Money Matters
Posted by Michelle Moquin on February 24th, 2014
Good morning!
From Think Progress:
AOL Chairman Slashes 401K Benefits, Blames Two Women Who Gave Birth To Sick Babies
AOL Chairman and CEO Tim Armstrong blamed the babies of two employees for increasing the company’s benefit costs on Thursday,explaining in a conference call that AOL had to pay millions out in medical bills and alter its entire benefits package. The remarks came just hours after the company announced changes to its 401(k) plans and complained that Obamacare has increased costs by $7.1 million.
“We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general,” Armstrong said on a conference call first reported by Capital New York. “And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.” Under the new program, AOL employees will not be able to collect any matching funds toward their retirement savings from the company for any given year if they leave before Dec. 31 of that year.
But health care experts ThinkProgress contacted questioned why a large self-insured company with more than 5,000 employees could not absorb the additional health care costs associated with the pregnancies. Large employers typically purchase reinsurance, which could cover a substantial share of big claims and ensure stability in cases of larger-than expected medical payouts.
“The Affordable Care Act is simply a convenient whipping boy for any decision an employer makes to cut benefits,” Tim Jost, a law professor at Washington and Lee, said. “Assuming AOL had reasonably generous coverage like most large employers, it should not have experienced any significant changes in its benefit structure for 2014. Perhaps it had to pick up a few more employees that had not been covered before or reduce premiums for a few employees, but it is hard to see $7.1 million here.”
Meanwhile, the company is also hurting from poor business decisions. As the Washington Post reports, its quarterly earnings “were hurt by $13.2 million in costs associated with layoffs, including at Patch, the struggling local news venture recently sold to investment firm Hale Global. The Patch unit, championed by Armstrong, has lost an estimated $200 million.”
AOL’s total revenue beat expectations and increased $679 million in the fourth quarter. In 2012, Armstrong earned 12.1 million.
ThinkProgress reached out to AOL for comment, but did not receive a response.
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Readers: Hey…he’s got to make up for all the money he lost in his investments, why not blame the women? Women get blamed all of the time, why would we think this would be any different, especially coming from a huge corporation such as AOL.
Armstrong is a very big republican donor. So my guess is, although I have no idea, he might be a pro-lifer – you know, they don’t want you to abort, nor do they want to support.
Here’s the update though….I just read that Armstrong got some words thrown back at him from the mother of one of the “distressed babies.” And rightly so. He apologized and then restored the old 401K policy.
Here’s a segment of the write. If you want to read the full article click here.
Fei, the mother of one of those babies, took to the virtual pages of Slate magazine to blast Armstrong’s remarks, which she characterized as “brutal” and “a cruel violation,” and to share the dramatic, heart-wrenching story of her daughter’s birth and recovery.
On Sunday night, Fei told NBC Nightly News’ Kristen Dahlgren that the day her daughter was born, she was told there was a “one-third chance of her dying before we would ever be able to bring her home.”
“It was sort of impossible to process that he was talking about my daughter, who was home with me at that time, to hear her labeled a ‘distressed baby,’” she said of Armstrong’s comments. In a portion of the interview not included in the broadcast, called Armstrong’s comments “completely dehumanizing” and “a violation.”
Fei added that “to me, there did sound like the implication that somehow we were greedy consumers of health care benefits, that we had kind of gobbled up more than our share of the pie.”
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Thoughts? Blog me.
Lastly, greed over a great story is surfacing from my “loyal”(?) readers. With all this back and forth about who owns what, that appears on my blog, let me reiterate that all material posted on my blog becomes the sole property of my blog. If you want to reserve any proprietary rights don’t post it to my blog. I will prominently display this caveat on my blog from now on to remind those who may have forgotten this notice.
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michelle
Aka BABE: We all know what this means by now :)
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February 24th, 2014 at 10:16 am
What can you expect from these LSOS rich, or their minions? It’s all about more, more, more. There never will be enough for them.
We truly have to take our country back from them.
February 24th, 2014 at 10:17 am
absolutely agree with Dave about Richard Eskow. He is certainly one of the best lefty writers on politics out there. I’d like to see him on one of the Sunday talk shows like Meet the Press tearing into that idiot David Gregory.
February 24th, 2014 at 10:17 am
This year has to be the year we pay republicans back for selling out America!
Vote all republicans out at any level!
February 24th, 2014 at 10:18 am
I imagine decreasing consumer demand and increasing unemployment in a vicious cycle of lay offs fits their plan quite nicely.
February 25th, 2014 at 7:17 am
We need a revolutionary new government. If it takes spilling of some blood, so be it. This country’s management has gone down the drain and is beyond salvaging. I hate to be suggesting violence, but they have gone to far and civil unrest seems like the only viable solution. That is how it’s been done worldwide, including in the US, for millenium. I am mad as hell and can’t take this shit anymore, can you?
Maybe you are too busy and pacified playing with your new electronic gadgets (all made overseas)to notice. We have a duty to save this land and ALL it’s people.
February 28th, 2014 at 6:11 am
Actually, Anonymous#5, it is much simpler than that. All we need is for the people to go to the polls with determination to end this bullshit by the republican party.