• Mon, Feb 10 - 8:31 am ET

Mother Of AOL’s ‘Distressed Baby’ Calls Out CEO On His Ignorance

bethany

By now, you’ve probably heard the name Tim Armstrong—a.k.a. the CEO of AOL that found himself in hot water after making an unfortunate comment in a town hall meeting with his employees. Armstrong planned to cut employee retirement benefits related to the burden of two AOL employees with “distressed babies.”

“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.”

If I was the mother of one of those “distressed babies,” his explanation would hardly sit well with me. The mother of one of the distressed babies spoke out to share her birth story in this recent Slate piece.

Horrifying doesn’t even begin to describe it. I was fortunate enough to have a positive birthing experience, and whenever I read stories like this, my jaw drops at what it must have been like to go through a living nightmare at the moment when you were supposed welcome your baby into the world. If you share such a story, my heart goes out to you.

This wife of an AOL employee gave birth to her daughter prematurely and without warning at 1 pound, 9 ounces. She was told her preemie baby had a one-third chance of dying, as well as a one-third chance of severe disability. Her daughter spent three months in the NICU and was described as a “feisty” baby that beat the odds.

In order to save her life in preterm labor, which many article commenters insensitively called a “miscarriage,” she became a million-dollar baby, referring to her medical expenses. This whole story was difficult to read because a close friend of mine had a similar experience in repeat surgeries needed for her young son that racked up hospital bills upon hospital bills.

The mother of this distressed baby shared her side of the story and called out CEO Armstrong for his judgment and hypocrisy. Not only did Armstrong cut employee benefits on the day he revealed the “best quarterly earnings in years,” but he also judged a family in a very dire situation.

No woman wants to have a premature baby. No family wants to put their baby in the NICU for months. I truly appreciate this mom sharing her story and speaking up, but I sincerely hope that she didn’t read the comments on her original article. Not all of the readers were sensitive to her plight, and a few even went so far as to imply that she would have been better off miscarrying to save money. That’s just sick.

(photo: Getty Images)

You can reach this post's author, Bethany Ramos, on twitter.
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  • Andrew Cole

    I think the real problem is that a thousand factors go into making decisions at a company that large, and singling out the health care costs of two employees as “the” causal factor is not only nonsensical, but also disgusting. Basically he is saying “we regret having to pay that money and wish we couldn’t have, so now we are going to set an example.”

    Fuck AOL. I would get rid of my netscape email if it wasn’t so integrated into my life after nearly twenty years.

    • arrow2010

      It was 2 million dollars on 2 employees. Corporations have to identify the ‘long-pole’ costs and do something about it to satisfy the board.

      Talk of money and premature babies may sicken you, but the world goes on.

    • Andrew Cole

      You are missing the point. This is classic manipulative behavior. They are using these two employees to justify cutting benefits to the rest of them. An obligation was made to pay, and they did. The amount is irrelevant. These things are rare, and if they didn’t do a risk assessment, then they should have. A lot of people make a good living trying to figure out how much these things are going to cost on average.

      Taking a couple outliers and using them to justify larger policies is just wrong.

  • robbie

    I work in a hospital and see medications and procedures needlessly done on people. We need to cut back to basics in healthcare SO the system can support real needs like these babies!

    • Bethany Ramos

      Great point!

    • Tinyfaeri

      We also need to get everyone insured so hospitals aren’t charging insurance companies $50 for a chux pad to cover the uninsured ER visits. I exaggerate, but only slightly.

    • That_Darn_Kat

      It’s not much of an exaggeration…when I was in labor with my son (before the major pain starting and I was only experiencing minor contractions), I had a headache, and asked for a Tylenol. By the time they brought it, I was in the midst of labor and couldn’t even remember I had a headache. I was told they had already charged me for the medicine, so I might as well take it. The one Tylenol cost me about $80. One, single tablet, same thing I had sitting on my nightstand at home. Fricking ridiculous.

    • Bethany Ramos

      UNREAL.

    • arrow2010

      Lesson learned – bring your own Tylenol.

    • Ginny

      My grandma was in the hospital a few months ago with respiratory issues. She was given a nasal spray to help clear her up. She recovered, went home and got her bill a few weeks later. She had a charge she couldn’t figure out so she called the hospital administrator. Turned out it was a $300 charge for the nasal spray. A nasal spray she took one puff of, I might add.

