Oh my goodness…have you been hearing the AOL 401K news?
No?! How could you miss it?
A quick internet search revealed over One Million results for just those two keywords.
For those of you that have a need, let’s summarize:
Last week, AOL’s Tim Armstrong announced on CNBC, and then on a company wide conference call, that AOL would be cutting back on their 401k matching funds because the cost to the company of complying with the Affordable Care Act (ACA) were too onerous. What AOL claimed is that because 2 employees birthed (or their spouses did) “distressed babies” in the same year, it cost the company an unexpected $1 million.
One of those employee’s spouses is a writer. She was not too happy to have her premature daughter referred to as a “distressed baby.” She was also not happy that AOL violated the HIPAA laws by sharing her family’s medical information. And she said so in a letter which was published on Slate.
Well, here we are just a few days later and, surprise, AOL has reversed their position. They did so with a company-wide, apologetic email. Although one mom did say she received a personal phone call of apology.
The best article we found outlining this story was posted on Forbes over the weekend (though TechCrunch had the best graphic, no?).
Let’s start with Forbes’ headline: “Worst Way to Deliver Bad News to Employees.” Right?!
Apparently, the story goes back farther than last week. According to the Forbes article:
“…last fall, AOL leadership apparently decided that rather than pay into the plan throughout the year, they would provide a lump-sum payment at the end of the year. They’d save money by not having to contribute to the plans of those who leave the company at any point during the year.”
Ok, probably not a unique position given that many were concerned about unforseen costs of the ACA. Many companies struggled with whether to eat those costs, pass the costs on to their employees, or share the costs. You might recall that IBM made a similar choice in 2012. But they handled it so much better, and thus is passed through the news cycle with only a little criticism.
Our question to you is this: has your employer made a similarly unpopular decision?
Are you contemplating your options and wondering if you could afford individual or family health insurance coverage separate from your company’s benefits?
Since there are still a few weeks left of open enrollment, we would be happy to help you explore your options.
Please complete the form below and one of our experts will be in touch with you right away!
PS If you enjoyed this post, please do comment and share on each social media channel above so that your friends can join the conversation as well!