"Distressed babies"
February 9, 2014 9:59 AM Subscribe

AOL chief cuts 401(k) benefits, blames Obamacare and two "distressed babies". "AOL chief executive Tim Armstrong Thursday offered a number of unusual explanations for why his company pulled back its 401(k) benefits for employees this year. The first reason: Obamacare. The second: two women at the company who had 'distressed babies' in 2012."

AOL chief reverses changes to 401(k) policy after a week of bad publicity

"The leadership team and I listened to your feedback over the last week," Armstrong wrote in his e-mail to the company. "We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution."

My Baby and AOL’s Bottom Line

Late last week, Tim Armstrong, the chief executive officer of AOL, landed himself in a media firestorm when he held a town hall with employees to explain why he was paring their retirement benefits. After initially blaming Obamacare for driving up the company’s health care costs, he pointed the finger at an unlikely target: babies.

Specifically, my baby.

[...]

I take issue with how he reduced my daughter to a "distressed baby" who cost the company too much money. How he blamed the saving of her life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting.

[...]

Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012—felt the need to announce a cut in employee benefits on the very day that he touted the best quarterly earnings in years. For me and my husband—who have been genuinely grateful for AOL’s benefits, which are actually quite generous—the hardest thing to bear has been the whiff of judgment in Armstrong's statement, as if we selfishly gobbled up an obscenely large slice of the collective health care pie.

Yes, we had a preemie in intensive care. This was certainly not our intention. While he’s at it, why not call out the women who got cancer? The parents of kids with asthma? These rank among the nation’s most expensive medical conditions. Would anyone dare to single out these people for simply availing themselves of their health benefits?

[...]

Our daughter has already overcome more setbacks than most of us have endured in the span of our lives. Having her very existence used as a scapegoat for cutting corporate benefits was one indignity too many.

posted by tonycpsu (213 comments total) 53 users marked this as a favorite

Meanwhile.
posted by Potomac Avenue at 10:02 AM on February 9, 2014 [1 favorite]

From 2008: Million-Dollar Babies
posted by meehawl at 10:04 AM on February 9, 2014 [4 favorites]

Well, so much for my continuing to use AOL's products. HAHAHAHAHAHAHA
posted by Stonestock Relentless at 10:05 AM on February 9, 2014 [78 favorites]

Oh, god, because we needed another rationalization for scapegoating women and mothers in the workforce.
posted by BrashTech at 10:05 AM on February 9, 2014 [33 favorites]

Neonatal Bioethics
posted by meehawl at 10:08 AM on February 9, 2014 [1 favorite]

Excellent work, corporate America. Although next time, let's make stealing candy from their hands an actionable, ok? Great.
posted by The River Ivel at 10:08 AM on February 9, 2014 [4 favorites]

This is exactly why an individual's health care should not have to rely on having a job. I hope stories like this are one of the many small steps needed to get America on a nationalized health care system.

Because fuck this shit and the jackasses who perpetuate it.
posted by Brandon Blatcher at 10:12 AM on February 9, 2014 [200 favorites]

Every time someone uses the "Obamacare made me do it" excuse to screw people over (and make themselves richer) I want to scream and then punch something.
posted by littlesq at 10:12 AM on February 9, 2014 [29 favorites]

This is cartoonishly evil.
posted by Hop123 at 10:13 AM on February 9, 2014 [15 favorites]

It's not entirely clear, but it appears that what happened is this: AOL has its own single employer health plan and self-insures. I'm inferring from the news stories that AOL used to have a lifetime benefit max for the insureds. ACA banned those lifetime caps, so AOL had to absorb all of the cost of those procedures.

If that's right, then his statements are even more grotesque than they first appeared, since he was bemoaning the fact that AOL had to pay out the claims rather than letting them bankrupt a family.
posted by jpe at 10:14 AM on February 9, 2014 [61 favorites]

Well, so much for my continuing to use AOL's products. HAHAHAHAHAHAHA

Aol* is bigger than you probably realize. Have you recently visited Huffington Post, Engadget, or TechCrunch? These and more are Aol brands. This decision is potentially much farther reaching than most would guess.

* in 2009, AOL was re-branded as Aol.
posted by filthy light thief at 10:16 AM on February 9, 2014 [13 favorites]

You know, on one hand I really don't want to be the kind of person who wishes ill on anyone, even complete assholes, but man you are making it really hard NOT to create an exemption, AOL idiot.
posted by bitter-girl.com at 10:16 AM on February 9, 2014 [6 favorites]

Also of note: because Aol (or AOL Inc.) is so big, the impact of two "distressed babies" is really quite small. That's the basic beauty of insurance - spread the costs to offset those who have greater, unexpected needs.
posted by filthy light thief at 10:20 AM on February 9, 2014 [6 favorites]

You can't spell A-hole without Aol.
posted by Thorzdad at 10:20 AM on February 9, 2014 [46 favorites]

Isn't this the same guy that collected a $12.1 million salary for 2013?
posted by Mary Ellen Carter at 10:21 AM on February 9, 2014 [8 favorites]

Well, so much for my continuing to use AOL's products. HAHAHAHAHAHAHA

If you use the internet at all chances are you are using AOL's products, or rather, you as a media consumer are one of their products since they are one of the largest ad networks.
posted by windbox at 10:22 AM on February 9, 2014 [3 favorites]

(But it seems no one really paid much mind to the rebranding of AOL to Aol, as news media still refers to the company as AOL, and the company clearly hasn't issued repeated or broad notices that "that's not how we style our name any more" /tangent)
posted by filthy light thief at 10:22 AM on February 9, 2014 [2 favorites]

Every time someone uses the "Obamacare made me do it" excuse

Just wait until the employer mandate actually kicks in.
posted by Ardiril at 10:22 AM on February 9, 2014 [2 favorites]

This is a corporate meme that is fairly common. Normally, though, CEOs don't have such foot-in-mouth disease... instead, I've heard factoids like these spewed by HR or insurance broker personnel at yearly benefits meetings at two different companies I've worked at over the past few years.

In fact, one instance was last year as ACA began to roll into effect. The company here I work at (which I will not name, because I greatly enjoy my company on the whole), brought in the insurance broker from an outside company to talk about changes to our plan and why premium prices had jumped.

The reason cited for all of us by the moronic broker was that our company had "too much utilization, including many people having babies, and a couple of expensive hospital situations."

Being a fairly small company of just several hundred, most people were fairly well aware of the cases the broker was talking about. I didn't speak to any of the mothers or recovering people personally as most of them were in different departments, but I would've been mortified if I was them.

The other reason why we were told that our prices skyrocketed was because the insurance company was "not quite hitting their targeted 80%." I wanted to stand up to everyone to explain to them what this meant and why 80% is targeted, but I resisted the urge to blow my stack and stayed in my seat.

I'm confident our own HR staff or CEO would've never made those comments, because they are sharp people, but wow, that broker was unprofessional. I haven't seen that broker again this year so I would bet the company heard from employees about all this. Still, it boggles the mind.

The point is that this is not just AOL and one dumb CEO. This kind of scapegoating happens everywhere. Everyone... you're all paying way more money this year! And it's her fault, her with the baby that died. And you, too- you with the cancer. And you, going to the doctor when you're sick. Assholes costing us all money!
posted by Old Man McKay at 10:23 AM on February 9, 2014 [62 favorites]

You know, if two babies costing $1M a piece affect the bottom line so much that a company screws everyone for WAAAAAY more than $2M, said company should really look into self-insurance. It might have a high setup cost, but realistically - two million dollar babies shouldn't affect the overall healthcare cost kitty that much. They've got over 5,000 employees... Its hard to imagine that if AOL brought in their own doctors and nurses to cheapen out their well visits, that they established a relationship with one or two hospitals, that they couldn't have better cheaper coverage than what they are facing now with whatever insurance agency is apparently scalping them enough that they can't afford to properly contribute to a 401K - even when they have to handle a handful of costly healthcare exceptions.
posted by Nanukthedog at 10:24 AM on February 9, 2014 [3 favorites]

Mary Ellen Carter: Isn't this the same guy that collected a $12.1 million salary for 2013?

In response to that question, Gawker's Valley Wag provides an inforgraphic: Tim Armstrong's Salary, in Distressed Babies (NOTE: does not contain pictures of actual babies, distressed or otherwise).
posted by filthy light thief at 10:24 AM on February 9, 2014 [17 favorites]

The second: two women at the company who had 'distressed babies' in 2012.

Though it's fairly clear that Deanna Lei, who gave birth to a 'distressed baby', does not work for AOL, her husband does.
posted by jeather at 10:25 AM on February 9, 2014 [2 favorites]

So this guy is not only selfish enough to blame babies, but also stupid enough to blab about it? Is there an AOL Board of directors? Cuz y'all need to go CEO shopping. Find someone who's not quite so transparent when it comes to the whole corporate greed, yo.

In a way, it's almost a perfect storm. Reprehensible human makes reprehensible statement, and reprehensible company has to reverse reprehensible policy.
posted by valkane at 10:26 AM on February 9, 2014 [6 favorites]

What's surprising to me, a little, is that this kind of health shaming is a revelation to people. The business one of my parents works for switched to a high deductible, high cost plan after a year that included claims for a motorcycle accident and several surgeries-- which was publicly discussed and debated among the company. My own job alludes to this when they discuss possible changes to our plans-- as if we are rewarded with good coverage for not being in car crashes or the year no one's kid gets cancer. It's sick and it's wrong. My sibling's cancer was no one's fault. The hip replacement my colleague needs is not his fault. The benefits of having them be healthy and productive for decades may not be realized by their current employers, but we as a society will be better for it-- and we as a society should provide that care.
posted by jetlagaddict at 10:26 AM on February 9, 2014 [39 favorites]

Honestly, I think that he's just tone deaf enough that he was looking for something sympathetic to use to justify the cuts--look, we're being so good to people that we're struggling to keep up! Like nobody was going to pay any attention to his net worth, personally, they were just going to take this as a reflection of the good deeds of the company and accept the cuts as the price of working somewhere that's good to its people. But it's not really somewhere that's good to its people; it's somewhere that pays enough lip service to that to try to stay competitive with Google and a billion tech startups, but the corporate culture is just not authentic.

I have a friend who used to work there and I'm glad they're out and on to places that have a future. Huffington Post is definitely not going to be the model that brings back their golden days, and that means that what they have ahead of them is very likely to be a lot more cuts. Well, "they" meaning the riff-raff, not Armstrong himself.
posted by Sequence at 10:26 AM on February 9, 2014 [2 favorites]

The really ironic thing? If we weren't stuck with the halfway measure of the Affordable Care Act, and instead had universal health care, we wouldn't be having these discussions about health care-related cutbacks.
posted by filthy light thief at 10:27 AM on February 9, 2014 [80 favorites]

Christ, what an asshole.
posted by drhydro at 10:27 AM on February 9, 2014 [12 favorites]

DirtyOldTown: I don't even understand argument like this guy thinks he's making. Is he saying, "This would all be cheaper if we could just let the really sick babies die"? And he thinks that is a thing other people might agree with?

