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Highlights—August 24, 2013

  • Yahoo! IBM Pension and Retirement Issues message board: "IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "harris_berman". Full excerpt: In the mail today:
    "As of January 1, 2014, IBM will offer Medicare-eligible retirees and their Medicare-eligible dependents a new approach to health coverage. IBM's current medical and prescription drug coverage (dental and vision coverage as well) will end after December 31, 2013."

    "Nearly all of IBM's Medicare-eligible retirees and dependents will be able to obtain quality medical and prescription drug benefits through the Extend Health Medicare Exchange that at equal to or better than what they have today, at the same or lower cost."

    Premiums will no longer be deducted from your pension check. A new Health Reimbursement Arrangement will be used for those eligible to receive a premium subsidy from IBM. This contribution will be forfeit if not fully used and then a new funding will be made on Jan 1 of the next year. FHA Retirees will have their FHA balance transferred to the HRA on 12/31/13.

    Let the games begin....

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "chz_whiz". Full excerpt: The Aetna Integration Plan A covers essentially everything after Medicare and is only $6 / month (self only) after IBM's $3,000 annual contribution. So the $6 will be less with an Extend Medicare Health Exchange, whatever that is? Color me skeptical. Color me very skeptical.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by Kathi Cooper. Full excerpt: Here is the Towers Watson Extend Health article with a short URL, easier to access. http://tinyurl.com/m2vj6wo
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "harris_berman". Full excerpt: The Aetna Integration Plan A does not include Part D drug coverage. The exchanges will offer Part D options as well as plans for Dental and Vision (such as VSP, etc.). The only requirement for reimbursement is that you are signed up through Extend Health. Otherwise IBM will not fund the premiums, copays, or deductible.

    "You can use your HRA to reimburse yourself and your eligible dependents (as long as they also elect coverage through Extend Health) for the following expenses in a given year:

    • Premiums for individual Medicare supplemental insurance, such as Medicare Advantage, Medigap, and prescription drug plans that you enroll in through Extend Health
    • Unreimbursed premiums for Medicare Part B
    • Premiums for dental and vision plans
    • Out-of-pocket expenses, including deductibles, coinsurance and co-pays for medical, prescription drug, dental and vision plans."

    Assuming that the current stated IBM contributions are $3500/$3000 depending on when you retired under the Prior Plan, there could be substantial savings if you currently don't have significant medical expenses. For example, the cost of a Medicare Supplement High-deductible "F" plan is $50.25/month through BCBSNC, Part D is $83.90 (with no donut-hole), and Medicare Part B is $104. Total monthly premiums would be $238.15 or $2857.80/year. This doesn't include drug co-pays, dental plans (not a good investment for most) and vision plans (VSP).

    The Medigap premium is age dependent and has a $2110 deductible. A no deductible Plan "F" is $131.75/month at age 65 gradually increasing to $207 at age 75+

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "harris_berman". Full excerpt: The mailing consists of:
    1. Dear IBM Retiree or Benefit Recipient
    2. Announcement Letter
    3. Meet Extend Health by Attending a Briefing.

    Here's the IBM video posted on YouTube: http://www.youtube.com/watch?v=Zx73QGVT52k

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "trex_ibmer". Full excerpt: Can't wait to go to my next IBM Quarter Century Club gathering (we have to pay for our own coffee now, if and when, there is another meeting) and discuss this exciting, new, innovative change to retiree healthcare from IBM. I'm sure it is "cost neutral" and is not designed to save IBM any money in administration. If I see Socks there I'll give him a nice hug :)

    Bet Towers Watson helped IBM out on this change too, just like what happened with the cash balance pension.

    LIFE IS (definitely now) NOT GOOD to be or have worked for IBM.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "fhawontcutit". Full excerpt: It will be interesting to see if IBM declares FAS106 income as a result of this change.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "fhawontcutit". Full excerpt: As I mentioned in http://finance.groups.yahoo.com/group/ibmpension/message/75194 ERIC (not our friends) outlined a structure for this back in 2007.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "danhicksbyron". Full excerpt: I guess as I parse this it's not clear that it's scr*wing over retirees, just getting IBM out of the direct medical insurance business. Of course (as others have said) the devil's in the details. My wife and I are both "uninsurable" by current standards, and I pay about $2000/month for our low-deductible insurance. The question is how much we'll have to pay through the exchanges, and how much IBM's contribution will amount to.

    Also quite unclear (even under the old plan) is how my (younger, non-IBM-retiree) wife will be insured when I'm cut over to this plan.

