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It should more properly be called the "massive transfer of cash from the middle class to the american hospital association , American Health Insurance Plans and Pharmaceutical Research and Manufacturers of America act and ."
It could backfire on them, unless of course all of the other big companies decide to follow suit. Then what?
Many have already cut them, but not because of Obamacare, but because of the economic slowdown. Ours was cut in 2009. Yes, it will backfire, because the best talent will go to companies with better benefits.
in 2011 IBM, which is knows for good benefits paid nearly $900 million in 401K matching and they changed their approach to a lump-sum payments. Are they going to say that they will eliminate it because health insurance cost went up $7 million? That would actually save them hundreds of millions, but would it be an honest excuse? I don't think so.
Last edited by Finn_Jarber; 02-08-2014 at 01:37 PM..
They aren't the first to do this.
IBM did this last year.
Lump sum contribution to your 401K on 12/31.
Company gets to keep and use that money all year.
If you quit or get fired during the year..so sad, too bad.
7% of companies now do this. You are seeing a new shift.
Excuse? So you know how much their healthcare costs went up as a result of Obamacare? Who is making excuses now?
It looks like it went up about $140, which is nothing out of the ordinary because the cost has been rising every year (doubling every 7 years). Typically companied either eat the cost, or reduce coverage. Either way any company who cuts 401K benefits, will usually pay the price later. AOL income has dropped about 90%, so I think we know the real reason for their expense cuts.
It's good to have an excuse to cut employee benefits. We had our 401K cut to zero years ago, and they had to make up excuses. Such moves do nothing but reduce the company's ability to attract a better class of employees.
The "excuse" is the $7 million in new costs the that ACA is costing AOL.
It looks like it went up about $140, which is nothing out of the ordinary because the cost has been rising every year (doubling every 7 years). Typically companied either eat the cost, or reduce coverage. Either way any company who cuts 401K benefits, will usually pay the price later. AOL income has dropped about 90%, so I think we know the real reason for their expense cuts.
Quote:
Originally Posted by Wapasha
The "excuse" is the $7 million in new costs the that ACA is costing AOL.
It can be both -- a company with a healthy bottom line can/may absorb the additional marginal cost. A company which already is struggling can't/won't. The increased costs are a real thing. Whether or not they will be passed on to employees will vary company by company.
It can be both -- a company with a healthy bottom line can/may absorb the additional marginal cost. A company which already is struggling can't/won't. The increased costs are a real thing. Whether or not they will be passed on to employees will vary company by company.
They are struggling mightily, so I am not surprised about their cuts.
They are struggling mightily, so I am not surprised about their cuts.
Quote:
Originally Posted by BigJon3475
Please point out in AOL's 2013 10-k where they are struggling. You can find that on the corporate AOL website.
You know, I sort of had this idea in my head of AOL as a failed/failing company, but taking a look at their current quarterly EBITDA unless they have some huge debt load I'm unaware of they could have easily taken the hit from the ACA insurance taxes and other higher premium drivers without passing it on if they wanted to, unless it was substantially more than the $7 million being talked about here.
Oh well, say stuff without looking at the data and you have to eat your words sometimes.
You know, I sort of had this idea in my head of AOL as a failed/failing company, but taking a look at their current quarterly EBITDA unless they have some huge debt load I'm unaware of they could have easily taken the hit from the ACA insurance taxes and other higher premium drivers without passing it on if they wanted to, unless it was substantially more than the $7 million being talked about here.
Oh well, say stuff without looking at the data and you have to eat your words sometimes.
Quote:
Originally Posted by ALackOfCreativity
It can be both -- a company with a healthy bottom line can/may absorb the additional marginal cost. A company which already is struggling can't/won't. The increased costs are a real thing. Whether or not they will be passed on to employees will vary company by company.
I would not disagree in principle, but specific issues can be a factor.
There's a world of difference between publicly traded corporations and private corporations, LLCs, LLPs, GPs and such.
You're right in that LLCs, LLPs and private corporations can/may absorb the cost, but publicly traded corporations cannot do that. Publicly traded corporations must show a profit, and if they don't, then their stock price drops and they are prey to predators looking for a take-over.
That's why corporations are holding cash....cash is they only possible means to defend themselves...there is no other.
Remember Durant? General Motors fires Durant, so Durant teams up with Louis Chevrolet and they start making Chevrolet cars. The Chevrolet gains Market Share very rapidly, eating the Market Share of General Motors. Durant takes his profits and starts buying General Motors stocks, and the next thing you know...
....Durant owns 51% of GM stocks and has controlling interest. Durant calls a shareholder meeting --- his right as majority shareholder; nominates himself as the CEO of General Motors --- his right as majority shareholder; and then casts 51% of the votes for himself -- his right as majority shareholder.
So not only does Durant own General Motors, he is also the CEO.
That's how Life's Good bought up Zenith. Zenith couldn't compete globally, profits dropped, stock prices dropped and there's Life's Good selling globally making beau coup profits and buying up Zenith stock.
Doesn't Time-Warner own AOL?
Didn't Time just lay-off employees?
Maybe AOL is doing fine, but perhaps Time-Warner is struggling.
Somebody's got to stay profitable...
Mircea
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