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• Seattle Times: Code Red on health savings accounts. By Froma Harrop, Providence Journal. Excerpts: Heads up, Americans. The Bush administration is now greasing the skids for employers to drop your health coverage. This is a biggie. Radical change was not the headline when the president unfurled his latest proposals for health savings accounts. It was presented mainly as a sensible-sounding way for people without medical insurance to buy it with pre-tax dollars, the same way companies do.
  George Bush's new HSA is actually a rocket-powered tax shelter dressed up as a sweet little program to help the uninsured. It would also undermine the traditional health coverage now offered by employers. (More on that in a minute.) And in case anyone still cares about deficits, it would cost the Treasury $156 billion in lost tax revenues over 10 years — more than wiping out any savings Bush hopes to achieve with his cuts in projected Medicare spending. [...]
  Demonically, the Bush proposal gives employers new reasons not to offer traditional health coverage, or any medical benefits at all. Indeed, the new health savings accounts could do to the traditional health plan what the 401(k) plan did to the traditional pension: Kill it off. Like 401(k)s, the proposed HSAs could save money for employers while transferring the cost and risk of providing what was once an expected benefit onto the workers. The move from traditional pensions to 401(k) plans has already amounted to a major hidden pay cut for millions of American workers. [...]
  Health savings accounts would be most attractive to the healthy and wealthy, drawing this group out of traditional coverage. That would leave the sick and poor in the higher-cost insurance plans, which would then sink.
  So the Bush proposal would actually cause more Americans to lose coverage than to gain it. In 2004, MIT economist Jonathan Gruber computed the numbers on the basis of a health-savings-account proposal that was far more modest than Bush's. He figured that adding a tax deduction for buying high-deductible health insurance to the tax-advantaged HSA would result in 1.1 million currently uninsured people obtaining coverage. These would be mostly the richer folks who are uninsured for some reason and who make enough money to fully enjoy the tax breaks. But the changes would lead to 1.4 million people losing their employer coverage. Guess who they would be.
• Washington Post: Ownership Society Redux. New Name, Same Policy. By Sebastian Mallaby. Excerpts: Health savings accounts are ostensibly supposed to fix the health system. Right now, tax rules subsidize company-provided health insurance, but they're less generous toward out-of-pocket medical payments; as a result, company health plans pay most bills and patients have no incentive to shop around for the best bargain. Health savings accounts end this tax bias. Anyone who buys an insurance policy with a deductible of $1,050 or more can open an account and save $5,250 a year toward out-of-pocket health costs, tax-free. This will shift control of medical spending into the hands of consumers, who will discipline overpriced hospitals and clinics.
  Or so goes the theory. In practice, probably less than half of all health spending outside Medicaid and Medicare would be affected by the new consumer-driven discipline. Many hospital stays cost more than any deductible, so consumers would have no incentive to bargain; emergency-room patients aren't in a fit state to negotiate prices with their doctors. But consider an even more basic question: Is the ostensible reason for health savings accounts the real one?
  f the administration's goal were merely to remove the tax bias against out-of-pocket health payments, it could simply make these tax-deductible. No need for health savings accounts to accomplish that -- just tell people to count out-of-pocket payments against taxable income. [...]
  In sum, health savings accounts are not just about ending the tax bias in favor of traditional company health plans. The administration is proposing a new kind of 401(k), and using it as an inducement to quit low-deductible insurance. Rich people, who gain most from the tax breaks on saving, will be first to sign on; healthy people, who subsidize sicker people in company health plans, will be right behind them. Their exit may force traditional health plans into a death spiral. The loss of the subsidy from healthy workers will drive premiums up, which will drive more healthy people into health savings accounts, which will drive premiums up further. [...]
  A rerun of last year's debate would show that health savings accounts are harder to defend than personal retirement ones. They are shockingly regressive: Furman's study shows how a poor family might get a subsidy of $150 while a rich one might get more than $4,000. They have not just a transition cost but a real cost: The tax breaks could widen the deficit by at least $132 billion over 10 years and a lot more after that. And health savings accounts pose a more formidable threat to traditional corporate health plans than personal accounts posed to Social Security. Market forces are already dislodging company health plans; an extra shove could cause an avalanche.
• Workforce Management: Proposed Tax Break May Spur Companies to Discontinue Benefits. President Bush’s proposal to give individuals tax breaks for the purchase of high-deductible health plans through HSAs could prompt younger, healthier employees to drop their employer-sponsored coverage, some experts say. Excerpts: If you went to the kitchen during the State of the Union address, you may have missed President Bush’s proposals to reform health savings accounts. They only took up two lines of a 70-paragraph speech. In this case, brevity may be the soul of profound policy changes that affect whether and how employers offer health benefits. Bush wants to give individuals tax breaks for the purchase of high-deductible health insurance plans, which provide catastrophic coverage that can be augmented with health savings accounts. [...]
