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Chairman and CEO of AOL, Tim Armstrong, speaks during the launch of the HTC One smartphone in London February 19, 2013. REUTERS/Toby Melville (BRITAIN - Tags: BUSINESS SCIENCE TECHNOLOGY TELECOMS) - RTR3DZSX
He apologized, but he's still an a-hole.
After making "distressed babies" into a derogatory hashtag overnight, and creating massive backlash among employees and in the media, AOL's CEO Tim Armstrong reversed course on the retirement benefits cut that started the fiasco. The company had announced that they were going to start paying out the company's contribution to employees' 401(k) plans in a lump sum at the end of the year. That could mean that employees stock gains during the year would be lost, and that people who left the company mid-year would lose out entirely. That's history.

Armstrong also apologized to his employees and to the families of the two "distressed babies" he brought up in the call as justification for this benefits cut. The mother of one of those babies (her husband works for AOL) wrote this article for Slate, blasting Armstrong.

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.
Armstrong should be fired for that violation of his employees' privacy, or at the very least sued. What Armstrong still hasn't apologized for or explained is how in the hell, in a company with more than 5,000 employees, the health care costs of just two could be so expensive to the company. It's something that has had health care and insurance experts scratching their heads over since Thursday, and there's still really no way anyone can come up with to figure out how AOL's bill for two families could be so high. The only possibility is that Armstrong purchased completely junk insurance for the company, a decision that would have made headlines long before this story blew up. That scenario is highly unlikely, and AOL isn't releasing any information about how it provides health insurance.

Armstrong also didn't explain how Obamacare cost the company $7.1 million, his other justification for the benefits cut. There's nothing new in the law that has resulted in that massive of a new expenditure. Armstrong just made that up, because he's like so many asshole CEOs before him—blaming every business decision that is going to hurt workers but save the company a lot of money on Obamacare. But at least this one got publicly shamed for it.

Originally posted to Joan McCarter on Mon Feb 10, 2014 at 08:29 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Jerk Headstrong, boy CEO... n/t (12+ / 0-)

    Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

    by JeffW on Mon Feb 10, 2014 at 08:38:04 AM PST

    •  He should be fired... (3+ / 0-)
      Recommended by:
      OrdinaryIowan, vcmvo2, Calamity Jean

      These stupid comments come on the heels of the collapse of Patch, his pet project to combine corporate overlordism with  hyperlocal news reporting.

      It was a flop, and AOL lost millions. He also fired about 1,000 people who worked hard to make Patch successful. It's Armstrong's turn to be fired.

      •  Usual CEO mindset - never apologize, never explain (1+ / 0-)
        Recommended by:
        Calamity Jean

        and NEVER EVER admit a mistake. Messes up the persona - gotta make sure people know he's got the vision thing going on.

        Your black cards can make you money, so you hide them when you're able; in the land of milk and honey, you must put them on the table - Steely Dan

        by OrdinaryIowan on Mon Feb 10, 2014 at 02:05:59 PM PST

        [ Parent ]

  •  Good, he's an overpaid assho!e like most of the (14+ / 0-)

    Evil CEO class. & he showed his true heartless depraved self.

    nosotros no somos estúpidos

    by a2nite on Mon Feb 10, 2014 at 08:39:58 AM PST

  •  CEO: the only non-fire-able position, apparently. (11+ / 0-)

    Unless the Feds needs to step in for some reason...

    Any of his underlings would have been out the door, possibly without severance pay, for a fraction of what he's displayed in that single voluntary speech.

  •  In Another Diary It Was Said They Self Insure nt (6+ / 0-)

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Mon Feb 10, 2014 at 08:49:30 AM PST

    •  Even if they self insure (7+ / 0-)

      with a large employee pool and reinsurance, there's really no way they could be on the hook for that much for just two medical events.

