AOL has decided that it will cut back its contributions to employees' 401(k)s. When employees complained about this fact in an open letter to Armstrong, he responded by telling employees it was Obamacare's fault. Oh, and those two women who are your co-workers who had sick babies last year. Yes, that's how much of an asshole he is.
"As a CEO and as a management team, we have to decide: Do we pass the $7.1 million of Obamacare cost to our employees? Or do we try to eat as much of that as possible and cut benefits?," said Armstrong in the CNBC interview.Ok, let's stop here for a bit. $7.1 million in increased Obamacare costs? How? AOL is a huge company, which provided health insurance benefits to employees before Obamacare. Since it was already offering benefits, it didn't come under the employer mandate (which doesn't go into effect for another year, anyway). So Armstrong would have to be asserting that Cigna, their provider, decided to charge AOL $7.1 million more this year for health insurance? Because of Obamacare? Bullshit. Perhaps understanding that this sounded like bullshit, Armstrong dug deeper, blaming the increase—and this is really assholish—on two employees.
"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," said Armstrong, according to a transcript first obtained 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."So, how did AOL pay a million dollars for each baby? Distress payments to the parents? Because AOL's insurance company would have covered the medical costs, which is what insurance companies do. Is Armstrong now blaming a $7.1 million increase in health insurance costs for the whole company on two employees? Once again, bullshit.
By the way, on the same day this all went down, AOL sent a press release titled "AOL delivers strongest revenue growth in a decade." Assholes.
Follow me below the fold for AOL's pathetic attempt at damage control.
According to sources close to senior management, two AOL employees (not necessarily women) had new babies come into their families last year. Both babies were sick. The families got, from AOL, all the money owed to them through their health care benefits. It wasn't enough. AOL paid more – roughly $2 million more. $2 million "above and beyond" what was obligated. It was an act of generosity, the kind that's a no brainer between family. And that was supposed to be Armstrong's point, that, despite the belt tightening on the 401k matching, AOL was still a family.Okay, so annual caps on insurance apparently kicked in. Guess what? Under Obamacare, they don't exist anymore. AOL will never again have to kick in extra money to cover catastrophic illnesses for employees or their families. And, hey, Armstrong could have covered that out of his own salary and still done pretty well.
There's still no explanation why AOL has a "$7.1 million bill from the Obamacare act in general." Are they paying their employees so much ($250,000) that they all fit into the higher Medicare tax bracket? Doesn't seem likely. Do they have a branch that manufactures medical devices, so they have that excise tax? It's still a bullshit claim.