    I'd like to see some CLEAR explanations/discussions of all this (and not a lot of "the world is ending and it's all IBM's fault" stuff), so we all can sort it out in a timely manner. We can sit around and have a blame fest later.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "harris_berman". Full excerpt: My understanding is for FHA Retirees: "Any amounts remaining on 12/31/14 will roll over. Your account balance will be indexed (similar to receiving interest credits)."
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "happily_retired_". Full excerpt: I wonder if IBM will have any surprises this year for retirees that are not yet Medicare eligible (except for the usual increasingly expensive choices providing less coverage)?
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "fhawontcutit". Full excerpt: > I guess as I parse this it's not clear that it's scr*wing over retirees, just getting IBM out of the direct medical insurance >business. Of course (as others have said) the devil's in the details.

    Serious question...not intended to be snarky...really...

    How many of the IBM's latest benefit changes have been advantageous for the employee/retiree?

    IMI, it's the precedent. Even if you get a subsidy from IBM initially, the whole thing is a switch to a DEFINED CONTRIBUTION medical plan. It seems to me that a company, once it switches to an HRA arrangement, can easily reduce or eliminate the HRA contribution for a given year, especially if the company is trying to meet earnings targets. Granted, IBM could have made changes for the old (defined benefit) medical plans, but I think this will be a lot easier to make changes...i.e., reductions.

    Just look at what happened recently to the active employees' defined contribution pension --401(k)-- match.

    It's the shift toward a DEFINED CONTRIBUTION approach.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "madinpok". Full excerpt: The retiree medical plan has essentially been a defined contribution plan since 1993 when IBM declared that it would cap the subsidies at $7500/$7000 per year for pre-Medicare retirees and $3500/$3000 for those on Medicare. What's changing is the visibility of that subsidy to the retirees and the way(s) it can be used.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "chz_whiz". Full excerpt: Why do think IBM would maintain a $3,000/$3,500 contribution? Their contribution is, and has been since announced, a maximum.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of 1/1/14" by "madinpok". Full excerpt: Since the insurance plans offered by Extend Health are all standard Medigap and Medicare Advantage plans, the normal rules for premium pricing and acceptance would apply.

    Here is a description of what is allowed:

    I don't think it makes a bit of difference whether the money to pay the premiums comes from an HRA or your own wallet. The insurance company doesn't know the source of the funds.

  • The Register: Amazon legal filing flames IBM's 'materially deficient' CIA cloud. Redacted document reveals seething hatred in spook cloud battle. By Jack Clark. Excerpts: There's a war going on for the future CPU cycles of the US Central Intelligence Agency, and behind closed doors and under fluorescent lights, representatives of IBM and Amazon are spitting blood at each other as they vie for the contract. ...

    Amazon had been awarded the contract by the CIA in February, but IBM protested within two weeks and argued to the GAO that the CIA had failed to fairly evaluate a couple of IBM's bid points, and had been loose with Amazon in post-selection negotiations, and that this meant there should be another bid. The GAO upheld two rather narrow points: that the CIA had failed to evaluate prices fairly between AWS and IBM in one scenario, and that the CIA had waived one component of the Software Security Commercial Clause for AWS in its post-bid meeting.

    The GAO "denied all other IBM protest challenges, including the Agency's assignment of a deficiency to IBM's proposal for IBM's inability to auto-scale and the assignment of its overall proposal as High Risk," the filing states. ...

    And in a statement so heavy with irony that we had to spend some of this afternoon quietly digesting it, Amazon states, "Even if the Court should find some corrective action warranted, it should not permit IBM the undeserved windfall opportunity to make its otherwise uncompetitive, materially deficient proposal competitive now that it has AWS's price and ratings in hand." ...

    In a statement sent to El Reg on Tuesday afternoon, IBM threw barbs at AWS, and echoed VMware's characterisation of the company as an inexperienced IT provider.

    "Amazon had a chance to air its point of view fully and fairly at the GAO," IBM wrote. "We are confident the court in this case will uphold the GAO's ruling and the agency's follow-on actions implementing it. Unlike Amazon, IBM has a long history of delivering successful transformational projects like this for the U.S. government. IBM has been delivering trusted and secure cloud services to business and government clients for many years and developed virtualization technologies, which have led to cloud computing."

  • InfoWorld: If IBM cloud-washed its earnings results, it's likely not alone. SEC is investigating claims that IBM misled investors with use of 'cloud' term, but its fuzzy nature, well, clouds the issue. By David Linthicum. Excerpts: I hate cloud-washing, the practice of repositioning traditional technology so that it's sold as cloud computing technology. In many cases, this is done by large companies that initially pushed back hard against cloud computing, to the point that they would not allow me to mention the "C word" when speaking at their conferences years back.