      "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 10:02:23 AM PST

      [ Parent ]

      •  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

              [ Parent ]

              •  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 ]

      •  not every company that self-insures (6+ / 0-)

        gets reinsurance. And given that those who do are generally doing so only to protect against catastrophes, it would not shock me if their specific excess insurance (the amount per claim above which they are insured) is pretty high. A million seems high, but I confess I don't know the ins and outs of the levels most companies choose. But the way he said it sounded like a reinsurance level sort of thing.

        That said, I think he was spouting bullshit. Mostly because what he said about the extra costs associated with Obamacare WERE bullshit for sure, and I have no reason to think he was honest about the cost for the "distressed babies" (this still makes me cringe).

        Want a progressive global warming novel, not a right wing rant? Go to www.edwardgtalbot.com and check out New World Orders

        by eparrot on Mon Feb 10, 2014 at 10:16:00 AM PST

        [ Parent ]

        •  I work for a firm that sells a great deal... (5+ / 0-)

          ...of excess risk insurance, although I'm not involved in the day-to-day underwriting of it. My understanding is that a $1 million specific deductible would be pretty high, but not unheard of. It would have the effect of making the company's excess risk premium really low.

          So basically, the company took a bet that there wouldn't be many million-dollar claims, in order to not pay much for insurance. They lost that bet.

          •  What CEO worth his or her salt (1+ / 0-)
            Recommended by:
            vcmvo2

            would make that bet with more than 5,000 employees?

            Doesn't make sense.

            "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 10:33:27 AM PST

            [ Parent ]

            •  Pretty certain you answered your own question (4+ / 0-)
              Recommended by:
              mspicata, ahumbleopinion, BachFan, eparrot

              As an aside, you should look into what goes on with self insurance some time. Health insurance companies take on ASO (Administrative Services Only) contracts -- which means that they shuffle paper around when there's a claim, but they don't pay the claims. The self insured company does, out of its own pool of money. That doesn't stop the health insurers from making a good buck on the process.

              This is usually opaque to the employees. They have an insurance card, they get bills that have the insurance company's name on them, but they don't know that their employer is the one paying the claims.

              Frankly, I haven't met a health insurance company yet that was any good at shuffling paper -- even when it's the only thing they have to do. You have to wonder if delayed/denied claims is just part of the true service they provide.

              •  I think delayed/denied claims is a feature, not a (1+ / 0-)
                Recommended by:
                eparrot

                bug.  Some % of people will accept the non payment and thus the company will duck having to pay legitimate claims.  Those with the energy to fight often get their claims paid after the first delay/deny tactic.  Also, using the insurance company as the processor allows the company to duck blame, even if they are the ones calling the shots.

                “The future depends entirely on what each of us does every day.” Gloria Steinem

                by ahumbleopinion on Mon Feb 10, 2014 at 11:23:27 AM PST

                [ Parent ]

            •  That depends (0+ / 0-)

              Again, I think he was bullshitting for some of the reasons you stated in your diary, but run the numbers:

              If you have 5000 employees with full benefits, it wouldn't be unusual for a Fortune 500 company that DIDN'T self insure to spend somewhere between 25 million and 65 million on insurance premiums. The idea behind self-insuring of course is to bring those numbers down, but we could use thirty million dollars as a round number that a company is targeting if it self insures.

              A couple of 500,000 illnesses likely won't be worth paying up front to avoid, so on the surface having reinsurance that kicked in at a million dollars for one individual and also kicked in at 45 million aggregate makes some sense.

              A couple of other commenters who seem to have direct experience with this suggested something similar.

              Want a progressive global warming novel, not a right wing rant? Go to www.edwardgtalbot.com and check out New World Orders

              by eparrot on Mon Feb 10, 2014 at 03:06:06 PM PST

              [ Parent ]

        •  Reinsurance, if purchased outside the company, (6+ / 0-)

          is usually coverage on an aggregate level of claims.  It's quite possible to have significantly higher claim costs -- a genuine effect on the bottom line -- without triggering payment from the reinsurer.  And reinsurance inside the company is really a shell game to boost profits in good claim years.