  Democrats, who assert that HSAs do nothing to help low-income people obtain health insurance, will resist. “What we’ve got is devolution of our health care system, where everyone is out there on their own,” says a House Democratic health policy staffer who cannot speak for attribution. “If the president gets what he wants, health care will be like pensions.”
• Des Moines Register: Reforming health care — to benefit banks? Health Savings Accounts could provide windfall to financial institutions. Excerpts: But it’s hard to imagine how these accounts will do anything to control health-care costs when the vast majority of health spending is for chronic illness and end-of-life care — not elective trips to the clinic for a sore throat. And how can people shop for better health deals when information on prices and quality isn’t readily available? Where do you go for the best deal on a mole removal or an EKG? [...]
  It’s doubtful many people overuse health care anyway. Going to the doctor isn’t fun. Many of those without health insurance can’t afford drugs or visits to the clinic. Rising co-payments discourage even those with insurance from seeking care and medications. So if these accounts aren’t going to control costs of health care, why is the president pushing them? Sure, they’re in keeping with his beliefs in the benefits of ownership and personal responsibility. But are they really good for anyone?
  Well, yes.
  After a little digging, we think we’ve figured out who: those wealthy enough to pack away the bucks; insurance companies that now have a new product to sell; and financial institutions positioning themselves to manage these accounts. Especially the financial institutions.
  According to a report by DiamondCluster International, a management-consulting firm, Americans will have saved $75 billion in HSAs by 2010. The report estimates financial institutions can capture $3.5 billion in account and management fees over the next five years, and payment processors can capture $2.3 billion in transaction fees. Wow. Billions of health-care dollars landing in the pockets of financial institutions.
• Yahoo! message board post by Ed Hayden. Full excerpt: Mr. Bush says that he believes low wage earners have the sense to set aside money for health care. He may be correct for some of those folks but the majority are not financially savvy, don't have the discretionary income and frankly do not have long term views. They essentially live paycheck to paycheck and any discretionary income they may happen to have they are likely to spend on toys or a good time; which they deserve like everyone else. Let's face it; their lives don't generally have a lot of bright spots.
  I've got a better idea. Pay everyone a decent wage and provide health care to everyone. If we have to stop the presidents buddies from stuffing everything they can get their hands on into their pockets well, boo-hoo. What's so hard about realizing that overwhelming greed is not a good thing and that it causes major problems.
  This is so basically simple. All the president and his ilk are doing is trying to make something that smells bad and tastes bad and which will ultimately be the undoing of the social fabric of our society palatable.
• BenefitNews: Say HSAhhhhhhhhhhhhhhhh. By Richard D. Quinn. Excerpts: The Health Savings Account (HSA) has been elevated to a regular State of the Union feature, which may cause many people to conclude that the high-deductible health plan is the salvation for our health care cost problems. That’s a pity. Common sense must tell us that merely shifting costs to patients is not the answer, and that even if every person with an HSA was a prudent buyer, it would have little impact on overall health care costs. The bulk of costs are incurred well beyond deciding whether to seek an office visit, visit the emergency room or take a generic drug. Our problems are far more complex than that.
  I doubt that anyone knows what the appropriate price should be for health care. My wife had some foot surgery a few months back, she was in an outpatient facility for a total of four hours; the bill for use of the facility was $6,000. Is that reasonable? Is that what all users of that facility would pay?
• The Kaiser Family Foundation: Bush Economic Adviser Attributes Rising Health Care Costs to 'Perception' Care Is Free. Excerpt: Allan Hubbard, director of the National Economic Council, on Tuesday said that the largest factor behind increased health care costs is the public "perception that health care is free," CQ HealthBeat reports. At a breakfast with reporters, Hubbard said that U.S. residents overuse health care services because health insurance covers most of the cost. He added that a proposal by President Bush to expand health savings accounts, which seek to make individuals more responsible for their health care spending, would help reduce costs. Hubbard did not estimate the amount of the savings that would result from the proposal, which would cost $29 billion over five years, but said, "We'll know its working when growth starts to slow."
• Yahoo! message board post by "bugbert_99". Full excerpt: How long does an hsa last if you do not have medical insurance (hmo, Blue cross, company sponsored, etc.) and you end up in intensive care for a week, or two, or three. Intensive care easily will cost $10,000 a day. A three week stay is usually about $250,000. Hope your HSA has that much in it if you don't have that medical insurance. And getting private insurance is very iffy if you have any pre-existing condition. You could easily be without any insurance when that intensive care stay arrives at your doorstep. Quite a few people I know don't/can't save anything into a 401k as they are a median American family of 4 with that median $40,000 a year gross income. There is no extra money to stuff into a 401k or an HSA. People without any pension or income will not be having an HSA.

