Monday, February 10, 2014

Counterpoint - "distressed babies"

This will likely not be a popular post. So be it. I don't judge people on their past. Making mistakes is important part of how people learn. Bloggers included.

Can some people stand to make due with a little more sensitivity? Sure...
Can some stand to make due with a little less, it's all about me sensitivity? Yes...

Aol. is in the news. Specifically, CEO Tim Armstrong is in the news over an answer he provided during a Town Hall meeting with employees; to address changes made to the company's 401K policy. The company changed it's monthly "matching" contribution to a "lump sum" year-end contribution.

In the interest of being transparent and helping employees understand the decision to change the company benefit, Mr. Anderson said this:

“Two things that happened in 2012,” Armstrong said. “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. 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.”

After these remarks were made, an AOL employee's wife, wrote this piece for Slate.

In the article, Deanna Fey comes forward to say: "For the record: It was me. I don’t work for AOL; my husband does. One of those “distressed babies” was our daughter."

She went on to write:

"Some commentators have questioned the implausibility of “million-dollar babies.” I have no expertise in health care costs, but I have a 3-inch thick folder of hospital bills that range from a few dollars and cents to the high six figures (before insurance adjustments). So even though it’s unlikely that AOL directly paid out those sums, I don’t take issue with Armstrong’s number.

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."

Where to begin with this...
First and foremost my heart does go out to the family. Having a pre-mature infant must be among one of the scariest things to face as a woman, a mother, and an expecting couple. The fact that your daughter is now starting to experience milestones, as other children do, is a testimate to the quality of healthcare in this country.
Now, on to the business side.
The CEO did not identify your family. YOU did.
  • Why? Why the need to? No HIPPA violation occurred here. Of the 5600 employees employed by AOL , you assumed he was citing your family. Truth be told, in a corporation that large, you have no way to positively identify that it was your daughter's claim that the CEO spoke of. In an effort to be (again the word: transparent)  he cited factors which led him to the decision to change the 401K benefit and how the company administered it. 
"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."
  • He didn't do any of that. You inferred that from what he said. At the end of the day, here's the thing... You would only be feeling the way you do, if there was truth in what you inferred from his remarks. That's kinda harsh, but it is reality
"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.
Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012—felt the need to announce a cut in employee benefits on the very day that he touted the best quarterly earnings in years. For me and my husband—who have been genuinely grateful for AOL’s benefits, which are actually quite generous—the hardest thing to bear has been the whiff of judgment in Armstrong's statement, as if we selfishly gobbled up an obscenely large slice of the collective health care pie."

Nowhere did I see that said by the company CEO. The fact is, your family had a large claims utilization year. That happens. Last year, my wife had one hospitalization and an outpatient surgery. We too, had a larger than normal claims utilization year. When a company has a large claims utilization period... premium for the group normally rises and those costs are shared by its employees. Higher risk=higher premium dollars.
To think however that high dollar cases like yours or mine do not have an affect or have impact the decision making process of a company's owner or Board of Directors is naïve. To take it personal... that's just unnecessary. You paid your premium and your entitled to all the care proscribed by your benefits plan. End of story. You have nothing to feel guilty for.  
Speaking of benefits... AOL is offering a benefits package, which you yourself described as "very generous".  Part of that benefits package includes matching 401K contributions. As with any employer, benefits change... based on the company's bottom line. Sometimes they change for the better and sometimes for the worse. No matter what however, there is no mandate about how much, how often or even IF an employer must offer additional benefits on top of salary.
A CEO salary of $12 million. Yeah, I agree it's pretty crazy, but that's what the Board has determined his worth to be. Can a company have a good year or even the best year; and then raise, lower or do nothing about employee benefits? Sure. Maybe they have a R & D project working. Maybe there is something on the horizon which will eat up a chunk of the company's cash reserves and to offset that... benefits must be reduced. Who knows? Your employer that's who. The Senior management team. Will they always be transparent with plans? Likely not. There is still classified/ need to know areas within every company.   
Did Tim specifically call you out?
Was he intentionally trying to make you feel bad?
Were the two babies cited as examples the only factors in the decision making process.
Very likely not.  

Was he making an effort to help your husband's co-workers understand the decision making process? Yes.
Did he utilize bad judgment in citing the two examples he did? 
Has he tried to rectify this with you personally? Based on what I've read, yes. The man has apologized. Accept it. Stop turning this into something it's not. An attack on your family.


  1. While I don't agree with how he cited the 'million dollar babies' as a reason for cut backs, his wife went overboard with this letter and all of the commotion she has caused. Wow.

    1. Kimberly, that's the point. In an effort to be transparent for the employees of the company. He cited medical cost utilization as a reason. He could have voted an HIV positive employee, whose drug costs are exorbitant or several employees families under going chemo treatment. He didn't. On the fly, while trying to explain the necessity. He cited two big examples, without identifying individual families. Don't get me wrong. I'm sure he would have said something different in hindsight, but when put on the spot he was not attacking this woman's family

  2. I hadn't heard about this anywhere, but I'm glad I stumbled on your post about it. Excellent points.

    1. Thank you and hey btw... Congrats on hitting 1K on the fan base :-)

  3. While so many companies are cutting or totally eliminating benefits and 401 k' is refreshing that AOL continues to provide such generous benefits to their employees. Along the same line..many employers would not even bother with an explanation. I back the CEO 100%..the woman blew this way out of proportion.


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