          I think he was spouting bullshit, too, even on the large claims.  If you self-insure and you reinsure yourself -- all perfectly legal -- then by definition you open yourself up to losses when the occasional high claim comes along.  In other words, it's your own fault for opening yourself up to risk by trying to squeeze every last dime of profit out of your benefits package.  

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

          by mspicata on Mon Feb 10, 2014 at 10:35:42 AM PST

          [ Parent ]

        •  A million for that sort of event (1+ / 0-)
          Recommended by:
          eparrot

          is not that high.

      •  That's not really true (3+ / 0-)
        Recommended by:
        BachFan, mspicata, vcmvo2

        The Atlantic article is rather incomplete. $50,000 may be an average cost for a preemie, but for the kind of intense, round-the-clock NICU/PICU care for months that a severe case requires, $50,000 could be spent in less than one week. (We have experience with a bill that approached $8000/day). I don't know the length of time those infants were hospitalized, or what procedures they needed, but it isn't out of the realm of possibility that with surgeries and other costs that their costs hit the million dollar mark.

        The reinsurance question is another; I've seen firms with $500,000 thresholds that are 1/4 the size of AOL. It wouldn't be surprising at all for them to believe it less expensive to take on either an aggregate cap or a high-deductible reinsurance plan.

        And, for the record, I find much of his story to be questionable. This part, not so much.

        No, you can't fix stupid. You OUTNUMBER stupid. -Wildthumb, 1/10/2013

        by newinfluence on Mon Feb 10, 2014 at 11:32:15 AM PST

        [ Parent ]

  •  Deferred compensation is not a benefit. (7+ / 0-)

    It is an entitlement, an earned right.

    http://hannah.smith-family.com

    by hannah on Mon Feb 10, 2014 at 09:28:48 AM PST

  •  Like many large firms, they may self-insure (4+ / 0-)
    Recommended by:
    shoeless, mconvente, Mage11an, BachFan

    I.e., they are financially responsible for paying the claims and they receive the value of the premiums, and retain a third party insurance company (Blue Shield, Aetna, whoever) simply to administer the plan (collect premiums, process claims, etc.).

    "[W]e shall see the reign of witches pass over . . . and the people, recovering their true spirit, restore their government to its true principles." Jefferson

    by RenMin on Mon Feb 10, 2014 at 09:36:41 AM PST

    •  And even if (6+ / 0-)
      Recommended by:
      koosah, tobendaro, Columba, Tunk, shoeless, PhilW

      they self insure, they wouldn't be on the hook for that much. A large employee pool—more than 5,000—and reinsurance would cushion them. As is pretty much explained in the link I have in the story.

      "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 10:03:54 AM PST

      [ Parent ]

      •  Reinsurance might (1+ / 0-)
        Recommended by:
        mspicata

        but just a large pool doesn't necessarily mean they would have enough premium reserves from that plan year.

        It's rare, but there are indeed some years where there are a lot of high dollar claims such that the loss ratio would be over 100%.  That's the nature of the system.  With self-insurance, you're on the hook for that.  Perhaps you can mitigate with a re-insurance policy, but they need to have that in the first place.

        "Give me a lever long enough... and I shall move the world." - Archimedes

        by mconvente on Mon Feb 10, 2014 at 10:41:19 AM PST

        [ Parent ]

    •  Only Unless Things Have Changed (8+ / 0-)
      I.e., they are financially responsible for paying the claims and they receive the value of the premiums, and retain a third party insurance company (Blue Shield, Aetna, whoever) simply to administer the plan (collect premiums, process claims, etc.).
      I worked for AOL for 13 years and have several buddies that still do. While I was with them they never self-insured (they use United Healthcare). Checking with at least one of my pals who is still there, that still seems to be the case.

      Considering this is the same guy who condones mass layoffs by conference call, I am leaning more toward general douchebaggery on Armstrong's part.

      At least this time he got called on it.

