ten-years/ http://business.time.com/2009/09/16/health-insurance-premium... [2]http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_... (edit: fixed my numbers thanks to twoodfin)
  - Cthulhu_ 13y ago
    That's mostly because there not being any restrictions on health care pricings (as far as I know); the insurance companies don't pressure hospitals to keep costs manageable, the government doesn't prevent health care institutions from charging widely different prices, and nobody stops pharmacy companies from charging exorbitant prices for medication.

ceautery 13y ago

The video did not include any comments about million dollar babies. It did show him saying a 3% match on 401k is a great deal... which it isn't.

deleted 13y ago
[deleted]
FireBeyond 13y ago
Tell that to the very vast majority of Americans who work their entire lives without "employer matching" on their 401k's... Or a smaller but not insignificant number for whom a 401k at all is something dreamt of.
- ceautery 13y ago
  OK. Dear vast majority.... Actually I'm in that boat, too, but of my own doing. At where I work (a large utility in the midwest), we match 75 cents on the dollar up to 6%, so essentially 4.5%. I stopped contributing a few years back to try to get out of debt faster, but kept finding creative ways to add new expenses: wife, new daughter, another new daughter, repair that leaky roof, etc. Still, my point was obvious: 3% is free money that shouldn't be turned down if it's available, but to laud it as something to brag on is really grasping at straws. 6% was the industry standard in my area... and I once worked for a company AOL bought out.

pmorici 13y ago

The distressed babies thing is bizarre since when does a company have to pay extra out of pocket for something like that like Armstrong is claiming? Isn't that the whole point of Insurance, in case something bad happens insurance pays?

pyre 13y ago
More like the cost of that company's plan goes up, but I somehow doubt a company as large as AOL has significant cost increases due to a baby or two that had some special surgeries.
Agathos 13y ago
Most large companies self-insure. They just hire a "health insurance" company to administer the plan.
- andrewtbham 13y ago
  a company i worked for self-insured, but they did have insurance that kicked in at a very high level.

cfesta9 13y ago

I love how he starts the video posted in the article off with "We are in the most intense talent space in the world" Well good sir don't expect to keep any of that talent. This sickens me.

mortov 13y ago

Wow ! Obviously sexual discrimination and workplace bullying are in favor at AOL. Seriously, this sounds like another 'top notch tough businessman' appointed at immense salary. My experience has been the first person normally claiming they are top notch is none other than themselves, and otherwise prosperous companies with generally good prospects seem to bleed money shortly after their arrival (normally into their pockets) and end up as burned out shells being sold off piecemean with some golden parachute to the outgoing top notch guy before he repeats the performance or retires to a recently purchased, by a tax haven based company, island in the Carribean. And as proof of true sexual equality, there are examples where the he is a she.

FireBeyond 13y ago
Of course. The entire company's "hit" from the ACA (I'm making myself a pact now to refuse to call it "Obamacare" again) could have been covered by half of his salary ($12MM before bonuses or stock options).

lxt 13y ago

Wow. A billion dollars in profit, 12 million in his pocket each year...but the 7 million for health care has to come out of the employees' other pocket. Also, the fact that he's blaming two babies - I find it highly unlikely, statistically, that two such cases blew the cost of premiums for a group as large as AOL. I'm pretty sure they had more employees with cancer that year, for example, and that's also super-expensive. This guy is despicable.

gum_ina_package 13y ago
He's not blaming two babies, he simply stated that unforeseen events caused the company's healthcare costs to go up unexpectedly.
- rgrieselhuber 13y ago
  Still disgusting to parade two specific examples like that.
- 727374 13y ago
  Sounds to me like he's blaming the babies or else he could have left them out of it and said something like 'exceptional events'.
  - bilbo0s 13y ago
    That's EXACTLY what he should have done. He should have said, "The cost of our medical benefits package was higher than expected." FULL STOP. I can't, for the life of me, see how anyone could possibly think what that man did was appropriate.
- abarringer 13y ago
  On a group the size of AOL statistics would clearly imply at least two expensive cases per year. To single those cases out is inexcusable. In 2000 I worked at a relatively small company of 50 employees. One person had a baby that cost millions sic. Being a small group we all knew who it was and anticipated our insurance rates increasing. Our rates went up some but not much, and the company president decided to cover 100% of the increase. I greatly admired the company for doing that and now 14 years later I find myself working with the same team on a new startup. The company president has been able to get back most of the top talent from a decade ago because we all respect and admire his leadership.