    • brebay

      The thing is, they only seem unnecessary when they fail to diagnose anything. The person whose early-stage malignany tumor was found because a doctor ordered comprehensively probably doesn’t think it was so unnecessary.

    • arrow2010

      Please define these “needless” procedures. What is needless to you might be important to the patient.

  • http://www.twitter.com/ohladyjayne allisonjayne
    • Bethany Ramos

      Wow, thank you!

  • keelhaulrose

    If your previously giant company is to the point where the medical expenses of two employees is having such an impact I’m expecting your bankruptcy and/or downsizing announcement any moment.
    We all know AOL is a dead fish and wouldn’t be around without Time Warner, who isn’t exactly doing well themselves.

    • elle

      Actually you would think AOL is a dead fish but it owns so many patents that if they sold them (or even enforced them) they could keep going for a long time. Just a few years ago they sold 800 of their patents for 1.1 billion. They still own a ton more. Sorry, I’m just a business/ finance person so I just kinda know stuff lime this. Actually I have a friend who works at AOL and while Tim Armstrong is a terrible person (but so are most CEOs) he really is turning it around. But that can’t excuse what he did/said about cutting benefits and I am left wondering if HIPPA was violated anyway and if he’s such a micromanager that he goes through all insurance stuff personally. It just seems odd for the CEO to be aware of that…I guess he had a conference with the CFO?

    • keelhaulrose

      If they had enough capital I don’t think they’d restructure retirement because of two sick babies. That sounds like he’s fishing for an excuse.
      I get that two million in medical expenses would hit a small company hard (btw, what insurance company are they working with that they’re still eating that two million?), but a large company shouldn’t need such a dramatic change because of such a sudden, uncommon occurrence.

    • elle

      Nah it’s not about not having enough cash on hand it’s about paring employee benefits to maximize shareholder value, highlighting people or putting on a hiring freeze. If he was honest about that maybe people would understand. Instead he threw 2 babies under the bus. I thought the entire world was in agreement that babies get a pass for everything. Also my guess is AOL is self insured. They hire a company like Aetna, Blue Cross, or Humana to process their claims but once an employee reaches their max for a year AOL has to pay the rest. It’s a gamble because it can be cheaper that way but if something catastrophic happens AOL will have to pay a lot.

    • elle

      Instead of firing people. Highlighting people? Gotta love autocorrect.

    • arrow2010

      No doubt the CEO was dumb to give specific reasons for the cut in benefits. He should have just given the standard boilerplate CEO-talk.

  • LadyClodia

    It’s just so awful that Armstrong singled out these parents to make a point. It makes me sick, and I feel so bad for them. And I did read the article yesterday on Slate, and there weren’t many comments up yet, but some of them were just so awful.
    My nephew was born an ultra preemie, and I saw how hard it was on his parents and the rest of the family. We don’t live closeby but I worried about him everyday, and alternately awaited and dreaded news. He will be celebrating his 2nd birthday this weekend, and he’s healthy and doing well now.
    The mother was very brave to speak out about this especially since she said it was so hard for her and her husband to talk about it with anyone.

  • darras

    I really hate that health care in the states costs the way that it does.. It seems.. unethical to me. Health care is such a basic right! And one I am very used to having free being European. Well ‘free’ of course, a small percentage of my very reasonable tax goes towards ensuring that everyone can have medical treatment without paying an arm and a leg (unless they choose to go private). It makes me sick that people with such ill babies or relatives can get into such horrifying debt due to unfortunate circumstance that nobody has any control over. :(

  • gothicgaelicgirl

    What if it was HIS child?
    Bet he’d happily pay over a million!
    Selfish prick!

  • Robotic Arms Dealer

    Beth, I assume you and other staff writers are compensated by Defy Media and/or Gloss Network, etc. etc.

    I dunno if your medical is included in your compensation package, but imagine if you or another writer had similar unfortunate medical experience and Defy or Gloss had to pay $1M or whatever amount to cover it. That’s serious money that cuts into their profit.

    AOL’s CEO made his comments in an employee meeting where he had to explain why he was cutting their benefit. While it sounds insensitive, his duties are to the health of the corporation and sometimes tough things must be said.

    It’s the unfortunate realities of business.

    • Bethany Ramos

      Thank you for your POV. In my personal situation, I would be SCREWED as my husband and I are basically self-employed with terrible insurance, as of now. :/

    • Roberta

      It may be an unfortunate reality, but singling out 2 premature babies as the reason benefits are cut is pretty shitty. There were other sensitive ways of saying unforeseen expenses or something like that when an explanation is required.

