Update: One of the mothers, Deanna Fei, has spoken out eloquently about her case, and I think Tim Armstrong will rue the day he opened his mouth:
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.
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.
There’s further speculation that Armstrong and AOL are guilty of violating HIPAA – there’s no valid business reason for the CEO of the company to know anything about individual health care outcomes for employees, so his comments display a violation of the HIPAA data security provisions, and publicly sharing individually identifiable health care outcomes is a big no-no. I wonder how soon we’ll be seeing Tim in an orange jumpsuit?
End update.
Backlash from his recent public comments about Obamacare causing a supposed $7.1 million increase in health care premiums has caused the CEO of AOL, Tim Armstrong, to reverse course on the 401K benefit cuts and issue an apology to his staff for the comments he made about expensive babies.
In a letter to staff, Armstrong wrote:
“The leadership team and I listened to your feedback over the last week. 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. The Human Resource team will be in contact with all employees over the next week to explain the change and to answer any other benefits related questions you might have.”
The new 401(k) policy would no longer match contributions on a per-paycheck basis. Instead, matching contributions would be handed out in lump sum at the end of the year. Employees who left the company would not receive matching contributions for the year they departed.
Armstrong had cited Obamacare and two women who gave birth to “distressed babies” as reasons for the change. In his email to staffers today, Armstrong apologized for the remark about pregnancies.
Source: Huffington Post (Huffpo is owned by AOL)
The assertion that Obamacare caused the increase in premiums is every bit as ludicrous as the assertion that the “distressed babies” caused it.
The idea that costly pregnancies would increase AOL’s future employee benefit costs doesn’t make sense, said Gary Claxton, the co-director of the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation. Those expenses shouldn’t have any effect on costs. “There should be none. None,” he said.
Like most large companies, AOL is likely self-insured — meaning it bears the financial risk for employee medical costs and contracts with health insurance carriers to administer their health plans. AOL employed about 5,600 people at the end of 2012, according to company filings. That figure included 1,200 employees of Patch, the hyperlocal news service AOL recently sold. An AOL spokesman did not respond to an emailed question about the company’s insurance.
A self-insured plan either has money set aside to cover such claims or likely buys stop-loss reinsurance coverage to protect from unexpectedly high costs in a single year, he said. And a health insurance carrier bearing risk for a company that isn’t self-insured probably wouldn’t raise rates based on a one-time expense, Claxton said.
“Unless those babies are still sick and still extraordinarily expensive, it’s irrelevant. I mean, something that happened in 2012 should have no bearing on 2014,” Claxton said. Likewise, the $7.1 million excess cost Armstrong attributed to the Affordable Care Act is out of proportion with the size of the company’s workforce, he said.
Source: Huffington Post (Emphasis mine)
On a related note, it seems that Danfrom Waltham’s comment about AOL has gone missing, and he has not commented or written a post in several days. Has the fervent wish of the DFTT brigade been realized? Only time will tell, I guess…