I tried to think about it, but I don't think there's any message to take from what he said aside from "Next time please just let your baby die", except possibly "You don't make enough money to have children".
posted by Mitrovarr at 10:28 AM on February 9, 2014 [14 favorites]

It's incomprehensible he would even think this is okay to say out loud. It reminds me of the Matt Braunger bit: "...what my brain told my mouth to say, and my mouth was like, 'Fuck it: send it. I hate this guy, too.'"
posted by DirtyOldTown at 10:31 AM on February 9, 2014 [6 favorites]

For comparison purposes, HuffPo was touted as supposedly going to hit $66mil in operating profit by 2013, and estimates have them as losing about $6 mil, or three times as much as was spent on the babies in question. But we can't go thinking that maybe the company made bad business decisions or anything. This is why I feel like it was probably a really misguided attempt to pin the financial difficulties on something that people actually wouldn't object to, versus inviting the question of whether being a media company is actually a good thing after all.
posted by Sequence at 10:32 AM on February 9, 2014 [4 favorites]

"... as we discussed the matter over several days, with management and employees, ..."

...we determined that there was no way to get away with screwing the employees over without the whole thing blowing up in our faces; therefore...

"... we have decided to change the policy back."
posted by Greg_Ace at 10:33 AM on February 9, 2014 [4 favorites]

Armstrong is the clown who fired a top level exec in a conference call. One wonders how empty of talent, how desperate for basic competency the Fortune 100 is if dolts like this still have jobs. In the other thread, on IBM, the content is a long series of articles by Robert Cringely about how IBM has spent the last decade cannibalizing itself to keep Wall St. happy, and Wall St. is quite knowingly rewarding the auto-cannibalization because the investors got out long ago and it's now the traders driving the price.
posted by fatbird at 10:33 AM on February 9, 2014 [21 favorites]

It's just another reason why our country's scheme of employer provided health insurance continues to be a bad idea. It's too bad the ACA appears to do nothing but perpetuate this scheme.
posted by gyc at 10:35 AM on February 9, 2014 [12 favorites]

I'm glad I work for a non-profit.
posted by oddman at 10:35 AM on February 9, 2014 [1 favorite]

I mean, on the one hand, this is terrible, but on the other hand, in a certain light, it does seem like getting rid of distressed baby Tim Armstrong would save Aol a lot of money, so...
posted by prefpara at 10:37 AM on February 9, 2014 [28 favorites]

My favorite was when one place I worked announced that our health care cost were going up "because of some large claims" within a week of asking us to donate PTO to another employee to allow care of a sick child. Subtle. I don't remember if the employee in question was called out by name. It was certainly known though.

Moral of the story: Never work for a company where the CEO quotes Ayn Rand at company meetings.

Other moral of the story: Single payer. Why are we still talking about this?
posted by stet at 10:38 AM on February 9, 2014 [19 favorites]

gyc: "It's too bad the ACA appears to do nothing but perpetuate this scheme."

It continues the scheme because of political necessity, but the law actually has many provisions that help expand the government's regulation of and foothold into public health insurance, as well as increasing the size of public sector investment through the Medicaid expansion.
posted by tonycpsu at 10:38 AM on February 9, 2014 [5 favorites]

The babies, I knew it was them! Even when it was the bears, I knew it was them.
posted by Flunkie at 10:41 AM on February 9, 2014 [11 favorites]

The conclusion I draw are:
1) If he's talking about it, he may have thought the mood of the country was that it would be OK. So is the mood that close to it that he'd misjudge?
2) What percent of CEOs are doing the same but are not making that mistake.
posted by Obscure Reference at 10:44 AM on February 9, 2014 [3 favorites]

Armstrong isn't just the clown who fired someone in a conference call, he's the clown who created the massive loss that resulted in the conference call. He really doesn't have much business being a CEO - between incompetent HR activities and failed businesses what, exactly, are his strengths?
posted by combinatorial explosion at 10:46 AM on February 9, 2014 [8 favorites]

From the first link: The stock, which reached $51 on Thursday morning because of a good earnings release by AOL, fell to 47.15 by the end of regular trading. It's down another 2.5 percent Friday.

How much is that in distressed babies? I can't find an online converter.
posted by rtha at 10:49 AM on February 9, 2014 [9 favorites]

Maybe they'd be better off with one of the distressed babies as their CEO?
posted by Anne Neville at 10:50 AM on February 9, 2014

Is he saying, "This would all be cheaper if we could just let the really sick babies die"? And he thinks that is a thing other people might agree with?

Or: if the sick babies' parents really want them to live so badly, they can pay the multimillion-dollar hospital bills themselves, and if they can't afford multimillion-dollar hospital bills, they shouldn't have had babies in the first place, because FREEDOM.
posted by scody at 10:52 AM on February 9, 2014 [28 favorites]

I vaguely know Tim Armstrong from working at Google. Not well, but was in a few meetings with him. He struck me as your usual aggressive sales bro, albeit the bro in charge. He was good at his job. It's been painful watching him at AOL. And then things like this quote are just hideous. Even if you really do have to gimmick your 401k you don't say blame it on employees, you don't talk about individual employee's health situations, and you definitely don't get quoted in the press.

It's interesting to me that both this fiasco and the firing happened in intracompany events. Nominally these things are private, not for the press, although with 500+ people listening in anyone speaking knows it could leak. Part of me wonders if there's some conspiracy to amplify complaints about Armstrong to get him fired. But both quotes are just so awful and inhumane, probably some random employee with a conscience was disgusted enough to go to the press.

I mean seriously, "we are screwing with your 401k because someone had a premature baby". What kind of monster says that?
posted by Nelson at 10:54 AM on February 9, 2014 [31 favorites]

Or maybe this kind of thing could be an excuse for corporations with actual muscle due to number of employees to enforce some kind of clampdown on costs at the provider end? Naaaaaaah. Much easier to suck it out of the employees and blame the sick babies.
posted by immlass at 10:55 AM on February 9, 2014 [1 favorite]

If only there had been death panels, right?
posted by Nonsteroidal Anti-Inflammatory Drug at 10:56 AM on February 9, 2014 [7 favorites]

Hand, foot, & mouth disease is going around among babies now. My toddler had it a couple of weeks ago. Obviously, Tim Armstrong has it, too. That would also explain his hate for babies.
posted by Anne Neville at 10:56 AM on February 9, 2014

The entitlement of CEOs is reaching a fever pitch over the last few years. Feels like there's a direct line from Romney's 47% video to writing long opinions pieces about taxation being Kristalnacht to blaming employees for using benefits and publicly shaming them.

(The last time I saw my company's CEO at a corporate gathering, there were extra rent-a-cops and she had a personal linebacker dude who was packing heat. To talk to employees.)

I think maybe his words were better in the original Dickensian, where "They should die, and decrease the surplus population."
posted by fifteen schnitzengruben is my limit at 11:00 AM on February 9, 2014 [17 favorites]

Hey corporate America, if you don't like paying to look after your employees and their families, this would be an excellent time to start lobbying for single-payer healthcare.
posted by dry white toast at 11:01 AM on February 9, 2014 [92 favorites]

The best part is, after all this, I'm sure they'll still try to claim their company supports 'family values'.
posted by Mitrovarr at 11:01 AM on February 9, 2014 [4 favorites]

~I mean seriously, "we are screwing with your 401k because someone had a premature baby". What kind of monster says that?

~Or maybe this kind of thing could be an excuse for corporations with actual muscle due to number of employees to enforce some kind of clampdown on costs at the provider end? Naaaaaaah. Much easier to suck it out of the employees and blame the sick babies.

The illogic of it all is, of course, that 401k contributions should have nothing whatever to do with medical insurance costs. I think what the huge unspoken topic really is here is that Aol is dicking with employee benefits in order to preserve both a pre-determined profit margin as well as executive pay. God forbid Aol bring in 2% less than what Wall Street says they should bring. Better to take it out of employee hides.
posted by Thorzdad at 11:02 AM on February 9, 2014 [35 favorites]

It's worth highlighting what a gimmick the 401k change is. And apparently becoming popular, IBM did it too. By deferring the 401k contribution to the end of the year the employer gets the benefit of the interest on that money during the year. And the employer doesn't pay at all if the employee leaves before the end of the year; probably something like a 15% savings for the company assuming high turnover employees. But it's a confusing enough change I imagine most employees don't really understand it.

So let me simplify: what if your boss said he wasn't going to pay you your wages until the end of the year? And that if you quit before the end of the year, you forfeit the entire year's earnings?
posted by Nelson at 11:03 AM on February 9, 2014 [34 favorites]

Thorzdad: "God forbid Aol bring in 2% less than what Wall Street says they should bring. Better to take it out of employee hides."

Perversely, the 401k itself exists to fatten Wall Street margins by increasing the number of people investing in the market, and in particular, the number of relatively clueless people (with respect to investment decisions) investing in the market that can be taken advantage of. So they get you coming and going.
posted by tonycpsu at 11:06 AM on February 9, 2014 [16 favorites]

dry white toast: "Hey corporate America, if you don't like paying to look after your employees and their families, this would be an excellent time to start lobbying for single-payer healthcare."

Well and if they don't want to fund 401k programs, they could lobby for increasing Social Security to the point where people could live on it.
posted by octothorpe at 11:06 AM on February 9, 2014 [22 favorites]

My experience has been there are two things the upper management of most large, US-based corporations hate more than anything:

1. Their employees.
2. Their customers.
posted by valkane at 11:07 AM on February 9, 2014 [55 favorites]

I vividly remember the previous Tim Armstrong thread. I didn't think I could possibly have a lower opinion of Armstrong than I did then, but, uh, way to exceed expectations, Tim.
posted by Metroid Baby at 11:12 AM on February 9, 2014 [15 favorites]

Other moral of the story: Single payer. Why are we still talking about this?.

Three reasons:

1) The American government is unable to make laws without the permission of corporations
2) Corporations have no interest in saving the United States taxpayers money, or paying taxes, or saving lives, or improving quality of life unless it is somehow profitable
3) Virtually all popular media are owned by corporations, so you're never going to hear about 1 or 2

In an economic system where money trumps all other possible values, it should come as no surprise that corruption and incompetence have sent American scores very low for our health care system / education system / income equality in the OECD, despite having one of the best GDP per capita numbers on the planet.
posted by deanklear at 11:14 AM on February 9, 2014 [43 favorites]

Hey, Tim: YOU'VE GOT FAIL.
posted by jquinby at 11:14 AM on February 9, 2014 [46 favorites]

I mean seriously, "we are screwing with your 401k because someone had a premature baby". What kind of monster says that?

They are all monsters, but sometimes the mask comes off...
posted by ennui.bz at 11:15 AM on February 9, 2014 [8 favorites]

And he's blaming Obamacare for "premiums should rise by less than one percent." That's less than my health care premiums ever rose on any year well before Obamacare and I find it impossible to believe that my (admittedly much smaller) employers were out of the normal range there. Hell, there were some years in the mid aughts where our health insurance premiums went up more than 10%. So not only is this ridiculously, cartoonishly evil, but it doesn't even make any kind of logical sense. Premiums go up by more than that every year, Obamacare and distressed babies or no Obamacare and distressed babies.