    •  My company self-insures -- HR tries to cut costs (3+ / 0-)
      Recommended by:
      davehouck, mspicata, DMentalist

      My company self-insures -- and so our HR and benefits people are not on the side of the employees.  I found this out the hard way when we had a denied claim to dispute.  Claims are still processed (and approved or denied) by Anthem -- but when I went to our benefits office to try to get some help with a complaint, they were definitely on the side of Anthem and were much more unpleasant than the Anthem people we talked to about the dispute.

      •  Wonder if an HR screw-up might be the real reason (0+ / 0-)

            that a couple of employees ended up costing the company $2 million in healthcare expenses.

             I had an experience with my employer when I decided to change my hours.  I wasn't REDUCING my hours, just working different hours...but somehow HR got its wires crossed and got the idea that I was reducing my hours to part-time, and gleefully jumped on the opportunity to terminate my full-time insurance benefits without notice.  I didn't even realize that it had happened until a couple months later.  

             Fortunately I was able to work it out and have my benefits restored retroactively.  However, it is my understanding that in situations like that, where an employee who is legally entitled to benefits suffers a lapse in coverage due to an employer error, the employer is on the hook for ALL of the employee's medical expenses which would have otherwise been covered by insurance.  

              Considering AOL's recent decision to close-down the immensely popular Winamp and Shoutcast, before realizing, "Hey...if we can't figure out how to make money off this, at least we can SELL it to somebody else who can..." it's apparent that the company isn't very well-organized.  

             So it wouldn't surprise me at all if the reason that AOL's medical expenses for employees were $2 million higher than anticipated was simply because some clerk in the HR department screwed up the paperwork.

  •  Odd definition of transparency (10+ / 0-)
    Armstrong also didn't explain how Obamacare cost the company $7.1 million, his other justification for the benefits cut.
    Rather than presenting an itemized breakdown of how Obamacare singlularly costs AOL $7.1 million--an extraordinary claim--he opts for revealing the cost of two complicated pregnancies on a conference call.

    "I am not interested in picking up crumbs of compassion thrown from the table of someone who considers himself my master. I want the full menu of rights." (From "You Said a Mouthful" by Bishop Desmond Tutu - South African bishop & activist, b.1931)

    by FiredUpInCA on Mon Feb 10, 2014 at 09:47:45 AM PST

  •  He apologized - but he's still an A-hole (5+ / 0-)
    Recommended by:
    Sunspots, FiredUpInCA, koosah, JeffW, shoeless

    I wonder if he got the DBAD memo..

    Dear future generations: Please accept our apologies, We were roaring drunk on petroleum -Kurt Vonnegut

    by Anthony Page aka SecondComing on Mon Feb 10, 2014 at 09:51:51 AM PST

  •  more of his double-speak: "We have to eat those (8+ / 0-)

    costs [due to Obamacare, etc.] so we have to make cuts elsewhere."

    Um....? How is that "eating the costs," exactly?

    If the plutocrats begin the program, we will end it. -- Eugene Debs.

    by livjack on Mon Feb 10, 2014 at 10:05:41 AM PST

  •  What a dumbass.... (9+ / 0-)

    Somebody this manipulatively stupid - and with such low respect for his employees (he, one person, gets paid more than the total cost of the supposed insurance increase?!!?!) deserves to be fired.

    •  Truly, (5+ / 0-)

      but I think that his mindset is so prevalent among his peers they just don't see the problem with anything he did.  There is probably a lot of head scratching and pouting about being a victim happening in his circle of buds and cohorts.

      Everyone! Arms akimbo! 68351

      by tobendaro on Mon Feb 10, 2014 at 10:14:17 AM PST

      [ Parent ]

    •  Wasn't the conference call with investors (1+ / 0-)
      Recommended by:
      RightHeaded

      and stock holders?

      This CEO telling blatant lies to investors and stock holders while acting in his official capacity should be held accountable by someone. Misleading the public regarding costs and expenses was a crime a few years ago. Has that been deregulated as well?

      Where's DOJ, SEC, FBI, etc?