• "Stranger than fiction" by "Dose of reality". Full excerpt: The case interview here is really pretty straightforward. It concerns an aging technology industry icon, that has been poorly managed for more than a decade. It is characterized by an incredibly bureaucratic structure, a religious dedication to cost cutting, an overstaffed and unimaginative R&D organization, a strategy that was passe on the day it was created, and an HR department that has forgotten what the "H" stands for.
  Now, depending on which discipline you work in, the case solution has to include the following recommendations:
  • Finance: Cut salary of all of the front line resources, make the bonuses unattainable, and find $1 billion of accounting gimmicks every 6 months. Pensions, income taxes, and acquisition/disposition-related adjustments & stories will all get full credit. If you recommend increasing revenue through internal investments, you will undoubtedly fail. Extra credit if you recommend stock buybacks.
  • HR: Eliminate any differentiation in compensation and reward for above average performers, increase utilization targets to above 100%, cut medical contributions, and eliminate the pension plan. Extra credit if you can come up with a way to take some of the latter directly to the bottom line. This will show you to be an extension of the bean-counting groups - a terrific fit with our overall HR recruiting strategy.
  • Technology: outsource all of the service groups to countries where people can barely speak the language, have no functional understanding of business processes, and have a feigned humility that doesn't come close to covering up their true arrogance and self-importance. If you can include Websphere, Lotus, and DB2 in the solution, you are golden. Make sure you don't let on that you understand general business or any industry solutions - your recruiters are sure to feel threatened and you will be out on your @$$.
  • Functional: Only one key point here - I LOVE PACKAGE IMPLEMENTATIONS! Be willing to abandon everything you ever learned about your functional area, and only focus on configuring applications, building interfaces, creating reports, and doing data conversion. Show that you are a closet technologist, and you're in.
  Now as satirical as that may sound, it is all true, and it is a real company. That's the best input that any real "good samaritan" will offer you on this or any other uncontrolled IBM information source. Good Luck!
• "No It's Not" by "ancientblueconsultant". Full excerpt: I hear that internally in the kickoffs for 2006, the BCS folk are "being encouraged" to hug a brand guy. The Dennie Welsh idea of IGS being "vendor agnostic" is being thrown into the trash heap after 10 years and everyone is being encouraged to look internally before looking elsewhere for a solution. The Gross versus Net problem has come around and bitten the Blue Pig big time.
• "Upcoming tests of Dose's Theory" by "wonderaboutibm". Full excerpt: Behold everyone, Dose now exposes himself to the acid test -- confirmation of his theory!! And my scientific opinion is that he will pass with flying colors. To wit, "bonus season" is upon us soon. The "scorecard" numbers are out, and of course they are as meaningless as ever. Doubtless they will be twisted to reduce bonuses. I don't understand the bonus logic and I never will, but no matter: my guess is that they will be no better than last year. Further confirmation of Dose's Theory will come later in the year when the benefit cutbacks continue for 2007. You poor slobs that claim that Dose and I and some of the other posters are too negative: Read St. John -- "The truth shall set you free."

• Alliance@IBM: Attention IBM employees: IBM is blocking e-mail to and from the Alliance@IBM e-mail address endicottalliance@stny.rr.com from inside the company. Please send your job cut information and other correspondence from your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax 607 658 9283.
• To IBM Canada employees: Concerned about pension changes, declining benefits and working conditions? Please contact the e-mail below to find out how to get involved in working for a better future for IBM Canada employees. allianceibm@tngcanada.org
• PBC's and two "3"'s equal stealth job cuts. IBM employees are once again being forced out the door. If you are being forced out please contact the Alliance: endicottalliance@stny.rr.com from your home computer. Let us know your location, name, age and time of service. Information will be held in strict confidence. We will put you in contact with someone that can give you advice on challenging your force out.
• IBM Germany union flyer.