Full paragraph quote: Armstrong may have been referring to the potential for premiums to go up under the new health care law. Some plans will have to become more expensive to cover benefits now required by Obamacare. But the consulting firm Aon Hewitt did a study and found that the impact should be the least for large employer plans since those usually already cover the newly mandated benefits. The report estimated that for plans at a big company like AOL, premiums should rise by less than one percent.
posted by mygothlaundry at 11:26 AM on February 9, 2014 [5 favorites]

This is the same dude who championed Patch, which lost Aol, or whatever the heck they're calling themselves, $200 million last year?

He can go suck some rotten eggs.
posted by droplet at 11:27 AM on February 9, 2014 [1 favorite]

What kind of monster says that? - Union leaders. Just Google "obamacare unions".
posted by Ardiril at 11:32 AM on February 9, 2014

What a lowlife. I hope his business undergoes some "distress" in the coming days
posted by Renoroc at 11:33 AM on February 9, 2014

This is the same dude who championed Patch, which lost Aol, or whatever the heck they're calling themselves, $200 million last year?

He is one of Patch's cofounders.
posted by junco at 11:35 AM on February 9, 2014 [1 favorite]

Just Google "obamacare unions".

Every single article in the top ten on my result for that is either ( a ) whiny right-wing editorials on unions, or ( b ) a Fox "news" story. So, not so much.
posted by maxwelton at 11:36 AM on February 9, 2014 [27 favorites]

The douchbaggery of corporate america is astounding sometimes.
posted by freakazoid at 11:38 AM on February 9, 2014

The ACA has become the go-to justification for just about anything that corporatist douches want to get away with. I wouldn't be surprised to see it used pretty soon as an explanation for why environmental degradation was "unavoidable".

If the Dems try to run from Obamacare, they will be slaughtered in retreat.
posted by mondo dentro at 11:38 AM on February 9, 2014 [1 favorite]

Tim Armstrong should take a look at where life has led him, and how corporate America has eroded his values. I think he'd be much happier if he went back to being a Vigilante sidekick.
posted by TheWhiteSkull at 11:39 AM on February 9, 2014 [3 favorites]

I have friends who've been through the totally insane life-shattering existence of parenting a preemie; have nearly been a father to one myself when my wife went into labour at 25 weeks; hate 'tech innovator' loudmouth moron TED-viewing CEO bros; am forced to live under hypercapitalism.

Consider me triggered.
posted by colie at 11:39 AM on February 9, 2014 [16 favorites]

"In other words, we experienced exactly the kind of unforeseeable, unpreventable medical crisis that any health plan is supposed to cover. Isn’t that the whole point of health insurance?"
Good for her for speaking up and calling Armstrong out on this.

Scapegoating preemie babies? Seriously? Dude needs to hire a sane publicist who has the mental wherewithal to say, "Uh... no." every single time he gets the urge to open his mouth and jam in a loafer.
posted by zarq at 11:40 AM on February 9, 2014 [4 favorites]

No, dude needs to be fired.
posted by MartinWisse at 11:50 AM on February 9, 2014 [12 favorites]

Seriously, fuck everyone reducing human life to a dollar amount.

I have a nephew that was a micro-preemie. And trust me when I tell you, you know NOTHING about your family until you see them go through the months of going back and forth to NICU.
posted by DigDoug at 11:52 AM on February 9, 2014 [9 favorites]

The illogic of it all is, of course, that 401k contributions should have nothing whatever to do with medical insurance costs.

Money being fungible, a dollar spent on retirement is the same as a dollar spent on health bemefits.
posted by jpe at 12:01 PM on February 9, 2014

Can't really comment on the specifics of this story (ask me in chat), but AOL stock is up 200% in four years. He's not going anywhere.
posted by empath at 12:05 PM on February 9, 2014 [1 favorite]

Saying this to your employees is evil. Saying this to your employees, when those employees are very successful gossip-mongers with a massive online following, is just idiotic.
posted by miyabo at 12:09 PM on February 9, 2014 [3 favorites]

Money being fungible, a dollar spent on retirement is the same as a dollar spent on health bemefits.

And, as it turns out, the same as a dollar spent on CEO pay.
posted by jeather at 12:12 PM on February 9, 2014 [30 favorites]

jpe: " Money being fungible, a dollar spent on retirement is the same as a dollar spent on health bemefits."

Well, yes and no. From the employer's end that may be true, but the decision to pay out 401(k) in a lump sum hurts employees for reasons Nelson highlights above. The less duplicitous response (accepting arguendo the ridiculous notion that two babies could create a measurable increase in the cost when spread across thousands of employees) would have been to have employee contribution for the health coverage increase. The fact that they went after the 401(k) suggests they wanted to hide the ball.
posted by tonycpsu at 12:12 PM on February 9, 2014 [3 favorites]

I don't think that he put his foot in his mouth at all. I think that he was talking like he does with his executive team. In that bubble...everyone agrees...everyone understands that the truth is what they determine it is. It can be stunning to be outside of that bubble where the truth is defined differently. I guarantee that there are MANY other CEO's speaking the same way, just not to the public.
posted by zerobyproxy at 12:17 PM on February 9, 2014 [8 favorites]

Holy shit! Scrap my comment... they are self- insured. The rarity of these costs are exactly the reason that they self insured. Here is a company with $2.3199B in revenue (source 4th quarter SEC filings) and this guy can't find $2M? I mean, I get it - its not profit that I'm looking at in that number, but even just recording that as $2.3179B is pretty much explained as a modeling error for accountants. Either way, its 6% growth over 2012. $2M and baby blame.

Folks at AOL: start looking for new work now, so you lose less of your contribution AND you'll be able to make up most of next year's bonus at your new company.

That decision is just greed, greed and fuck you I got mine. Here's a list of AOL Brands.
posted by Nanukthedog at 12:24 PM on February 9, 2014 [9 favorites]

I'm happy to see that so many people think it's evil for the head of an organisation to say to the community "hey we had some sick babies that needed some really expensive medical care and everyone has to kick in and pay for it."

That's not what happened here. What happened here was that the CEO decided his profits were "suffering" too much because of the medical costs of these two premature children that he would revise the 401k rules so that if you leave your job at any point during the year before December 31, you get nothing.
posted by roomthreeseventeen at 12:31 PM on February 9, 2014 [12 favorites]

i expected more from rancid's frontman
posted by klangklangston at 12:33 PM on February 9, 2014 [32 favorites]

"I'm happy to see that so many people think it's evil for the head of an organisation to say to the community "hey we had some sick babies that needed some really expensive medical care and everyone has to kick in and pay for it."

Why is doing it on a national level different than doing it on an corporate level?"

Uh, because it's bullshit and anyone with even a modicum of critical thinking skills should be able to read the articles posted and articulate why.
posted by klangklangston at 12:34 PM on February 9, 2014 [10 favorites]

Also because, as pointed out upthread, money is fungible, and $2M spent on medical care for premature babies cannot be the sole financial hardship facing AOL this year because they had many other expenses. He could have easily stood up there and said we're reducing your 401k benefits because my salary was $12M this year which is $2M more than we can afford. He chose to scapegoat the very personal, very sensitive health and family situations of AOL employees because premature babies aren't a business decision and therefore "not his fault." This is victim speak of the absolute highest degree.
posted by telegraph at 12:42 PM on February 9, 2014 [79 favorites]

"I'm happy to see that so many people think it's evil for the head of an organisation to say to the community "hey we had some sick babies that needed some really expensive medical care and everyone has to kick in and pay for it."

Because he didn't say "everyone" has to kick in and pay for it, he said, to his employees, "you need to kick in and pay for it." His compensation plan wasn't going to change.
posted by straight at 12:43 PM on February 9, 2014 [5 favorites]

I'm happy to see that so many people think it's evil for the head of an organisation to say to the community "hey we had some sick babies that needed some really expensive medical care and everyone has to kick in and pay for it."

He said "you guys need to kick in and pay for it, even though I could pay for all of it myself and still be earning 10 million dollars." He said "you guys need to kick in and pay for it, but the shareholders had an excellent quarter and we don't want THEM to pay for it." It isn't everyone who is paying, and even among those who do pay, I'm not sure it's a particularly progressive paying -- like a single payer health care would be, assuming the progressive taxation rates generally in use -- because 401k benefits are capped.
posted by jeather at 12:59 PM on February 9, 2014 [7 favorites]

"Everyone" except for him, senior execs, the board, the shareholders...
posted by rtha at 12:59 PM on February 9, 2014 [2 favorites]

When I was a grad student, about 10 years ago, the grad student union rep sent out some similarly offensive things about health care to the effect of: "we had to slightly cut benefits this year because a family had huge costs due to their child, and the insurance company raised our rates, but don't worry they won't be on the insurance next year". It doesn't take being a CEO to be completely heartless and violate people's privacy.

Apparently rate factors, the rate changes that health care providers use to change their rates based on how much you used health insurance, are going away THANKS TO OBAMACARE, so our non-self-insured grad student program would not have had to been either cut benefits, and our GSR would not have had to share private matters with every single grad student and try to scape goat a family that had gone through great trauma.
posted by Llama-Lime at 1:03 PM on February 9, 2014 [6 favorites]

Christ, what an asshole.
posted by Catblack at 1:03 PM on February 9, 2014

12 million dollars isn't much for a tech-bullshit CEO bro. He's feeling the shame and that's what's motivated this stuff. We need to pay him more.
posted by colie at 1:06 PM on February 9, 2014 [1 favorite]

Why isn't this a HIPAA violation?
posted by dirigibleman at 1:11 PM on February 9, 2014 [7 favorites]

Why isn't this a HIPAA violation?

Because you're not naming anyone specifically, I think.
posted by roomthreeseventeen at 1:12 PM on February 9, 2014 [1 favorite]

*modem squawk*

Welcome! You've got distressed babies!
posted by dr_dank at 1:18 PM on February 9, 2014

*throws aol coffee coaster away in protest*
posted by pyramid termite at 1:19 PM on February 9, 2014 [7 favorites]

"Do we pass the $7.1 million of Obamacare cost to our employees? Or do we try to eat as much of that as possible and cut benefits?," he said.

But how is cutting benefits not passing the cost on to employees? Am I missing something here?
posted by Sebmojo at 1:22 PM on February 9, 2014 [1 favorite]

My health insurance premiums went up so that my employer could collect personal health information "voluntarily" from employees so that they can game the system and decide what to cover and what not to cover.

It goes like this. If I get a biometric screening, and fill out a personal health assessment form, I'll get an extra $100 in one of my paychecks (minus taxes).

How can the employer pay every employee and their spouses (if covered by insurance) $100 for a finger stick of blood and a survey?

They shifted additional health costs onto employees.

I'm getting my own money back.