      "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." -- Groucho Marx

      by Gordon20024 on Mon Feb 10, 2014 at 10:37:54 AM PST

      [ Parent ]

  •  Why does AOL even exist anymore? (11+ / 0-)

    If the plutocrats begin the program, we will end it. -- Eugene Debs.

    by livjack on Mon Feb 10, 2014 at 10:07:41 AM PST

  •  Until this story surfaced (12+ / 0-)

    I had no idea AOL was still around.

    1. Books are for use.

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

  •  I said it before (8+ / 0-)

    Iv'e posted this in 2 other diaries. I called AOL and told them how I felt about his statements, Like thousands of others. He reversed himself. Public shaming works. Call your Congressman or whomever. It will make a difference

    “He talks a lot and he's not very bright. And that's a combination I like in Republicans.” James Carville

    by Mokislab on Mon Feb 10, 2014 at 10:12:08 AM PST

  •  He is definitely the front runner (6+ / 0-)

    In the Asshole of the Year competition.
    An amazing feat considering he doesn't even work at Fox.

  •  shiny tin object... (1+ / 0-)
    Recommended by:
    shoeless

    Such a golden boy, so enchanted with himself, so seemingly on the top of his game, such a wolf in not so much of a disguise.

    Maybe he should visit King Tut's tomb to see what happens to those who worship metal over flesh.  

    sh

  •  He's Spying on You, Too (1+ / 0-)
    Recommended by:
    shoeless

    You think AOL isn't scanning the contents of all the email and comments its users are sending through its system? Of course it is.

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

    by DocGonzo on Mon Feb 10, 2014 at 10:14:41 AM PST

  •  I don't understand how that article can possibly (4+ / 0-)
    Recommended by:
    koosah, mspicata, Catte Nappe, BachFan

    claim that there aren't million dollar babies. Of course there are. The birth itself isn't the million dollars, it's the weeks and weeks of NICU and surgeries that may occur.

    Many of these pregnancies seem uncomplicated until they're not.

    Fry, don't be a hero! It's not covered by our health plan!

    by elfling on Mon Feb 10, 2014 at 10:21:39 AM PST

  •  Easy explanation - he's lying (3+ / 0-)
    Recommended by:
    tardis10, JeffW, Babsnc

    He's fostered a culture at AOL where his decisions aren't questioned so he thought that bubble extended outside teh company.

    "Don't be defeatist, dear. It's very middle class." - Violet Crawley

    by nightsweat on Mon Feb 10, 2014 at 10:22:27 AM PST

  •  bandwagon (2+ / 0-)
    Recommended by:
    JeffW, ahumbleopinion

    Selfish businessmen always climb aboard when there is a "rational" to cut pay/benefits.   Most here understand that capitalism demands ceos maximize profits.  Few realize that that's why we need to modify "pure" capitalism--it's built in semi-slavery.  Having lost union power, things will only get worse.

    Actions speak louder than petitions.

    by melvynny on Mon Feb 10, 2014 at 10:22:51 AM PST

  •  Armstrong never did like pregnant employees (14+ / 0-)

    Tim Armstrong Has a History of Targeting Pregnant Employees

    According to the lawsuit, Armstrong promoted Elwell to Google's national sales director of North America in late 2003 and even singled out her contribution to Google going public in 2004. In April 2004, Elwell told Armstrong she was having medical problems with her pregnancy (with quadruplets) that would prevent her from traveling for a "few weeks," which is when Armstrong fell off the rails.

    He demoted Elwell the same month that she lost two of her unborn children. He told colleagues she was moved to operations because she could not travel, he called her an "HR nightmare" and said he no longer wanted her in the New York office, and eventually fired her over the phone. To inform her about the demotion, "Armstrong showed Elwell an organizational chart from which Elwell's position had been deleted."

  •  Gee, that's just awful. Poor AOL. Hey, I know! (5+ / 0-)

    Guess what would save that poor corporation from having to pay for such expensive babies?  How about...

    UNIVERSAL SINGLE PAYER COVERAGE/SOCIALIZED MEDICINE.

