Last week Tim Armstrong, Chief Executive Office of America Online, held a good news/bad news townhall with his employees in which he said the good news was that the company posted its highest quarterly profits in years.
The bad news was that the good news would not be trickling down, as there would be belt-tightening at the firm, including an end to matching employee 401-K contributions each pay period.
“Two things that happened in 2012,” Armstrong said. “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”http://www.slate.com/...
After getting pushback within the company, from the blogosphere and the general public, Armstrong apologized and reversed his decision.
Deanna Fei, the mother of one of the "distressed babies" has written a first-person account about what it felt like the day her daughter was born and the day the newborn became a subject of a company townhall.
On Oct. 9, 2012, when I woke up in pain, my husband was at the airport about to board a flight for a work trip. I was home alone with our 1-year-old son and barely able to comprehend that I could be in labor. By the time I arrived at the hospital, my husband a few minutes behind, I was fully dilated and my baby’s heartbeat was slowing. Within 20 minutes, my daughter was delivered via emergency cesarean, resuscitated, and placed in the neonatal intensive care unit.Near the end of her essay, Fei explains that "there was nothing high-risk about my pregnancy. I never had a single risk factor for a preterm birth, let alone one as extreme as this one. Until the morning I woke up in labor, every exam indicated that our daughter was perfectly healthy."
She weighed 1 pound, 9 ounces.[...]
My daughter had to spend three months in the NICU, dependent on many high-tech medical apparatuses and round-the-clock care. She endured more procedures than I can count: blood transfusions, head ultrasounds, the insertion of breathing tubes, feeding tubes, and a central line extending nearly to her heart.[...]
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.[...]
Because the day of her birth was the furthest thing from a happy event, because so many of her first days were lived under the specter of death, I’ve never had the luxury of taking her presence for granted. Every time she wakes with a dazzling smile and goes to sleep with her soft head against my shoulder feels like a wonder. It can be a struggle to set aside my lingering trauma amid the daily realities of coordinating her care to simply celebrate the fierce, beautiful girl who has completed our family.
All of which made the implication from Armstrong that the saving of her life was an extravagant option, an oversize burden on the company bottom line, feel like a cruel violation, no less brutal for the ludicrousness of his contention.
Then she asks a million dollar question of Armstrong and others who share his mindset.
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?http://www.slate.com/...
11:06 PM PT: I am trying to fully understand this quote:
“Two things that happened in 2012,” Armstrong said. “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”
Is he saying the "two things" are the "distressed" births? Or is he saying the distressed births and the cost of Obamacare are the two "things?"
Either way it sounds like he is thoughtlessly referring to both of these births as "things;" a set of itemized charges that threaten his bottom line--and when I say his bottom line, I mean everyone else's, particularly those who contribute to a 401-K.
Mon Feb 10, 2014 at 10:14 AM PT: When asked about how AOL is insured the company line is 'no comment.' So I did a little digging around. Apparently, AOL employees are covered by Cigna. Here's the AOL/Cigna benefit package for 2013.
Mon Feb 10, 2014 at 10:43 AM PT: From Cigna's white paper advising employers to consider stop loss insurance in order to limit employer reimbursement liability on costly claims:
Conditions resulting in claims greater than $1 million are more prevalent today due to advances in medical technology and improvements in life-extending care.