They'll pay me (my own money back) to complete some wellness programs, too.
posted by vitabellosi at 1:23 PM on February 9, 2014 [5 favorites]

You know, AOL should just start paying employees in those little silver discs. They must have plenty of them still lying around.
posted by octobersurprise at 1:38 PM on February 9, 2014 [2 favorites]

This nitwit is AOL's "Digital Prophet".

Good riddance, please, let this company die already.
posted by dbiedny at 1:40 PM on February 9, 2014 [7 favorites]

Well at least this sorry episode has brought the amazing David Shing to my attention (the nitwit mentioned above). He's even better than a Chris Morris creation.
posted by colie at 1:49 PM on February 9, 2014 [3 favorites]

SHINGY!
posted by klangklangston at 1:51 PM on February 9, 2014 [5 favorites]

I almost wish I'd been a customer, so I could stop giving them my business.
posted by Ursula Hitler at 1:57 PM on February 9, 2014 [1 favorite]

Paying "Shingy" to talk about "brand utility" has value for Tim Armstrong and AOL. Paying "doctors" to "save children" has no value for Tim Armstrong or AOL.

Why anyone wants to continue to give free money to these self-centered idiots is beyond me. They don't do anything good with it.
posted by deanklear at 2:01 PM on February 9, 2014 [4 favorites]

Because you're not naming anyone specifically, I think.

I guess, but Deanna Fei says that her husband's co-workers immediately said something to him along the lines of "hey, wasn't your daughter one of those two babies?" I don't know if you're really protecting your employee's medical privacy if you don't know his name but everyone knows that you're talking about him.
posted by ArbitraryAndCapricious at 2:13 PM on February 9, 2014 [11 favorites]

The really ironic thing? If we weren't stuck with the halfway measure of the Affordable Care Act, and instead had universal health care, we wouldn't be having these discussions about health care-related cutbacks.

We wouldn't? So we've not had any cutbacks to Social Security or Medicare?
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 2:17 PM on February 9, 2014

Is his finish line, where people have abortions instead of premature babies? Because, Christ, what an asshole.

And I've heard at my own company about the bad person with the expensive problem, so count me in on that one.
posted by sieve a bull at 2:21 PM on February 9, 2014

As someone who beat cancer (to his testicles, no less), Armstrong should have a better appreciation of good healthcare. But I guess that's the effect of all those steroids going to his brains. Or possibly the radiation on the way to the moon and back. Anyway, I think he should quit being a corporate ass and just go back to playing the trumpet.
posted by sour cream at 2:31 PM on February 9, 2014 [11 favorites]

As someone who beat cancer (to his testicles, no less), Armstrong should have a better appreciation of good healthcare. But I guess that's the effect of all those steroids going to his brains. Or possibly the radiation on the way to the moon and back. Anyway, I think he should quit being a corporate ass and just go back to playing the trumpet.

......nah.

I think the lovely combination of Tim Armstrong and Shingy says all that needs to be said about Aol, really. Hopefully others will think so and pull their investments as well.
posted by zug at 2:39 PM on February 9, 2014

Why isn't this a HIPAA violation?

If it falls short of that, maybe it can become the new high bar for the definition of "Hostile Workplace" in harassment caselaw?
posted by radwolf76 at 2:40 PM on February 9, 2014 [9 favorites]

My previous company hired a guy who was about 85% Shingy, down to the unkempt and raggedy-ass appearance. We had the audacity to expect working code from him, though, and he got fired in short order.
posted by sonic meat machine at 2:46 PM on February 9, 2014 [3 favorites]

As someone who beat cancer (to his testicles, no less), Armstrong should have a better appreciation of good healthcare.

I'm sure he does. $13 million buys some fantastic healthcare. In his mind, I'm also sure he believes he's earned it all.
posted by Thorzdad at 2:47 PM on February 9, 2014 [2 favorites]

...For threatening my baby
Unborn and unnamed
You ain’t worth the blood
That runs in your veins

How much do I know
To talk out of turn
You might say that I’m young
You might say I’m unlearned
But there’s one thing I know
Though I’m younger than you
Even Jesus would never
Forgive what you do

Let me ask you one question
Is your money that good
Will it buy you forgiveness
Do you think that it could
I think you will find
When your death takes its toll
All the money you made
Will never buy back your soul...
posted by Benny Andajetz at 2:48 PM on February 9, 2014 [7 favorites]

Nthing the "Christ, what an asshole" sentiment. Seriously, what's the difference in standard of living if you make $10 million vs $12 million? I just wish we'd get more traction on "cap CEO pay" instead of, in a sense, digressions about what assholes say about their employees' families.
posted by TwoStride at 2:49 PM on February 9, 2014

That's the basic beauty of insurance - spread the costs to offset those who have greater, unexpected needs.

You know we've moved the Overton window a wee bit to the right when the idea of a freaking insurance policy starts to sound like... Socialism!
posted by Devils Rancher at 2:50 PM on February 9, 2014 [2 favorites]

Scapegoating preemie babies? Seriously? Dude needs to hire a sane publicist who has the mental wherewithal to say, "Uh... no." every single time he gets the urge to open his mouth and jam in a loafer.

Yeah, Tim Armstrong's real sin here is that saying these terrible things that he believes out loud. If only he could keep acting on his totally vile motivations but not telling everyone about it, things would be great.
posted by indubitable at 2:51 PM on February 9, 2014 [2 favorites]

I work at the very highest levels, privvy to decision-making at a large global corporation, and the powers that be -- sorry, I have to say it, all rich, privileged white men -- will stop at nothing to protect themselves and each other; including keeping the babies distressed and the women in their binders. I hear them making these decisions using smooth language and euphemism, convincing themselves that they are "protecting shareholders". And you know who they are. It's frightening.

They think of me as the "creative," and a hippie because I voice constant and consistent common sense questions like, Will we be capping Executive Pay so we can ask for sacrifices in good faith? They look at me either indulgently like I don't "get" it, or like I am stark raving mad. I can not tell you how many times I've wanted to stand up and scream and holler and quit on the spot.

My small insane consolation is that I am one of the Company's "high-cost claimants" due to breast cancer, and they squirm in discomfort knowing my brand new Stage IV status, as they try and squeeze and contain costs so they may continue to prosper at great health and financial risk to people like me. (Luckily, my new diagnosis renders me untouchable, I now have my job for as long as I want it -- and I can't quit because I need the health coverage, of course.)
posted by thinkpiece at 2:54 PM on February 9, 2014 [47 favorites]

you know how adjuncts are in the labor situation they are in? well, guess what institution is using Obamacare as an excuse to limit workers' hours further? Community colleges, the last bastion of the Republic, ta da!
posted by angrycat at 3:02 PM on February 9, 2014 [1 favorite]

These are the days when the shits are compressed into smaller and smaller spaces to justify people not getting things that everyone should have, no questions asked.

What a glorious time it is. They can't stop people asking for and getting what they want now.
posted by Ironmouth at 3:22 PM on February 9, 2014

That “distressed baby” who Tim Armstrong blamed for benefit cuts? She’s my daughter.
posted by localroger at 3:23 PM on February 9, 2014 [6 favorites]

sour cream: As someone who beat cancer (to his testicles, no less), Armstrong should have a better appreciation of good healthcare.

This guy turned into a real jerk ever since he got back from the moon.
posted by dr_dank at 3:26 PM on February 9, 2014 [6 favorites]

Look:

Tim Armstrong didn't just co-found Patch and encourage AOL to dump hundreds of millions of dollars into it as the future of local news, he co-founded Patch and encouraged AOL to dump hundreds of millions of dollars into it as the future of local news while simultaneously micro-managing it in the most un-local way possible:

Top-down hyperlocal news efforts such as Patch and The New York Times' "Local" blogs have yet to prove successful, but many smaller, locally owned, community news sites are doing quite well. Operating at a smaller scale and with less funding, these smaller sites are finding profits where the biggest players are not.

He strangled his own baby with idiotic decisions like the massive 2011 expansion into highly questionable markets with little local support:

You don’t lose $200 million without botching at least a few of the details, but if there was one mistake that doomed Patch above all the others, it was the decision to ramp up the size of the operation so rapidly, in the absence of any business results to justify doing so. The ability to scale up operations incrementally is one of the major advantages digital start-ups have over their old-media counterparts. Fixed costs make it hard to start a new cable channel or newspaper without some minimal threshold of audience, revenues and capital. Websites don’t have that problem.

And yet Armstrong behaved all along as though Patch did, pushing the network into hundreds of new markets even as the earliest sites were struggling to take root.

And let's not forget the disastrous "Patch 2.0" rollout from Central HQ, which quickly turned into top-down quotas for shitty clickbait that local editors had to match or else.

Seriously, Tim Armstrong strangled his own precious baby with the umbilical cord of his own stupidity, wasting at least a quarter of a billion dollars in the process. And now he has the gall to complain publicly about the medical costs of a worker's premature infant? As an excuse for his own miserable business failure? For his own idiotic, megalomaniacal mismanagement of what might actually have been a good idea?

Fuck you, Tim Armstrong.
Fuck you, Tim Armstrong.
Fuck you, Tim Armstrong.
Fuck you, Tim Armstrong.
Fuck you, Tim Armstrong.

[repeat until blue in the face]
posted by mediareport at 3:27 PM on February 9, 2014 [22 favorites]

lol AOL. Can't believe they're still a thing.
posted by turbid dahlia at 3:27 PM on February 9, 2014

I'm happy to say that I have never before heard of Patch.
posted by miss tea at 3:30 PM on February 9, 2014 [4 favorites]

Five hours on the blue and no one has even mentioned that an employer's health care costs have nothing to do with its 401(k) plan, except for the fact that both cost the employer money. The sheer stupidity of AOL management in making this correlation is magnified by the fact that the WP reporter apparently has no idea that this is the case.

A 401(k) plan is a retirement plan funded by the employee, with before-tax contributions as a paycheck deduction. The employer may choose to match, but is not required to do so. Many private employers pay the match at one specified time during the year, as AOL has announced that it will do. The match with each paycheck was actually a generous benefit while it lasted. But it often doesn't last.

The response that many employers have made to the escalating cost of health care - an undeniable fact - is to institute or increase an employee contribution to the premium. An employee match, in other words, essentially the reverse of the employer match to the 401(k) contribution.

But everyone should keep the two different benefits separate.
posted by megatherium at 3:50 PM on February 9, 2014 [1 favorite]

A lot of people have pointed that out, actually.
posted by winna at 3:54 PM on February 9, 2014 [2 favorites]

I am reminded reading each of these threads that AOL is actually a large media company now, but I can't be the only person who, if asked on the street, would say that AOL disappeared years and years ago. They are like the Edsel of the digital age.
posted by Dip Flash at 3:55 PM on February 9, 2014 [1 favorite]

Nelson clarified the objection above, megatherium:

By deferring the 401k contribution to the end of the year the employer gets the benefit of the interest on that money during the year. And the employer doesn't pay at all if the employee leaves before the end of the year; probably something like a 15% savings for the company assuming high turnover employees...