    They could spread out the cost of those few expensive distressed babies over the entire population that way.  Paying for them wouldn't be solely AOL's problem to solve anymore.    

    (Side note: There is quite a big field in the contest this year for the award for "Rich Person Making The Most Heinously Tone-Deaf Statement."  It's almost like they think it's a good award to win.)

    Somebody told me that you had a boyfriend who looked a girlfriend that I had in February of last year.

    by koosah on Mon Feb 10, 2014 at 10:26:18 AM PST

  •  HIPAA violation? (4+ / 0-)

    Disclosure of health information has been tightened with the latest iteration of HIPAA. From my reading this kind of disclosure certainly qualifies as a violation...I hope their compliance officer (if they have one), is preparing a disclosure!

    •  Since he didn't refer to the employees (3+ / 0-)
      Recommended by:
      WillR, Catte Nappe, BachFan

      or their spouses by name, he may be technically covered under HIPAA. Maybe it's like saying 10% of employees missed time with the flu, so don't forget to get your flu shot this year.

      There's only one rule that I know of, babies -- goddammit, you've got to be kind. -- Kurt Vonnegut

      by Cali Scribe on Mon Feb 10, 2014 at 10:44:22 AM PST

      [ Parent ]

      •  This cuts it awfully close to the line, though (2+ / 0-)
        Recommended by:
        mspicata, FiredUpInCA

        Out of 5k employees, it wouldn't be hard for someone to figure out the answers to a couple of fairly simple questions to figure out who it was:

        1) who had a baby in the past year?

        2) Of those, which ones had problems with the child or delivery?

        The answer to #1 would likely bring the possible employees down to a relatively small number.  From there, it'd be easy to ask around and see if anyone had heard if so-and-so had had a difficult pregnancy or if Mr. Smith down in accounting's new child was doing ok.

  •  If he decided to cut costs because... (3+ / 0-)

    of "distressed babies", should he not cut his salary when he makes a "distressed idiotic decision" that costs his company the goodwill of the public, thus decreasing the stock price, and or revenues?

    By the authority vested in me by Kaiser Wilhelm II, I pronounce you man and wife. Proceed with the execution.

    by HarryParatestis on Mon Feb 10, 2014 at 10:30:18 AM PST

  •  What a creep! (2+ / 0-)
    Recommended by:
    koosah, RightHeaded

    Glad there was a backlash so he had to back down.

    "Religion is what keeps the poor from murdering the rich."--Napoleon

    by Diana in NoVa on Mon Feb 10, 2014 at 10:30:30 AM PST

  •  He's in the 1% because he works harder than 99% (3+ / 0-)
    Recommended by:
    Caniac41, koosah, scribeboy

    at being an asshole.

    Enough is enough! I have had it with these motherfu*king snows on this motherfu*king plain!

    by shoeless on Mon Feb 10, 2014 at 10:30:35 AM PST

  •  This is another illustration of why (3+ / 0-)

    the best health insurance system is a universal system covering all 300+ million Americans.

    Free-market capitalism is great for many industries, but for health insurance, we want to spread the risk as widely as possible to as large a pool as possible so that one or two negative events won't break a smaller group.  Why should I have to worry that my retirement security is in jeopardy because the lady in the next cubicle got pregnant and might have complications?

    This shirt is dry clean only. Which means... it's dirty. -- Mitch Hedberg

    by Greasy Grant on Mon Feb 10, 2014 at 10:30:36 AM PST

  •  IBM did a samilar thing over a year ago (2+ / 0-)
    Recommended by:
    koosah, FiredUpInCA

    Making 401(k) contribution at the end of the year.  Employees do not get the benefit of any gains made during the year and if you leave during the year, you get nothing.  All to reduce expenses, increase cash flow and make the Gods of Wall St. happier.

    •  But they didn't blame it on the ACA, did they? (2+ / 0-)
      Recommended by:
      FiredUpInCA, BachFan

      If a company wants to cut benefits, and there's no union contract, they are free to do so, and both employees and investors can respond as appropriate. The problem with AOL was announcing that the reason they had to do it was (1) Obamacare and (2) two employees with high-needs babies.