• From the Job Cuts Status & Comments page:
  • Comment 2/15/06: If any employee has questions about severance packages, please email me. The Alliance@IBM is still collecting data on the number of employees who get appraised with two 3's in a row. We can also discuss this. If you get a formal termination package, please appeal your selection to the Plan Administrator. There is no format for this process, so use the process defined under the Internal Appeals Program. I can also assist you with this process. If we stop fighting now, our cause will never be realized. IBM'ers banded together for the current and to establish a positive memory for those who have left IBM. Please consider becoming a dues paying member of the Alliance@IBM. It's only $120.00 per year, and may be completely tax deductible. I have around 46 days left of IBM employment, the best time to fight IBM is while we are in the walls that Thomas Watson built. -Steve Bergeron Alliance@IBM-
  • Comment 2/17/06: I found out that the manager who laid me off left IBM recently. I was an “older” employee. My separation agreement says I can’t sue IBM or its managers, but what about once a manger has left? I was in meetings where this manager discussed laying off one person who was part time because of disability and two others because of age. Does the union have a network to match ex-managers, employees that they have terminated illegally and others who could testify against a manager who fired someone illegally? Obviously none of the ex-employees would be union members, but helping others go after these managers would certainly put a chill in their desire to participate in such actions. -Anonymous- Alliance reply: Please send your contact information to endicottalliance@stny.rr.com
• From the General Visitor's Comment page:
  • Comments 02/12/06: I just retired from IBM at exactly 30 years. I was in sales and was so disappointed with the way management was running the business I left at the first opportunity. What I wanted to comment on was two fold: First--as a user of procurement services--last year I started having to deal with India--they were clueless. I always ended up getting bounced back to someone in the U.S. or Canada to get my questions answered. Not a good sign. Second, for those leaving IBM, make sure you maximize your earnings on your way out the door. How do you do this? 1. If you're leaving early in the year, take all your optional holidays--they won't pay for them like vacation, but you don't have to work those last 6 days. Also if you leave early in the year, roll last year's vacation (only you know how many days you actually took). So if you roll three weeks from last year, you'll get paid three weeks when you leave (unless current year earned vacation is greater).
    I see these comments wondering about IBM in 5 years, with all the older people bailing. It will be interesting. I watched my replacement for 3 weeks and she'll be lucky if she turns the same numbers I did. -Anonymous-
  • Comments 02/14/06: I recently quit my job after 5 years in ISV & Developer Relations to go work for one of IBM's largest competitors. I became increasingly unimpressed with IBM's top heavy management structure and complete disregard for employees well being. The unfortunate truth is that all of IBM's talent is leaving for one reason or another and looking for challenges elsewhere. IBM has moved away from innovation and its values of the past for a future of dull, hum-drum corporate existence where nothing matters but affording some clueless manager the next detail for their car. I once shared the idealistic views of others on this board but have come to realize that IBM is too big to change and that we Americans don't give a crap about anything until it hits our paycheck. The average IBMer is too comfortable to take any risks like joining a union. Do yourself a favor and jump ship while the economy is good, opportunities are out there for you. IBM would have you believe that IBM is THE ONLY place to work... Don't believe it. Job satisfaction and more $$$ is out there. Put your resume together and and start looking, you will be shocked at how quickly IBM's competition will call you. Good luck! -Anonymous-
  • Comments 02/17/06: I am a recovering IBM workaholic. I used to work hard, take many courses, get new certifications and walk the extra mile. The past few years I noticed that my efforts weren't appreciated anymore. My annual income is steadily declining and I am not getting any respect. After my best year so far I got a bad PBC rating for no good reason and decided to change my attitude. In order to be in synch with my declining compensation, I now make regular cuts to my contribution. Come 5 o'clock I get my coat and don't care what I was doing a minute ago. I developed a whole new strategy to look like I am working hard while doing rats ass and am developing valuable skills in some computer games. My inspiration comes from Wally in the Dilbert cartoons. Surprisingly enough, last year I got a great PBC rating again. I am finally convinced that at IBM the more you work the less they you are worth. Next year I'll push for my best PBC rating ever by not showing up at work at regular intervals, to see how far I get. Don't be surprised if I make it to management. Finally I am getting a hang of this success thing. -Anonymous-
• Pension Comments page
  • Comments 02/15/06: Just a little piece of history...from PressConnects.com on June 8, 2003:
    In July 1994, IBM's director of total compensation advised Gerstner that a new pension plan -- what employees were told later that year was a new pension credit formula -- might produce $117 million in savings the first year and $2 billion over 10 years. A further reduction in the company's retirement expenses occurred in July 1999 when a cash balance pension plan was created. Employees younger than 40 with less than 10 years of service were automatically put into this plan The estimated savings from the second round of changes turned out to be larger than those the earlier round had garnered. In February 2000, seven months after the conversion, future savings were calculated at $140 million in 2000 and $3 billion over 10 years.
    The 1994 memo to Gerstner, who had joined the company in April 1993, pointed out that Big Blue had no separate retirement plan for executives. Company expenses for retirement benefits could be cut even if the employee match for the 401(k) plan were increased from 1.5 percent to 3 percent of pay and the executives' retirement package were boosted with two new plans. IBM executives earning more than $150,000 annually would be able to put up to 12 percent of their annual pay into a so-called "top hat" plan, a type of 401(k) not available to other employees that would provide a 3 percent company match.
    And a supplemental executive retirement plan was designed to "meet the income replacement objectives" of executives because of their worry about cuts in their pensions. A 1999 company document made public in the lawsuit shows that 1,186 top executives were eligible for participation in the supplemental executive retirement plan (SERP). Court documents reviewed by Gannett News Service didn't indicate how many executives were eligible for the top hat plan. The employee 401(k) was improved in 1995. Full article at http://www.pressconnects.com/special/ibmpensions/stories/story6097.shtml