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View Diary: AOL CEO reverses benefits cut decision (101 comments)

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  •  Ah, there's the rub. (5+ / 0-)
    Recommended by:
    shoeless, elfling, mconvente, zmom, BachFan

    They don't have to buy reinsurance.  That part of the Atlantic article is a bit misleading.  What many self-insuring companies do is reinsure themselves, with an offshore subsidiary.  When big claims come (and severely premie babies certainly qualify), the losses are directly on the company.  OTOH, in normal years the reinsurance subsidiary books a profit.

    "Get over it...and get out of the way." -- Gov. Steve Beshear (D-KY)

    by mspicata on Mon Feb 10, 2014 at 10:13:59 AM PST

    [ Parent ]

    •  It's Profitable (4+ / 0-)
      Recommended by:
      shoeless, RUNDOWN, dewtx, PhilW

      If it weren't more profitable to self-insure, they'd use an outside insurer like everyone else. Like you say.

      There's no rub.

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Mon Feb 10, 2014 at 10:16:22 AM PST

      [ Parent ]

      •  It's not always profitable. (1+ / 0-)
        Recommended by:
        ahumbleopinion

        And it probably wasn't that year.  And most large employers self-insure, taking in-house the risk of losses in exchange for lower expense in most years.

        "Get over it...and get out of the way." -- Gov. Steve Beshear (D-KY)

        by mspicata on Mon Feb 10, 2014 at 10:29:00 AM PST

        [ Parent ]

        •  Profitable (0+ / 0-)

          Insurance isn't always profitable: it's statistical, so it's net profitable across multiple policies and periods of time. Whether it's profitable in a single year is immaterial. Or else they wouldn't do it, or they'd sell the unit after a losing year.

          I don't understand why we're arguing. It's hairsplitting.

          "When the going gets weird, the weird turn pro." - HST

          by DocGonzo on Mon Feb 10, 2014 at 12:44:45 PM PST

          [ Parent ]

          •  Sorry if you thought we were arguing. (0+ / 0-)

            The rub I was referring to was the reinsurance, not the self-insurance.  As for the latter, it doesn't have to be profitable to be useful; cheaper than buying insurance from a carrier is sufficient.  At a certain size, statistically, it makes better business sense to self-insure.  The issue really is the reinsurance.

            "Get over it...and get out of the way." -- Gov. Steve Beshear (D-KY)

            by mspicata on Mon Feb 10, 2014 at 01:43:12 PM PST

            [ Parent ]

    •  AOL isn't (6+ / 0-)

      even confirming that they do self-insure.

      Even if they do, and don't reinsure or use a scheme as you describe, that's an extremely irresponsible approach for a CEO of a company—even one this big—to take.

      Never mind the fact that we already know he's a liar because of the $7.1 million in Obamacare whopper.

      "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

      by Joan McCarter on Mon Feb 10, 2014 at 10:32:27 AM PST

      [ Parent ]

      •  No argument on irresponsible. (2+ / 0-)
        Recommended by:
        ahumbleopinion, BachFan

        Nonetheless, it's not at all uncommon.  What IS uncommon is whining when your bet goes against you, which is what the CEO did.

        "Get over it...and get out of the way." -- Gov. Steve Beshear (D-KY)

        by mspicata on Mon Feb 10, 2014 at 10:40:13 AM PST

        [ Parent ]

        •  And blaming it (5+ / 0-)
          Recommended by:
          RightHeaded, mspicata, Babsnc, BachFan, vcmvo2

          on employees. What a colossal dick.

          "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

          by Joan McCarter on Mon Feb 10, 2014 at 10:42:58 AM PST

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          •  I don't get (0+ / 0-)

            how a couple of high health insurance payouts has anything to do with a 401(k).

            •  All lumped in (2+ / 0-)
              Recommended by:
              BachFan, koosah

              as benefits. Health care spending isn't related to retirement spending except as part of the benefits package. It was Armstrong's really inept way of telling all these people who were losing some retirement benefits that AOL really is looking out for them because they helped these two families. That he then exposed to scrutiny and blame by all their coworkers.

              "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

              by Joan McCarter on Mon Feb 10, 2014 at 11:49:34 AM PST

              [ Parent ]

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