Asa Mathat


Earlier today, a controversy arose over changes to AOL’s 401(k) plan that some employees chafed at. When AOL CEO Tim Armstrong used an example of the rising costs of all benefits by using the example of the high prices related to the care of two “distressed babies” of AOL employees, tensions increased.

Said Armstrong in a town hall meeting of staffers, part:

“We had a $7.1 million bill from the Obamacare act in general and we had multiple other things that happened at the company healthcare-wise. Two things that happened in 2012 we had two AOLers that had distressed babies that were born that we paid a million dollars each to make sure those babies were okay in general. And those are the things that add up into our benefits cost.”

Some internal and external reaction was not positive over the juxtaposition.

So, Armstrong responded. “The spirit of the town hall and the spirit of how we choose benefits are the same — we want to be open and transparent about the choices we make and why we are making them.”

Interestingly, while some allege that AOL slipped in the 401(k) changes only recently, there was a slide sent to employees in a larger benefits information packet in October that does outline them, as you can see here (here is a more detailed version):

By the way, the Washington Post first called attention to the changes last week.

More to come, I am guessing, but here you go:

From: “Armstrong, Tim”

Subject: AOL Town Hall Follow-Up

AOLers –

As we discussed at the town hall, we care about you and the company — a lot. This morning, I discussed the increases we and many other companies are seeing in healthcare costs. In that context, I mentioned high-risk pregnancy as just one of many examples of how our company supports families when they are in need. We will continue supporting members of the AOL family.

We provide a wide range of benefits — including our 401k plan — and conduct open information sessions each Fall on all available benefits as well as any changes being made. We will continue to do that.

The spirit of the town hall and the spirit of how we choose benefits are the same — we want to be open and transparent about the choices we make and why we are making them.

As I have said over and over again, our employees are our greatest asset. Let’s move forward together as a team.

– TA


Hmmm.is AOL self-insured? And if so, don't they reinsure for catastrophic coverage? And if they use a traditional health insurer model, it is quite unlikely that they had to absorb million dollar sick baby bills. Insurance companies contract with hospitals and other providers so that NO ONE ever pays thos ridiculous fees that they would like us to believe actually represent real costs. Any AOL employee out there? Who is your AOL helth insurance provider?


I am assuming there is some sort of value that Mr. Armstrong adds to the actual running of the business, apart from his communications with employees.  If so, can someone please, please, please, have him focus on those activities and STFU when it comes to messages from on high?

Thank you.


Dear Mr. Armstrong:

We, the employees of AOL, would like you to please reorganize the company as a cooperative so that we, the employees, all become owners.  Then we will feel truly inspired to move together as a team.

Yours truly,

The AOL Workers Freedom Alliance

Ken Esq
Ken Esq

Those horrible sick babies! What next cancer patients? Stuff like this is just great when you're trying to recruit great people.


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