AOL Reverses Course On 401K Match; CEO Apologizes 123
An anonymous reader writes "When we last checked in with Tim Armstrong, the AOL CEO was demonstrating 'Leadership with a Capital L' to employees of the company's Patch local news subsidiary by summarily firing an employee in the middle of a conference call for taking photos. Armstrong continued to serve up tasty material for tech bloggers this past week, blaming $7.1 million in extra expenses from Obamacare, and for $2 million in expenses for 'two AOLers that had distressed babies', for a decision to hold all matching funds for employee 401K programs until the end of each calendar year. After a small firestorm in the press, and a petition from AOL employees unhappy with both the policy change and the way it was presented, Armstrong reversed course, reinstating the per-period match and apologizing for mentioning the individual employee cases (TechCrunch is an AOL subsidiary). Incidentally, Armstrong was originally following in the footsteps of IBM, which made similar changes to its 401K program that went into effect last year."
Re:Distressed Babies? (Score:5, Informative)
Um, yes. It's called "self insurance". For a large company, they will often outsource the administration to a regular insurance company but they pay the medical bills out of the company pocket. It makes sense because with ten thousand employees, you have enough of a pool to lessen the statistical variation percentage wise. So some years you spend a few percent more and some a few percent less. Insurance charges for this statistical pooling so the company can save money. I guess there were a couple of outlier expenses that broke the average. CEO shouldn't complain - while he expected cost savings, he agreed to take the risk.
COPIED ENTIRE SUMMARY !! (Score:4, Informative)
um whoever is doing submission checking should at least check that your not copying the ENTIRE summary from techcrunch... hence the subsidiary notice
Guys sort it out otherwise your going to get in trouble with lawyers and users !
John Jones
Re: Distressed Babies? (Score:1, Informative)
It's the other way around. Now the government owns the losses (funding the insurance subsidy, Medicaid expansion, etc.) and private insurers, drug-makers, hospitals, etc. keep the profits.
That's not socialism*. It's corporate welfare.
* (At least, not socialism as it was defined before Fox News took over the duty of defining "socialism and "communism" to mean "anything Obama does").