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gum_ina_package 13y ago

To everyone who's saying "they make X billions in profit each year and can't afford Y million!", that's not the point. It'd be irresponsible of him to simply eat the extra costs. Hopefully, people wake up and realize what a horrible law Obamacare is and demand it be repealed.

astrodust 13y ago
What is wrong with you? Are you suggesting AOL employees should be paid minimum wage?
- a3n 13y ago
  Less. Federal interference in wages is an abomination. /s
- thrownaway2424 13y ago
  I doubt that person supports the minimum wage law.
GoogleCoder 13y ago
Fuck you prick. Eat a dick you fucking shit faced republican. Your kind are the scum of this earth.
- gdulli 13y ago
  Take this kind of shit back to reddit, please. There's no excuse for escalating a difference of opinions like this.

thedaveoflife 13y ago

Obamacare: the perfect scapegoat for large companies trying to cut costs.

dgbsco 13y ago

As an AOL employee, this news and other internal news really, REALLY makes me want to reconsider my options.

bobjordan 13y ago

From my view, this is a case where random big box mgt consulting firm (McKinsey, PWC, Booz) found some loose cash on $xM engagement. Tim then publicly regurgitated much of the internal deck logic. Obamacare may have been his own (questionable) addition - but the two distressed babies was definitely in the deck. Whichever consulting firm it was obviously need's to coach those CxO's better on implementation.

thrillgore 13y ago

And here I was being sympathetic to "healthcare problems" until he threw those two mothers under the bus with that backhanded remark. Has this guy shown no class while at AOL? I'd like to think AOL has made a meteoric turnaround with HuffPost and Patch especially (the content is better than the local papers in my suburban hellhole, which isn't saying much) but maybe I spoke too soon.

ScottWhigham 13y ago

It disappoints me to read the knee-jerk reactions here by those who obviously have not gone through childbirth. To help some of you along, a "distressed baby" would be his way of saying that the mother or baby experienced trauma or were under life-threatening duress either during childbirth or prior. This is not that unusual - things like umbilical cords wrapped around a neck, a small birth canal, and other reasons can cause significant problems during childbirth. How many millions of women and babies have died during childbirth? Half of the commenters here are acting as though childbirth is always a safe process. The guy used a term that the writer of the article took offense to and you guys are making a huge deal of it. Get over it. Imagine yourself having to tell the same story to 100 reporters 100 times over two days. You'd try different ways of saying it and, no doubt, at least one of those times you'd use a word or phrase you wished you could take back. If you're unhappy that he's bitching about paying for healthcare, fine - let that be why you complain. But stop falling for the buzzfeed/linkbait BS titles and "tricks" that authors use to try to make stories facebook-worthy.

phillmv 13y ago
It's not about whether the babies are having a bad time, it's about the breach in privacy involved in referring to the health issues that two of his employees underwent, and directly blaming them for the health premiums.
nitrogen 13y ago
From what I've read, people who have to tell once.the dame story 100 times over two days are supposed to have a list of talking points that they memorize and refuse to deviate from the list, and/or hold a press conference to tell everyone at once.

GuiA 13y ago

"For employees leaving to go to other employers, not matching those programs was probably the last thing on the list for us in terms of employee benefits that we wanted to keep." I can't imagine what must be at the top of the list if "no healthcare" is a the bottom. Sounds like even the CEO agrees that AOL is a shitty, shitty place to work for.

sebnukem2 13y ago

Someone at work gave me her email address, and it was an AOL address. I felt like I had discovered a new living fossil, still in her thirties (guessing). And that's how I know that AOL, somehow, is still kicking.

uptown 13y ago

What right does Mr. Armstrong have revealing private medical details about policy-holders to the public?

robodale 13y ago

If I was a woman working there...I would GTFO. Hell, if I was any female/male/other working there, I would GFTO.

karmelapple 13y ago

If you'd like to let him know what you think about this, be sure to check him out on twitter @timarmstrongaol https://twitter.com/timarmstrongaol https://twitter.com/timarmstrongaol

flashgordon 13y ago

On a semi-related note, what makes fetal distress cost a million dollars to recover from? I would have thought by now this should have been part of every pediatricians runbook. I am not any where savvy with medicine and also apologize in advance if this sounds insensitive. That is not my intention. I am curious as to what would make these costs be so high.

dougabug 13y ago

Why would anyone with career options choose to work for AOL? He might as well have posted a billboard declaring, "Top talent not wanted."