    • Robotic Arms Dealer

      Yea, I’m not gonna defend his lack of tact. I certainly would have handled it in a far more sensitive manner and not use any labels.

      But at the same time, I would defend his ultimate position. I mean, if AOL folds, guess what, NONE of AOL’s employees have any health benefits… or a job with AOL.

    • JLH1986

      As the mother of the child pointed out…how many employees and their covered members had cancer, or asthma etc. I sincerely doubt 2 women broke AOL. And since he has since reinstated it (presumably because he realized his $12 million a year salary and discussing having a “best quarterly earnings in years” is a tiny bit…dickish) and apologized. If he was truly worried about the financial health of the company I doubt he would have reinstated the 401k plan.

    • Larkin

      I’m just lost as to how it cost AOL millions of dollars. I have insurance through my employer, and if I had a medical emergency that cost millions, it would be the insurance company (not my employer) that had to pay for it. And anything that the insurance didn’t cover, I would have to pay. My employer would never have to pay anything more than their share of the premium.

  • C.J.

    I live in Canada so our healthcare benefits through our workplaces are more for prescriptions, dental, and other services not done in the hospital. Hospital care is paid for by the province. When I was still working my employer had to change some things on our benefit plan due to increased costs. They didn’t tell us the nature of the increased costs because that would violate the confidentiality of the people who had to use the benefits more. I understand that the more you use benefits the more they cost and sometimes companies have to re-evaluate their benefit plans but there are better ways of handling it without singling people out.

    • AP

      I had an employer that changed plans due to big expenses in the previous year…but they just said, “We had a lot of expenses in the previous year, and we had to find a new provider who was more affordable,” and didn’t give any details. It protected the confidentiality of the employees and their families.

  • Rachel Sea

    Singling them out wasn’t just cruel, it was utter nonsense. AOL is not an insurance agency. They may pay for an employee’s premium, but the insurance company, and the employee pay the rest. AOL didn’t spend an extra dime on any “distressed babies.”

    • val97

      AOL probably has a self insured plan. Many large companies do not actually pay premiums. They pay an administrative fee to an insurance company who processes the claims and bills the company.
      the company then pays all of the claims, as though they were the insurance company, while the employee pays a monthly premium, which is actually just an estimate.

  • Andy

    Wow…as a mom with two NICU graduates (what can I say? I can’t seem to keep them cooking past 37 weeks), this guy needs to pull his foot out of his mouth and his head out of his ass. No parent wants to go through the NICU experience, but it’s deplorable to imply that having a baby with medical need immediately after birth is enough to wreck a company.

    • arrow2010

      Well if AOL is that hard up that 2 premie babies broke them, they are not going to be in business much longer.

  • Ptownsteveschick

    I just really don’t understand how it is legal for him to disclose anyone’s health situation, even if he used a vague term like “distressed baby” It reminds me of that episode of The Office. “Write down what medical condition you have if you want it covered.”

    • arrow2010

      Because he’s an asshole?

    • Ptownsteveschick

      That must be it.

  • val97

    I worked in benefits for many years. It is absolutely true that each year, there are about 5-10 claims (for a mid sized company) that are extraordinarily expensive and drive up the costs for everyone, mostly the employer. It’s terrible that the CEO basically called these people out (I’m sure any one who knew the mothers could figure out who he was talking about, making this a HIPAA violation in essence), but it also doesn’t tell the whole story of why healthcare costs are so expensive. Also, one year it could be premature triplets for over $1mill in claims (as was the case in my last company), or it could be open heart surgery with complications.

  • brebay

    Wait, YOU paid a million dollars? I think you’re missing the point of insurance…

    • brebay

      Okay, okay, I didn’t read all the comments, apparently AOL is self-insured. I didn’t even know AOL still existed though, so this whole thing was news to me.

  • arrow2010

    The real question is what obligations do corporations have to fund their employees’ health care? Maybe this is why we need universe health care like in England.

  • robbie

    Needless would be a colonoscopy done on a 95 year old patient or breathing treatments and respiratory treatments done on someone in for a broken ankle. It costs lots of money.

  • Jenna

    My 6 year old was a $2 million baby and I definitely never heard about it negatively from either my employer or my husbands.