So let me simplify: what if your boss said he wasn't going to pay you your wages until the end of the year? And that if you quit before the end of the year, you forfeit the entire year's earnings
posted by mediareport at 3:55 PM on February 9, 2014 [1 favorite]

sour cream: "As someone who beat cancer (to his testicles, no less), Armstrong should have a better appreciation of good healthcare. But I guess that's the effect of all those steroids going to his brains. Or possibly the radiation on the way to the moon and back. Anyway, I think he should quit being a corporate ass and just go back to playing the trumpet."

I'm pretty sure that you're confusing Tim Armstrong with Lance Armstrong.

They are two different assholes.
posted by double block and bleed at 4:06 PM on February 9, 2014 [5 favorites]

I'm happy to see that so many people think it's evil for the head of an organisation to say to the community "hey we had some sick babies that needed some really expensive medical care and everyone has to kick in and pay for it."

Why is doing it on a national level different than doing it on an corporate level?

I'm not sure you understand. AOL chose to "self-insure." This means they decided to gamble, to save money by not buying insurance, and then hoped that they could keep that money not spent on insurance by paying for all of their employees claims out of AOL's own pockets. The risk with that bet is that an unexpectedly high medical bill will show up. They gambled and lost and are asking employees to pay for their bad bet -- as usual.

This is much like the "young invincibles" who gamble that they won't get sick and can save the cost of buying insurance and then whine when they have to cough up a $20,000 hospital bill.

The idea of insurance is that you spread the risk of unexpected high medical bills over many people so that no one individual or corporation bears the entire risk. That is why doing it on a national level is different from doing it on a corporate level. AOL is the poster child for that mistake.
posted by JackFlash at 4:06 PM on February 9, 2014 [10 favorites]

And I fail at sarcasm again.
posted by double block and bleed at 4:07 PM on February 9, 2014 [4 favorites]

Five hours on the blue and no one has even mentioned that an employer's health care costs have nothing to do with its 401(k) plan, except for the fact that both cost the employer money.

I have to respectfully say that while this may be traditional thinking, it is becoming less sound, in terms of how people actually use their benefits, and how employers plan and design benefits programs. For example, if a company has adopted a total rewards strategy, they are looking at proportionally reducing benefits across the board. They have a sweet spot they want to hit, as benchmarked against companies their size, and it's usually the median. The benefits are looked at in aggregate. More and more, companies are talking about benefits not as Health & Retirement, but as Savings: For Your Well-being, and for the Future.

Further, if a company offers a "consumer-driven health plan," euphemism for high deductible plan, they are touting triple tax savings as a way to get folks to buy in, and put their dollars in a health savings account. Those plans are fine -- less comes out of your paycheck, but you have to budget more at home -- unless of course you face catastrophic illness, have a distressed baby, or use a disproportionate amount of healthcare.

If there's a 401(k) plan with a match, in the current milieu the cost-containing employer is encouraging/nudging employees to put that one dollar -- healthcare vs. retirement -- into the HSA associated with the high deductible plan. As we all well know, there are so many paycheck dollars to go around, and companies are leveraging the healthcare scare environment to subtley nudge people to neglect their 401(k)s in favor of "saving for future heathcare expenses."

As a good indicator, many companies in the US are removing auto-enroll in the 401(k) because it costs the company money to have people signed up in droves. They want to encourage people to think hard about where the contribution goes, and healthcare wins.
posted by thinkpiece at 4:14 PM on February 9, 2014 [2 favorites]

I don't even understand what argument this guy thinks he's making. Is he saying, "This would all be cheaper if we could just let the really sick babies die"? And he thinks that is a thing other people might agree with?

I think maybe his words were better in the original Dickensian, where "They should die, and decrease the surplus population."

I semi-seriously wonder if someday we're just going to let people die whenever they get some kind of whopping illness, whether or not there's the potential to save them, just because of "wah, insurance is expensive for us employers." Maybe just drag 'em out in the back and shoot 'em and then throw them straight into the crematory. So much money saved! Smaller population! Everything will be so much more pleasant with less people, like that lottery episode of Sliders!
posted by jenfullmoon at 4:15 PM on February 9, 2014

Have you recently visited Huffington Post, Engadget, or TechCrunch? These and more are Aol brands. This decision is potentially much farther reaching than most would guess.

Based on the examples, it's also a much better decision than I would have guessed, in so many ways.
posted by moss at 4:17 PM on February 9, 2014

Wasn't The Verge founded by AOLers fed up with the company's assiness?

(Looking at Wikipedia, yes. Yes it was.)
posted by dirigibleman at 4:36 PM on February 9, 2014

Dying of uninsured illnesses was the entire plot of The Rainmaker.

Does life imitate art or does art imitate life?
posted by Marie Mon Dieu at 4:44 PM on February 9, 2014

I semi-seriously wonder if someday we're just going to let people die whenever they get some kind of whopping illness, whether or not there's the potential to save them, just because of "wah, insurance is expensive for us employers.

Employers in US of a certain size and up are closely watching the impact of Obamacare. They see it as -- finally -- a way to exit the ever-increasing costs associated with healthcare. Tim Armstrong isn't saying, Yuck, sick babies, he's saying (in an incredibly stupid way) Hey, let me give you some idea of what this all costs. It's an expense that is volatile and trending up at least 7% annually. All companies are looking closely.

Over the next few years, expect to see more and more companies send folks to private exchanges (curated versions of the public exchanges), with an intermediate (like AonHewitt) doing the work that the companies now do. Another approach on the horizon, is giving employees an annual sum to pay for their own healthcare, no matter how they do it.
posted by thinkpiece at 4:53 PM on February 9, 2014 [1 favorite]

thinkpiece, if that works out in an ideal way, I'd be happy with it.

As it is, insurance companies try to stonewall and overall make the claims process such a nuisance that consumers botch the letter of the contract, and so that the bills fall on the sick.

Presumably the invisible hand would take care of that shitty station.
posted by sieve a bull at 5:07 PM on February 9, 2014

Uh, localroger? That's the article in the OP.
posted by Justinian at 5:09 PM on February 9, 2014 [4 favorites]

Another approach on the horizon, is giving employees an annual sum to pay for their own healthcare, no matter how they do it.

Which will be taken away a few years later.
posted by dirigibleman at 5:10 PM on February 9, 2014 [1 favorite]

Another approach on the horizon, is giving employees an annual sum to pay for their own healthcare, no matter how they do it.

Which will be taken away a few years later.
posted by dirigibleman at 8:10 PM on February 9 [+] [!]

True that. It's all a shell game. CEOs are actively trying to figure out how to stop having to integrate the volatility of medical trend to their bottom lines -- which they see as being forced to participate in somebody else's bad business model. They will incrementally but ultimately maneuver out, no doubt.
posted by thinkpiece at 5:16 PM on February 9, 2014 [1 favorite]

Apparently rate factors, the rate changes that health care providers use to change their rates based on how much you used health insurance, are going away THANKS TO OBAMACARE,

I have a true story: Obamacare killed my spouse's job. But no, we won't be going on Fox News to weep and whine. It has to do with this: "rates based on how much you used health insurance, are going away THANKS TO OBAMACARE".

You see, my spouse works for one of the big insurance companies. Until today, Spouse worked on a major software project that uses available data to calculate medical risks and predict medical costs of individual insureds and groups.

Through the end of last year, medical insurance companies used this sort of data to set insurance premiums.

With Obamacare, the insurance companies can no longer use this info to set premiums.

Result: Demand for this software has declined so dramatically that the company is releasing most of the development and maintenance team--including my spouse--and putting the project on ice.

So . . . OBAMACARE PUT MY SPOUSE OUT OF WORK!!1!11!!! Boo-hoo . . . .

In related news, insurance companies can no longer use your medical history to jack up your insurance rates or deny you coverage.

(And FYI the company found my spouse and everyone else jobs elsewhere. They're just doing rather normal business adjustments to the new business situation and believe me, they are still doing just-fine-thank-you-very-much in the business and profit arena.)
posted by flug at 5:18 PM on February 9, 2014 [25 favorites]

* in 2009, AOL was re-branded as Aol.

it seems no one really paid much mind to the rebranding of AOL to Aol

It's still AOL Inc. at the corporate level. The online service is Aol.com, but even there they are not wholly consistent ("Make AOL my homepage"). Usage seems to be largely as a logotype (Aol.) than as a syntactically rigid renaming.

Or maybe it's just a pedant trap.
posted by dhartung at 5:26 PM on February 9, 2014 [2 favorites]

Uh, localroger? That's the article in the OP.

Ack, I didn't see the more inside :-(
posted by localroger at 5:33 PM on February 9, 2014

Did Steve Case ever pull stuff like this?
posted by lagomorphius at 5:40 PM on February 9, 2014 [1 favorite]

I'm not sure you understand. AOL chose to "self-insure." This means they decided to gamble, to save money by not buying insurance, and then hoped that they could keep that money not spent on insurance by paying for all of their employees claims out of AOL's own pockets. The risk with that bet is that an unexpectedly high medical bill will show up. They gambled and lost and are asking employees to pay for their bad bet -- as usual.

I've worked for four companies wealthy enough to self-insure. Every one of them had stop-loss insurance backstopping them. Insurers insure themselves against the exceptional cases.
posted by introp at 6:23 PM on February 9, 2014 [4 favorites]

Yeah, my work partly (or wholly? I can't remember) self-insures, and we have a reinsurer. Because you hedge all the bets you can.
posted by rtha at 6:34 PM on February 9, 2014

Armstrong's statement is telling for what it says about how we've enabled a world where CEOs make slightly less assholish things and have been getting away with it - and even celebrated for caring about shareholder profit. No wonder he thought it would be fine to blame two premature babies and their families publicly for costing too much money.
posted by lesbiassparrow at 6:51 PM on February 9, 2014 [3 favorites]

I've worked for four companies wealthy enough to self-insure. Every one of them had stop-loss insurance backstopping them. Insurers insure themselves against the exceptional cases.

Except that AOL was too cheap to even purchase stop-loss insurance. Otherwise they wouldn't have been stuck with the claims Armstrong was complaining about. That's where libertarian "we take responsibility for our own decisions" leads you, except it never works out that way in the end, does it?
posted by JackFlash at 6:54 PM on February 9, 2014

AOL's Tim Armstrong May Be the Worst CEO of the Decade
posted by octothorpe at 6:58 PM on February 9, 2014 [2 favorites]

I'm not sure you understand. AOL chose to "self-insure." This means they decided to gamble, to save money by not buying insurance, and then hoped that they could keep that money not spent on insurance by paying for all of their employees claims out of AOL's own pockets. The risk with that bet is that an unexpectedly high medical bill will show up. They gambled and lost and are asking employees to pay for their bad bet -- as usual.

This is much like the "young invincibles" who gamble that they won't get sick and can save the cost of buying insurance and then whine when they have to cough up a $20,000 hospital bill.