    •  The mainstream media spent the last week (0+ / 0-)
      IBM did a samilar thing over a year ago. Making 401(k) contribution at the end of the year.  Employees do not get the benefit of any gains made during the year and if you leave during the year, you get nothing.  All to reduce expenses, increase cash flow and make the Gods of Wall St. happier.
      trying to convince everyone that job freedom equals job loss, while job lock is normal and preferred.

      "I am not interested in picking up crumbs of compassion thrown from the table of someone who considers himself my master. I want the full menu of rights." (From "You Said a Mouthful" by Bishop Desmond Tutu - South African bishop & activist, b.1931)

      by FiredUpInCA on Mon Feb 10, 2014 at 11:19:36 AM PST

      [ Parent ]

  •  Out these guys! Name them, shame them. (2+ / 0-)
    Recommended by:
    koosah, FiredUpInCA

    News reports and columns say other businessmen are blaming health insurance and Obamacare for all sorts of decisions from hiring/firing to benefits, but very few are named beyond Papa John's and Westgate realty.

    Please NAME these CEOs and corporations, so we can shame them, and make informed consumer decisions as well!

    Okay, the Government says you MUST abort your child. NOW do you get it?

    by Catskill Julie on Mon Feb 10, 2014 at 10:35:24 AM PST

  •  Tim Armstrong: "You've Got Fail." n/t (8+ / 0-)

    This shirt is dry clean only. Which means... it's dirty. -- Mitch Hedberg

    by Greasy Grant on Mon Feb 10, 2014 at 10:35:36 AM PST

  •  I'd be surprised if AOL isn't self-insured (1+ / 0-)
    Recommended by:
    FiredUpInCA

    The administration is through an insurance company but the company pays the bills. However, companies that self-insure generally purchase stop loss so they aren't on the hook for catastrophic claims.

  •  Frank Luntz was on CBS news this morning (3+ / 0-)
    Recommended by:
    koosah, DrTerwilliker, FiredUpInCA

    trying to salvage Tim Armstrong's anti-ACA message.  Between the lines Luntz was saying "how can we lie about Obamacare if we have such incompetent liars".

  •  Another sad case of Romneyitis, the CEO disease (1+ / 0-)
    Recommended by:
    Catte Nappe

    Seriously, how effing dumb do you have to be not to figure out that the kind of BS you engage in around the bar at DAVOS or hanging out with the uber millionaire class at other 'events' is probably not the kind of thing that will go over well with the general populace?

  •  Too Late (2+ / 0-)
    Recommended by:
    FiredUpInCA, scribeboy

    The guy is a shit head and he and his company should go the way of Circuit City.

  •  distressed babies... (6+ / 0-)

    yeah, my small, now corporate (got that all-important ceo a few years ago and then all employee benefits went in the toilet), group of doctors built a new 24 million dollar building.  one of their big boohoos was an employee's baby that needed a liver transplant and therefore, the rest of us just couldn't have our good health insurance anymore...we'd have to pay more and sign "wellness pledges" and just generally suck up to the man to keep our health insurance.
    i retired.  i didn't sign up for this bullshit.  i can live happily on beans and rice for the rest of my life so i don't have to put up with this psychopathic bullshit anymore.

  •  In my mind the only way this makes sense at all (2+ / 0-)
    Recommended by:
    FiredUpInCA, Catte Nappe

    is if AOL, like many large corporations, self insures it's employees. If that is the case then AOL likely makes profits normally from their health insurance which they count on for their quarterly statement. When they have big payouts they likely would lose money that quarter which drives the bean counters Armstrong crazy.

    Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

    by RMForbes on Mon Feb 10, 2014 at 10:59:51 AM PST

  •  Self insured (0+ / 0-)

    As I understand it, he didn't "purchase" insurance, the company is self insured. That means they have relatively small "pool" of 5000 people which I suppose could result in extreme expenses if you had two patients with extraordinary needs and lengthy hospital stays and weren't setting aside enough for such exigencies.

