The casualties from Obamacare's implementation keep on growing -- and have now reduced AOL employees retirement benefits according to Tim Armstrong, the company's CEO, reports Huffington Post. AOL is the parent-company of the Obamacare-pushing Huffington Post.
Thursday morning, Armstrong told CNBC, "Obamacare is an additional $7.1 million expense for us as a company, so we have to decide whether or not to pass that expense to employees or whether to cut other benefits."
In a town hall with employees, Armstrong said Obamacare and other extraneous medical costs are responsible for having to reduce benefits. "[In 2012] 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," he said.
Like most companies of its magnitude, AOL is most likely self-insured, meaning they cover medical costs and contract health care providers for their employees. According to company filings, AOL employed a total of 5,600 employees in 2012.
The new policy certainly has not been met without criticism, an editor for The Guardian, Heidi N. Moore, tweeted 45,000 followers "AOL CEO Tim Armstrong, who makes $12m a year, takes away retirement money from employees for cost of sick babies."
AOL employees have also responded unfavorably to the change in a letter published on the tech website Recode. "We strongly object to the new 401(k) matching practice and encourage the company to reverse its policy," reads the letter. "We also object to the manner in which this practice was disclosed to employees."
Armstrong has since responded to employees with an email of his own:
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