The idea of insurance is that you spread the risk of unexpected high medical bills over many people so that no one individual or corporation bears the entire risk. That is why doing it on a national level is different from doing it on a corporate level. AOL is the poster child for that mistake.
posted by JackFlash at 7:06 PM on February 9

I actually dig self-insurance. You are correct, it does remove yourself from the national pool, but if your company's job is to make a benefit cost effective, self insurance means that someone looked at the cost to administer, the age and health of their employees and said - hey, we can likely do this better and more effectively than paying insurance provider overhead such as Scott Serota's or Eric Shultz's salary. Even the cost of two people running up an additional $1M each, there should be enough of a savings to compensate. Lets run the math. I have a good health plan, paying 30% of my insurance premiums, which is $74 bi-weekly (medical expenses only). This means my company pays roughly (74*26/.7) $2750 per employee. AOL has 5600 employees, which means in terms of coverage if it was what aol was paying out that, they would be expecting to pay out 15.3M in premium coverage. This means that each employee would effectively also have an additional 10.7M in employee premiums, meaning that they had roughly $26M to cover all medical expenses for 5,000 employees. Stop and think about that.

That means, that for self insurance to actually lose - they would have had to have expenses equal to $4,285 per person AFTER paying out the $2 million dollars for the two babies, and that there was no money left in the kitty from prior years. Follow me here - that's a huge allowance for care, even when you are paying a hospital directly. In a year that everyone breaks their leg and requires a hospital stay - that's clearly a problem, but wow - maybe file an OSHA report once 3 or 4 people in your department all have that happen... and maybe then Tim Armstrong is trying to kill you.
posted by Nanukthedog at 7:03 PM on February 9, 2014 [1 favorite]

and that there was no money left in the kitty from prior years

I get the impression that, not being an insurance company and not really knowing what they were doing, Armstrong's AOL was smugly pocketing the surplus until the year a couple of exceptional cases bit them on the ass.
posted by localroger at 7:14 PM on February 9, 2014 [1 favorite]

No wonder he thought it would be fine to blame two premature babies and their families publicly for costing too much money.

The best part about Occupy's invention of the "One Percent" meme is that it's actually gotten the One Percent to talk publicly about what it's like to be one of the One Percent.

What they're saying is truly priceless and completely revealing.
posted by mediareport at 7:15 PM on February 9, 2014 [10 favorites]

I get the impression that, not being an insurance company and not really knowing what they were doing, Armstrong's AOL was smugly pocketing the surplus until the year a couple of exceptional cases bit them on the ass.

Possible, but unlikely. In my experience when a wealthy company wants to self-insure, they buy an almost-turnkey solution from a third-party administrator. They'll be provided everything from paperwork to regular utilization reports to cost-savings recommendations to safe stop-loss insurance levels. The TPA runs the plan and the company just pays the claims on the back end. Maybe AOL is big enough to employ their own administrator office; if so, most of those people will be, by necessity, health care admin professionals who will already know about stop-loss plans, etc.

It's almost impossible to get anything signed-off at those levels if you don't show that you've covered your ass in terms of potential losses. Large companies, like people, are not risk-averse so much as they are loss-averse.
posted by introp at 7:28 PM on February 9, 2014

i expected more from rancid's frontman

On days like this, I wonder if the Good Tim Armstrong ever thinks about suing this AOL jackass for defamation. Is that even possible? Can you sue someone with the same name as you for dragging you down in the muck with them?
posted by Ghidorah at 7:32 PM on February 9, 2014 [1 favorite]

Follow me here - that's a huge allowance for care, even when you are paying a hospital directly.

You are way off on the real cost of health care in the U.S. Your numbers don't even come close to being sufficient.

The average cost of employer health insurance (combining employer and employee shares) is almost $6000 for an individual and over $16,000 for a family. These figures include self-insuring companies. Under ACA law, 85% of that money must be paid each year for actual medical care, so these are the real costs of providing care for real Americans. The remaining 15% is for overhead services and profit, so self-insurers are simply trying to reduce that 15% overhead. They are not going to have money left over in the kitty.
posted by JackFlash at 7:40 PM on February 9, 2014 [2 favorites]

"There's only room for one distressed baby at this company, and that's me!"
posted by crepesofwrath at 8:13 PM on February 9, 2014 [7 favorites]

Unleash the hounds, Smithers!
posted by The Underpants Monster at 8:18 PM on February 9, 2014

Oh, good. JackFlash came up with numbers. Because Nanukthedog's numbers seemed really low to me and he was saying they were plenty high.

Yeah, $4285 per person sounds dangerously low for health care. Maybe if virtually all of your employees are dudes in their 20s. But once you start putting people older than that or your employees starting doing recklessly dangerous things like procreating that's not going to cover jack squat.
posted by Justinian at 8:44 PM on February 9, 2014

I deal with NICU babies all the time, and it is difficult/impossible to know how any given child will do. On top of the standard medical decisions, there is a whole social system that comes into play. Is that micropremie born to a drug addict with no prenatal care who was planning to give him or her up for adoption at the first opportunity and is in no way equipped to deal with a special needs child? Or is the baby born to a couple that has been going to fertility specialists for years, and this may be their last chance at having a child of their own, biologically speaking? Or is it (like the majority of NICU babies and the daughter in the Slate article) just regular folks who have been thrown a potentially nasty curve ball? A lot of difficult decisions to make in many of these cases. But you know who shouldn't be making them? Your boss.

When Mr. Armstrong brought up NICU babies in his press conference (or interview or whatever it was) it seems clear to me that by singling out two employees with sick babies he was violating the HIPAA privacy rule. I have to take HIPAA compliance training as part of my job, and based on what I have learned I agree with the other commenters and those in the blogosphere who think Mr. Armstrong violated the privacy of the babies he mentioned. But it is not up to me to decide that; the Department of Health and Human Services administers HIPAA and other laws. So I filed a complaint asking them to look into the matter:

Mr. Armstrong gave a press conference in which he stated that some business decisions were made in part because of the medical expenses of 2 employees. In an organization the size of his business, singling out two people for medical reasons makes it easy to identify those people and compromises their privacy. Furthermore,using them to justify business decisions that may be unpopular exposes the patients to potential harassment because of their medical condition.
posted by TedW at 8:49 PM on February 9, 2014 [66 favorites]

Here's an NBC News article, from Kaiser Health News, since JackFlash's link looks broken; $5,884/year for singles, $16,351 for families.

And here's the surprisingly readable and informative full Kaiser report. In 10 years, it's been an 80% increase in overall premium, and an 89% increase in employee contribution, i.e. employers are paying less.
posted by Llama-Lime at 8:54 PM on February 9, 2014 [7 favorites]

Llama-Lime, sorry for the broken link. Thanks for providing the link to the full Kaiser report and here is the link to the summary I originally intended.
posted by JackFlash at 9:48 PM on February 9, 2014

Nanukthedog - a year's worth of basic mental health care costs my insurance over your $4285 limit. That doesn't include any medical doctor visits, any emergencies, nothing. Only seeing a therapist once a month, a psychiatrist once every three months, and one daily medication. Obviously there's a lot of people who don't need that, but it's very easy to get over $4000 without breaking a leg or anything dramatic happening.
posted by desjardins at 10:28 PM on February 9, 2014

I have to take HIPAA compliance training as part of my job, and based on what I have learned I agree with the other commenters and those in the blogosphere who think Mr. Armstrong violated the privacy of the babies he mentioned. But it is not up to me to decide that; the Department of Health and Human Services administers HIPAA and other laws. So I filed a complaint asking them to look into the matter.

If you are ever in L.A., TedW, allow me to buy you a drink!
posted by scody at 11:12 PM on February 9, 2014 [8 favorites]

I hear the DSM-VI will recognize "CEOciopathy" as a serious and prevailing condition.
posted by sarastro at 11:49 PM on February 9, 2014 [5 favorites]

So I filed a complaint asking them to look into the matter:

posted by TedW at 8:49 PM on February 9 [9 favorites −] Favorite added! [Flagged]

Flagged for awesome-ness. Thanks TedW !!!!
posted by marsha56 at 1:06 AM on February 10, 2014

Great stuff TedW, thank you again. Having a micro-premie baby is easily one of the most stressful things that can happen in a family, bar none - the acute treatment in hospital can last most of a year, which is a terrifying exhausting nonstop rollercoaster, and even then be followed by bereavement; while the long-term medical consequences very often last a lifetime. A $12m boss who piles in on it like this is just not a human being.
posted by colie at 3:15 AM on February 10, 2014

They think of me as the "creative," and a hippie because I voice constant and consistent common sense questions like, Will we be capping Executive Pay so we can ask for sacrifices in good faith? They look at me either indulgently like I don't "get" it, or like I am stark raving mad.

Insane -- I read all the way down to here, only to find lucien copy-pastes the SAME two sentences that I wanted to. Absolutely chilling comment from thinkpiece. I have been this person at work, and I have gone home and cried about it and not known what to do.

My FIL passed on two months ago. Toward the end he was begging his wife to let him die, because the experimental wonder drug he was on cost $8K per shot. She makes six-figures and has excellent insurance, she didn't care. But he died feeling like a burden and a bottomless money-pit, as if his survival instinct was nothing but greed.

To think that it's all a matter of money and profits to these people... horrifying. Unspeakable. We cluck our tongues at human rights violations in North Korea and Russia and everywhere else, while malevolent corporations are literally running the US government, and leaving people to die in the streets. This country scares the crap out of me right now.
posted by polly_dactyl at 4:59 AM on February 10, 2014 [5 favorites]

People, people, this guy only made $3.2 Million in 2011, maybe cut him some slack huh?

via the Time Armstrong's Salary in Distressed Babies link upthread.
posted by marienbad at 6:05 AM on February 10, 2014

scares the crap out of me right now

I'm sorry, but right now? Right now? Were you not paying attention throughout most of history? Read up on the Homestead riots, just to start with, and then see how much scarier things have been.

If you find these days scary, you'll have a heart attack when you see how much worse things have been throughout more or less all of human history.

Armstrong is a massive tool, and I frankly hate him. The Koch Brothers, to pick a pair, are probably full-on evil. That terror you're feeling is because you can hear them trying to slip their chains; but they're still chained. For most of "the good old days" people like them weren't held back at all.

The solution isn't to panic, aaagh, the chains are rattling! The solution is to say thank god I can still hear the chains, and then set about figuring out how to weld on a few more links.
posted by aramaic at 6:16 AM on February 10, 2014 [5 favorites]

I think the apocalyptic tone, tbh, is kind of uncalled for. AOL is actually a pretty nice place to work at, Tim Armstrong's chronic foot-in-mouth disease aside. The pay is good, the workplace has a casual atmosphere, the benefits, aside from the recent 401k thing are quite generous. Believe me, I've had shitty jobs. I've had shitty union jobs. Aol is not a bad place to work.

I think one of the lessons here is that if you own a media company, you should probably be extra sure that your employees are happy.
posted by empath at 6:30 AM on February 10, 2014 [1 favorite]

Employers in US of a certain size and up are closely watching the impact of Obamacare. They see it as -- finally -- a way to exit the ever-increasing costs associated with healthcare. Tim Armstrong isn't saying, Yuck, sick babies, he's saying (in an incredibly stupid way) Hey, let me give you some idea of what this all costs. It's an expense that is volatile and trending up at least 7% annually. All companies are looking closely.