    “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

    by Catte Nappe on Mon Feb 10, 2014 at 11:05:50 AM PST

  •  Dollars to donuts (0+ / 0-)

    AOL self-insures.  That's why he knows which employees caused the higher costs.  That's why he can account that two cases drove up the cost of the total pool.

    And I bet that AOL contributes no subsidy itself to the pool, just depends on the pool effects of its workforce to keep the amount of "premiums" low.

    But that raises an interesting question.  Is AOL profiting from difference in premiums pooled and insurance expenses?

    Time for a thorough audit.

    50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

    by TarheelDem on Mon Feb 10, 2014 at 11:07:56 AM PST

    •  Self-insurers are supposed to separate (1+ / 0-)
      Recommended by:
      vcmvo2

      medical information from employment files -- to prevent employees from being penalized for health conditions, which is illegal. Usually they have it in two separate departments, or (more common) hire a benefits administrator company (often Blue Cross or United Health or some other insurance carrier) to manage all the medical claims.

      So a CEO who has access to every employee's family's medical files is violating the HIPAA privacy laws, and risks violating the ADA as well.

      •  Supposed to and actually does (1+ / 0-)
        Recommended by:
        schnecke21

        ...are today two dramatically different things.  He doesn't need access to every employee's medical records to do what he did, he needs and exception report that shows all of the the charges greater than 3-sigma for the year, the names of the employees, the amounts, and a summary of the condition.

        I'm sure a good corporate lawyer could find some way to weasel around the letter of the law.

        Hiring a benefits administrating company still allows some types of detail information to be reported, and if there are 2 instances of a specific condition it is rather easy in most companies to find out who it is.

        ADA is routinely violated unless someone has deep enough pockets to sue.

        50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

        by TarheelDem on Mon Feb 10, 2014 at 01:41:04 PM PST

        [ Parent ]

  •  Maybe "Obamacare" doesn't work anymore (2+ / 0-)
    Recommended by:
    FiredUpInCA, WisVoter

    as an all-purpose excuse for whatever cost-cutting a company wants to do -- maybe the crowdsourcing of fact-checking has made even the mainstream media go, "Huh? How does that even make sense? And did you really have to go there?"

  •  So. Now he's a Sorry Asshole. (1+ / 0-)
    Recommended by:
    koosah

    Peace on Earth was all it said.

    by BobBlueMass on Mon Feb 10, 2014 at 11:57:17 AM PST

  •  As long as any company can afford to pay (1+ / 0-)
    Recommended by:
    vcmvo2

    its CEO millions of dollars, said CEO must have some gall to say a DAMN WORD about anything his employees are getting in the way of benefits and retirement.

    We could do so much to repair income inequality in this country, and assholes like this like and Sam Zell would STILL be obscenely wealthy. But no. They squeal like stuck pigs at the mere mention and nickel and dime their employees. As far as they are concerned, there is always more money to be had -- by them -- and enough is never enough. (And of course they earned it, unlike the rest of us bums.)  Blame the "necessary" cuts on someone's terribly sick baby (disgusting).  

  •  Coporate America will honor (0+ / 0-)

    their financial obligations as long as they benefit 100% from the arrangement. But lower that benefit to 99%, and they bitch and moan about government regulations and freedumbs and trot out the PR squad to all the usual sources to broadcast their complaints.

    I'm living in America, and in America you're on your own. America's not a country. It's just a business.

    by CFAmick on Mon Feb 10, 2014 at 12:27:41 PM PST

  •  He should be fired... (0+ / 0-)

    ...Other executives at AOL have been fired for less. Time to throw this clown overboard.

  •  it is pretty simple (0+ / 0-)

    AOL has insurance in place; but this guy is a sociopath like Jamie Dimon and many, many other CEOs. They think whatever they say is the truth...because they say it.

    To any NSA contractor reading this; FU

    by Himself on Mon Feb 10, 2014 at 03:53:40 PM PST

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