Aol Gives Us Our Full 401K Matching Back, Calls “Babies” Comment A Mistake

Aol has backtracked on a controversial decision to delay employee 401K matching until the end of the year, a decision that could potentially cost employees like myself thousands of dollars. Thank you.

Aol announced the change by sending out a company-wide memo earlier today. Note: Somehow TechCrunch only gets a hold of the positive memos.

AOLers –

We began our journey together in 2009, and for the last four years have had an employee-first culture. As I have said before, the ability to change is a strategic advantage for us. With benefit costs increasing, we made a strategic, financial decision last year to revise our employee matching 401K program from a per-pay-period contribution to a yearly lump-sum contribution. We then communicated this decision in the fall through multiple channels to every AOL office in the US.

The leadership team and I listened to your feedback over the last week. We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution. The Human Resource team will be in contact with all employees over the next week to explain the change and to answer any other benefits related questions you might have. We are proud to provide AOLers with a robust benefits offering that spans from exceptional healthcare coverage to 401K’s to AOL fitness programs and beyond. On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs.

Thursday we announced an outstanding Q4 and end to our fiscal year. More importantly, it validated our strategy and the work we have done on it. AOL is positioned for future growth and our long-term strategy to be one of the world’s leading media technology companies.

Now, as we begin 2014, let’s keep up our momentum. Thank you for the great 2013 year and for your ongoing passion. And know that I am a passionate advocate for the AOL family

– TA

In the note, Aol CEO Tim Armstrong apologizes for cryptic comments this week, first blaming the decision on “distressed babies” and then Obamacare.

While, as Aol employees, we’re psyched and grateful to have our 3% per pay period matching back there are still a couple of questions left to be answered.

1) What is a “distressed baby”?

2) Why would Aol have to pay $2 million out-of-pocket for two individual’s specific medical conditions? It’s likely that, like many large companies, Aol is self-insured, but usually self-insured companies buy stop-loss insurance for outsize costs like a premature or otherwise “distressed” child.

3) If Armstrong was referring publicly to corporate premiums or one-off costs going up by $2 million due to two specific employees, then isn’t that a possible HIPAA violation?

As far as I can tell, insurance companies can’t disclose to CEOs what medical conditions employees have without employee authorization, unless it’s to “facilitate treatment, payment, or health care operations.” In those cases insurance companies are not supposed to disclose more info than they’re supposed to.

Even if it’s not against HIPAA, it’s still pretty strange that Armstrong would say that on a call. Now all of Aol is worried about who this is and whether they are okay.

UDPATE: Deanna Fei has identified herself as the mother of one of the “distressed babies” Armstrong was talking about. You can read more about her experience here.

4) I don’t understand the rationale for cutting the 401K program to recover costs in the first place, why not take the money out of Armstrong’s $12 million a year salary? Or my own? Or Shingy’s?

I have asked Aol all these questions, and have received a “No comment.” If anyone else has an answer, please email me or leave it in the comments.

Image via Gawker/ Jim Cooke.