This.

Armstrong was wrong - massively wrong. But where he was massively wrong wasn't thinking about the decision, or realizing that the ACA meant they were going to have to pay a lot more money in health costs, so they'd have to take the money from elsewhere. He went massively wrong in exposing two women's experiences in violation of privacy. Saying "We had unexpected medical expenses, due to the ACA" would have been fine. Exposing two women is not.

The thing is: some of us have been saying for a while stuff like this would happen. If you force companies to pay more money for something, they aren't just going to eat it. They're going to find savings elsewhere, whether it's reducing all their employees to part-time to avoid healthcare costs, or cutting other benefits that aren't federally mandated. To think that it's going to be all sunshine and roses for employees as a result of the law is naive at best. Yes, you could say "well, CEOs could reduce their pay," and they certainly could, but why should they? They're happy with the levels their pay is at, their shareholders and board are happy with the levels their pay is at. What motivation to change it?
posted by corb at 6:36 AM on February 10, 2014

How are the unexpected medical expenses due to the ACA, corb? Without the ACA, how would AOL have had to pay less for the sick babies?

To think that it's going to be all sunshine and roses for employees as a result of the law is naive at best. Yes, you could say "well, CEOs could reduce their pay," and they certainly could, but why should they? They're happy with the levels their pay is at, their shareholders and board are happy with the levels their pay is at. What motivation to change it?

The fact that it's going to be hard to attract and retain decent employees when you're offering them all part-time work and no benefits? The fact that without a middle class, there's nobody to buy the products and services that companies offer? Your economic model is morally bankrupt, but it's also economically unsustainable.
posted by ArbitraryAndCapricious at 6:51 AM on February 10, 2014 [17 favorites]

some of us have been saying for a while stuff like this would happen

The problem is that for the past five years conservatives have cried "WOLF!" every time the Obama administration does anything at all.

It is no longer possible to take seriously their criticisms. It is no longer possible to see their opposition as principled. If Obama said that the sky was blue, and it was, the Republicans would still insist that it was green.

No sensible person will trust anything any conservative pundit, academic or commentator says. With very good reason. And that is a terrible shame, because it reduces the scope of debate. But it is something that should be blamed squarely on the right-wing parties of the past thirty years, because they have earned their reputation as horrible liars over and over and over again.

The whole thing is dispiriting, but maybe in thirty years conservatism can distance itself from its appalling track record of dishonesty. I'm sure, if I was conservative, I would like people to listen when I shouted "WOLF!" and not just say - as any sensible person would - "let me check your sources, because you guys have a terrible track record on this stuff".
posted by lucien_reeve at 7:25 AM on February 10, 2014 [15 favorites]

Honestly, the lure is jobs, not benefits. People will adapt to having less in the benefits realm, trust me. I work change management all day long, and am continuously surprised at what is tolerated in order to help the rich stay rich.

Think about it -- why would a, say, entertainment company like AOL, who is self-insured, want to stay in the insurance coverage business? Trying to adapt to the moving target that is the fragmented healthcare landscape: providers, carriers, hospitals, consolidations, ACA, compliance and on and on. Do they really want to be adjudicating claims, running benefits enrollments, organizing health fairs, nagging people to stop smoking, worrying about employees' BMI ...

No, they do not. We are seeing them start to flex against this old school, patriarchal construct. It's painful for me as an employee (with a lot of medical bills) but it's still happening.
posted by thinkpiece at 7:29 AM on February 10, 2014 [2 favorites]

The thing is: some of us have been saying for a while stuff like this would happen. If you force companies to pay more money for something, they aren't just going to eat it. They're going to find savings elsewhere, whether it's reducing all their employees to part-time to avoid healthcare costs, or cutting other benefits that aren't federally mandated. To think that it's going to be all sunshine and roses for employees as a result of the law is naive at best. Yes, you could say "well, CEOs could reduce their pay," and they certainly could, but why should they? They're happy with the levels their pay is at, their shareholders and board are happy with the levels their pay is at. What motivation to change it?

This happens every time the government regulates anything. Corporations will always try to skirt around it and shift costs. You just have to keep closing loopholes. It's never been the case that government passes one law and fixes a problem. It's an ongoing process.
posted by empath at 7:30 AM on February 10, 2014 [6 favorites]

Think about it -- why would a, say, entertainment company like AOL, who is self-insured, want to stay in the insurance coverage business? Trying to adapt to the moving target that is the fragmented healthcare landscape: providers, carriers, hospitals, consolidations, ACA, compliance and on and on. Do they really want to be adjudicating claims, running benefits enrollments, organizing health fairs, nagging people to stop smoking, worrying about employees' BMI ...

I think this is a positive effect of obamacare. People being forced to work for a company so they don't die or risk bankruptcy from medical bills probably does as much to supress wages and worker rights as anything else. Being able to save three months of insurance payments up and just quit is going to be a tremendously liberating thing for a lot of people -- and a lot of shitty employers are going to have to work harder to keep people, I think.
posted by empath at 7:35 AM on February 10, 2014 [9 favorites]

Yes, you could say "well, CEOs could reduce their pay," and they certainly could, but why should they?

Because maybe these salaries are based on massive ego-stroking and not performance? It's the same few people logrolling their way higher and higher into the 1%, partially on the backs of employees who aren't even paid a living wage:

"CEO pay got out of control because you had an unbalanced set of incentives. The CEOs are highly interested in increasing their salary, and it is given by a compensation committee that meets once per year for 15 minutes. As CEO compensation rises across the board, they use that as a bargaining tool and so the salary continues to get ratcheted up. No company wants to be in the bottom quartile as far as CEO pay goes either." -- Warren Buffet

They're happy with the levels their pay is at, their shareholders and board are happy with the levels their pay is at. What motivation to change it?

Conscience? Desire to get into Heaven? Guilt? Self-interest in the country not imploding? If you're not going to have a ceiling at least put in a fucking floor.

It's always the same story: "Oh, we can't raise the minimum wage/cut greenhouse gas emissions/make cars more fuel efficient/conform to the ACA or our costs will skyrocket and we will shut down and have to put people out of work and raise our prices and send jobs oversea and... and... and. Oh, and by the way, we're not going to pay corporate taxes." To quote the late Senator Ted Kennedy, "How much is enough?"
posted by Room 641-A at 7:36 AM on February 10, 2014 [9 favorites]

I do too, empath -- that's why I said, upthread, that Obamacare is looking like an exit scenario for employers ...

Also, one last thing -- attraction/retention is becoming one of those creaky concepts, like work/life balance, that CEOs are distancing themselves from. They believe the talent will come if they manage through the benefits evolution. I've heard senior leaders discuss not using the WORD benefits anymore!

Anyway, as you can see, this topic is an intense one for me. To be at the table, considering my own health and finances. I am ready for cocktails by lunchtime, for realz.
posted by thinkpiece at 7:39 AM on February 10, 2014 [1 favorite]

If you find these days scary, you'll have a heart attack when you see how much worse things have been throughout more or less all of human history.

Why do people always do this???

We're living in the developed world, in the richest nation on earth, and we are supposed to be long past the days of barbarism. But we're not. The things that are happening right now in this country are scary, unchecked capitalism is scary. It seems like a REPEAT of history, and that is the point.

It's like when I watch Star Trek and they just casually say, "Poverty, war, disease -- they've all been eliminated!" and I can't even imagine that world, not if it's 2014 already and we're still debating the merits of letting people live if they can't pay for the medicine they need.

Anyway.
posted by polly_dactyl at 7:40 AM on February 10, 2014 [12 favorites]

They changed the 401k back this morning after this whole PR disaster.
posted by windbox at 7:43 AM on February 10, 2014 [4 favorites]

corb: Saying "We had unexpected medical expenses, due to the ACA" would have been fine.

Except, as pointed out in the first FPP link, large group plans have little if any impact from the ACA:

Armstrong may have been referring to the potential for premiums to go up under the new health care law. Some plans will have to become more expensive to cover benefits now required by Obamacare. But the consulting firm Aon Hewitt did a study and found that the impact should be the least for large employer plans since those usually already cover the newly mandated benefits. The report estimated that for plans at a big company like AOL, premiums should rise by less than one percent.

I don't have figures handy for what AOL pays in benefit costs, but with only 5,600 employees, I'm pretty sure $7.1 million is far more than what could reasonably be blamed on the ACA's stricter coverage requirements.

I thought I saw upthread that AOL is self-insuring? So it's the lifetime caps that were the issue rather than the stricter coverage. I agree though overall, many large employer plans already cover the benefits - but maybe less than people think. A lot of even employer-based healthcare is not robust.
posted by corb at 8:24 AM on February 10, 2014

So AOL's decision to self-insure bites them in the ass, and the employees should be asked to foot that bill because...
posted by tonycpsu at 8:25 AM on February 10, 2014 [5 favorites]

tonycpsu: "So AOL's decision to self-insure bites them in the ass, and the employees should be asked to foot that bill because.."

The CEO deserves his millions.
posted by ArgentCorvid at 8:38 AM on February 10, 2014 [8 favorites]

Look at JPM!! No matter how many mistakes/crimes/poor decisions/stupidity/havoc they wreak, they just keep rewarding themselves. It's abysmal.
posted by thinkpiece at 8:56 AM on February 10, 2014 [1 favorite]

Tim Armstrong Has a History of Targeting Pregnant Employees

According to the lawsuit, Armstrong promoted Elwell to Google's national sales director of North America in late 2003 and even singled out her contribution to Google going public in 2004. In April 2004, Elwell told Armstrong she was having medical problems with her pregnancy that would prevent her from traveling for a "few weeks," which is when Armstrong fell off the rails.

He demoted Elwell the same month that she lost two of her unborn children. He told colleagues she was moved to operations because she could not travel, he called her an "HR nightmare" and said he no longer wanted her in the New York office, and eventually fired her over the phone. To inform her about the demotion, "Armstrong showed Elwell an organizational chart from which Elwell's position had been deleted."

posted by Room 641-A at 10:21 AM on February 10, 2014 [7 favorites]

Hahahaha, you can't make this stuff up. It's today! Check out the roster, and Session One's lead speaker. Please god, make Geena Davis pack the bow and arrow.
posted by thinkpiece at 10:29 AM on February 10, 2014 [1 favorite]

So AOL's decision to self-insure bites them in the ass, and the employees should be asked to foot that bill because..

I'm not saying they should, I'm saying they will. Companies generally exist with the intention of making profit for the owners/shareholders, not for enriching the employees (unless the employees are also shareholders, in which case it gets wonky). I think there's a large gap between what we might like people to do, and what they realistically will.
posted by corb at 10:46 AM on February 10, 2014

octothorpe: AOL's Tim Armstrong May Be the Worst CEO of the Decade

Bold statement, considering it's only February of 2014.

SHINGY!

Aol advertising leadership team: David Shing

David Shing is AOL’s Digital Prophet. He spends most of his time watching the future take shape across the vast online landscape. The rest he spends talking to people about where things are headed, and how we can get the most out of it.

This is poetry, paired with the image of Shingy in his trademark big glasses and bigger hair, biting on a ball chain necklace, wearing ... camo? Where does this attire fit into his future-gazing? He's looking in the rear-view mirror at post-grunge edginess.
posted by filthy light thief at 10:50 AM on February 10, 2014 [2 favorites]

>So AOL's decision to self-insure bites them in the ass, and the employees should be asked to foot that bill because..

>I'm not saying they should, I'm saying they will. Companies generally exist with the intention of making profit for the owners/shareholders, not for enriching the employees

But in AOL's case, the CEO made a bad business bet. He decided to go cheap, gamble and not buy stop-loss insurance that would have paid for the unexpected medical costs. He made a bad bet and expects the employees to pay for his bad bet rather than cut his own pay for making bad decisions. CEOs expect to be rewarded when they get lucky and employees to take the hit when they get unlucky. Heads I win, tails you lose.
posted by JackFlash at 11:03 AM on February 10, 2014 [5 favorites]

corb: "I'm not saying they should, I'm saying they will."

Right, but upthread you made a normative statement that it would have been "fine" for Armstrong to blame it on the ACA, when that is not actually where the fault lies, given that AOL made a calculated risk that ended up going south on them. This looks like you're condoning him for making a false statement about where the $7 million increase in costs is coming from.
posted by tonycpsu at 11:04 AM on February 10, 2014 [3 favorites]

Right, but upthread you made a normative statement that it would have been "fine" for Armstrong to blame it on the ACA, when that is not actually where the fault lies, given that AOL made a calculated risk that ended up going south on them. This looks like you're condoning him for making a false statement about where the $7 million increase in costs is coming from.

Oh, I see where you're coming from. My point was more that pointing to increased costs due to the ACA (because even if they did make a calculated risk, the risk would have been smaller if they were allowed lifetime caps), and then using those increased costs as a justification for cutting, which happened to entail cutting more than they actually lost, is pretty low on the moral scale, compared to exposing women's private medical circumstances in ways that could leave them vulnerable to retaliation. "Fine" means more, in that instance "business as usual, not particularly eyebrow-worthy, I'm not going to get outraged about it" rather than "Morally laudable."
posted by corb at 11:12 AM on February 10, 2014

When I first heard about this, my perception was that it was a terrible idea for AOL as well. If you defer matching contributions once a year then employees have an incentive to stick around until January, get their 401(k) match and then switch jobs. Who would really want those kind of incentives in place? It means you will have higher turnover during one month and people who didn't want to work there in the last quarter will hang around longer.
posted by dgran at 11:23 AM on February 10, 2014

It’s so cool that AOL’s “Digital Prophet” is still in a world that’s waiting for Tank Girl to be released while reading about the latest band in Ray Gun.
posted by stltony at 11:29 AM on February 10, 2014 [4 favorites]

stltony, for some reason, his image evoked a certain "Tank Girl" era vibe for me, too. Uncanny.
posted by filthy light thief at 11:42 AM on February 10, 2014

corb: "Fine" means more, in that instance "business as usual, not particularly eyebrow-worthy, I'm not going to get outraged about it" rather than "Morally laudable."

Yeah, I guess if anything the shareholders would just want him to be a better liar.

At the same time, when you're a publicly traded company and you're lying to the shareholders to cover up for a bet gone bad, that seems like something the SEC might want to look at. Given that benefits are a pretty hefty chunk of overall employee compensation, I feel like even the shareholders are getting screwed by the lack of transparency about exactly why these decisions are made.
posted by tonycpsu at 12:05 PM on February 10, 2014 [1 favorite]

The fabulous Shingy is clearly channeling Sigue Sigue Sputnik.
posted by colie at 1:33 PM on February 10, 2014

The fabulous Shingy is clearly channeling Sigue Sigue Sputnik.

Yes! I only just learned about Shingy a few hours ago but this has been driving me bonkers.
posted by Room 641-A at 2:42 PM on February 10, 2014

Here's Why Tim Armstrong Knew About His Employees' 'Distressed Babies'

Since AOL is paying the bills, it needs to know something about what kind of medical care its employees are getting. This information informs the company's decisions about changes to the health plan in future years; depending on what functions it's contracting out, it may also need to make decisions about what claims to pay and appeal.

In general, reports about high-cost claimants that get up to the CEO level should have identifying employee information stripped out. "You're not going to know who the employees are," said Paul Fronstin of the Employee Benefits Research Institute.

...

Except, in some cases, a high-cost employee's identity might be pretty easy to figure out. Managers could deduce the employee's identity through workplace gossip or claims for related benefits, like short-term disability and family leave.

posted by tonycpsu at 11:48 PM on February 10, 2014

a million dollars does seem like a lot of money to keep someone alive. Is there no point where the cost of the care should be taken into account?
posted by garlic at 3:39 PM on February 11, 2014

a million dollars does seem like a lot of money to keep someone alive. Is there no point where the cost of the care should be taken into account?

You're kidding, right? My own cancer treatment costs topped about half a million over the course of 14 months, which is a totally common figure. But it's not my fault -- or any cancer patient's fault, or any premature baby's fault, or any other "consumer" of health care -- that all components of medical treatment are priced as commodities. Each of my chemo treatments topped $20,000. But it's not because I had $20,000 worth of drugs going into my veins, nor because the cost of labor of the nurses who were taking care of me for the afternoon totaled $20,000.
posted by scody at 3:50 PM on February 11, 2014 [7 favorites]

Is there no point where the cost of the care should be taken into account?

We already do this, you know? It's called being un- or underinsured and dying (or becoming disabled, or living with a much worse quality of life) because you can't afford treatment.
posted by rtha at 3:53 PM on February 11, 2014 [4 favorites]

Is there no point where the cost of the care should be taken into account?

Oh, and this was something insurance companies could do routinely before the ACA came into effect: plans could be capped at a lifetime limit (usually $1 million or $2 million). Which sounds plenty until you get cancer, or have a premature baby, or suffer a traumatic brain or spinal injury.

Those same insurance companies, of course, never seem to have to take executive compensation into account.
posted by scody at 3:59 PM on February 11, 2014

"a million dollars does seem like a lot of money to keep someone alive. Is there no point where the cost of the care should be taken into account?"

oh you mean death panels

Seriously, though, that already happens, and with medical inflation, a million bucks isn't what it used to be.
posted by klangklangston at 4:04 PM on February 11, 2014 [5 favorites]

a million dollars does seem like a lot of money to keep someone alive. Is there no point where the cost of the care should be taken into account?

Yeah, I'm sure Tim Armstrong telling one of his employees that their baby is too expensive to save would do wonders for employee morale and retention.
posted by empath at 4:15 PM on February 11, 2014

Is there no point where the cost of the care should be taken into account?

Yes, but if and only if it is universally applied -- so if one of the Koch brothers requires care that exceeds 1 million, he will be allowed to die just like the poor sucker who needs "health insurance". To solidify matters let's say he will be denied no matter where in the world he goes, and if he breaks the embargo he'll be executed along with his doctor(s) and any staff that served him. Same goes for any politician, celebrity, banker, anyone anywhere in the world.

...the rich won't mind an even dying field, would they? No, of course not. Surely they won't mind the majestic equality.
posted by aramaic at 5:35 PM on February 11, 2014 [1 favorite]

A million dollars was the price of the treatment, but that was distorted through insurance and financial structures that ultimately only really exist to serve the interests of the elites. Surely the value of the treatment is a different concept and is part of how human beings organise society? Most of the people I've met working in neo-natal intensive care wards would do it for free if necessary.
posted by colie at 11:49 PM on February 11, 2014

a million dollars does seem like a lot of money to keep someone alive. Is there no point where the cost of the care should be taken into account?

At the risk of stating the incredibly obvious, the entire insurance industry is built on the premise that they will step in and foot the bill for the cost of care, if you, who will typically remain relatively healthy actuarily speaking, pay them every month whether you are sick or well. From cradle to grave.

It's supposed to be there when you need it. The industry itself is broken, and so no, if they do not fix the business model (again, this is a fragmented industry with lots of players who are not aligned, who are corrupt, looking at you, big pharma, who refuse to go electronic, who purposely withhold innovation because the improvements will reduce current prices, etc etc) and those gross inefficiencies cost WAY MORE MONEY THAN MY CANCER TREATMENT, and they have jacked up the prices to boot, so no, there is no point at which anyone ever should say to a fellow human being, hey, you're costing too much because you are cutting my profits which are already GREEDY.
posted by thinkpiece at 4:20 AM on February 12, 2014 [3 favorites]

Is there no point where the cost of the care should be taken into account?

Yes - and that point is when the gov looks at how much it is paying the healthcare/health insurance/medical manufacturers and says "fucking christ, these guys are screwing us sensless, they are practically bleeding us fucking dry. Maybe we should do something about this, maybe some form of legislation or action or something."
posted by marienbad at 4:56 AM on February 12, 2014 [7 favorites]

Remember when the Papa John owner was crusading against health care? This is what a couple of his homes that he is selling look like.

Whenever you hear a CEO talking this kind of shit do a search and see where they live.
posted by srboisvert at 12:39 PM on February 15, 2014 [3 favorites]

I agree with TedW that there very well migt ge a colorable claim under HIPAA (there are many identifiers that HIPAA contemplates).

I also think it's unlikely, based on the employer trends I've seen in the business, that Aol had lifetime dollar limits on benefits anymore - annual limits are a little more common, but neither are particularly common for jumbo employers like that. Really, a large, self-funded plan would have a tough time blaming the ACA for their increased costs. Chances are very high that their plan already covered the near-term market reforms (e.g. preexes, preventive services, etc), the employer mandate hasn't happened yet (and might not hurt them, again given their likely plan design) and neither has the "Cadillac" tax. The main revenue generators that I can see that might have hurt them so far would have barely kicked in yet, depending on when their plan year is (he transistional reinsurance fee and the PCORI fee, which are based on plan head counts).

Also, as to thisegardring the employee contributions:

I get the impression that, not being an insurance company and not really knowing what they were doing, Armstrong's AOL was smugly pocketing the surplus until the year a couple of exceptional cases bit them on the ass.

Unless they sponsor what is called an unfunded plan (paying claims from Aol's general assets vs. keeping contributions as plan assets), they'd have pretty serious ERISA fiduciary liability for spending thos plan assets (see the Enron decision for a pretty elegant textbook explanation of ERISA fiduciary rules).
posted by Pax at 8:32 AM on February 17, 2014 [1 favorite]

« Older You Can't POP Your Cherry (HYMEN 101) | I'd like a dumb grande wuppy duppy latte, extra... Newer »

This thread has been archived and is closed to new comments

MetaFilter

"Distressed babies"
February 9, 2014 9:59 AM Subscribe

Tags

Share

"Distressed babies" February 9, 2014 9:59 AM Subscribe

Tags

Share

"Distressed babies"
February 9, 2014 9:59 AM Subscribe