    These days, they've changed their minds. Now that cloud computing is all that and a bag of chips, cloud-washing your technology can increase the value of the company, not to mention your overall cool factor. Today, it's difficult to find a technology company without some sort of cloud focus.

    IBM was recently called on the carpet by the SEC for, in essence, cloud-washing in its 10-Q report, an investor document the feds scrutinize to make sure nothing misleading or false is said. The SEC has raised a question around accounting for what's cloud computing and what's not. Did IBM succumb to the temptation to spin some of its technology into the cloud category when perhaps it's not truly cloud?

    It's getting trickier for IBM. As reported by Doug Henschen at InformationWeek, "IBM's cloud computing revenues are smaller and less 'cloud-intensive' than customers and Wall Street analysts might think. That's the claim of a former IBM employee who backed up more than a few critical assessments of the vendor's cloud prowess with a number of confidential internal documents shared with InformationWeek."

  • IT News (Australia): Newman still considering legal action against IBM. By Paris Cowan. Excerpts: Queensland Premier Campbell Newman said he has not ruled out taking technology giant IBM to court over its role in the $1.2 billion Queensland Health payroll failure, against the advice of the state’s own investigation into the saga. ...

    Since the report was tabled, the Queensland Government has brought down a total ban on agencies procuring goods and services from IBM, until it is satisfied the company has made improvements to its governance and contracting practices and has taken action against a number of its own employees.

  • Yahoo! IBM Pension and Retirement Issues message board: "FHA percentage may be changed anytime" by "teamb562". Full excerpt: I learned something new today I did not know. Maybe this is common knowledge for FHA people, maybe not. I had thought you could only change the percentage withdrawn from your FHA notional account once a year during the Fall selection process for the following year. In fact, I was told by Fidelity today that the percentage can be changed anytime during the year. Sorry if this is a repeat for our readers.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA percentage may be changed anytime" by "hankharty" Full excerpt: That may be good news for those trying to approach a $0 balance in the FHA without actually getting to $0. There are benefits to never going to a $0 balance in the FHA.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA percentage may be changed anytime" by "alwaysontheroad4bigblue". Full excerpt: That may be good news for those trying to approach a $0 balance in the FHA without actually getting to $0. There are benefits to never going to a $0 balance in the FHA.

    However, with the ACA, those benefits aren't as important as they once were. For example, starting in 2014 pre-existing conditions (i.e. high blood pressure, depression, a pimple on your a**) will no longer prevent you from getting health insurance. Insurance companies can no longer drop you if you get sick. There are no longer life-time limits on covered medical expenses (getting seriously ill is the leading cause of bankruptcy today in the U.S.). There are no longer annual limits on covered medical expenses (again, reducing the leading cause of bankruptcy.)

    And, given the subsidies for low- and middle- income individuals and families, coverage through the ACA health exchanges is likely to be *much* cheaper than buying insurance from IBM. (Many believe that IBM derives profits from its self-insured retiree programs.) I'm about to run the numbers and check out the programs available in my state, but my guess is that I'll save my FHA funds until I'm Medicare-eligible, and use them then for Medicare supplemental insurance.

    My main point is that with the ACA, losing access to insurance through IBM (after your FHA runs out) is not the disaster it once was. In the past (and in the future, given the desire of the Tea Baggers), if you had any pre-existing condition (i.e. pimple on your a**), the *only* place you could get health insurance in early retirement was through IBM. That will no longer be the case starting in 2014.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA percentage may be changed anytime" by Thomas Hickey. Full excerpt: Could someone remind us 'old retirees' what the FHA is, who is eligible and who is not, etc.?
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA percentage may be changed anytime" by "madinpok". Full excerpt: The FHA is the Future Health Account and applies to employees who were not First Choicers on July 1, 1999 when IBM rolled out the Cash Balance pension plan.

    Under the old retiree medical plan, IBM provides a subsidy of the insurance premiums that is capped at an average of $7000 per year for pre-Medicare retirees (or $7500 for pre-1991 retirees) and $3000/3500 for Medicare retirees.

    Those under the FHA have a notional account that IBM contributed $2500 a year to for up to 10 years while you are employed. A typical retiree might end up with $40,000 to $50,000 in this account. The money can be used ONLY to purchase insurance from IBM at the "full" price, as determined by IBM.

    For example, in 2013, the low deductible PPO plan for self-only costs $445 per month for a pre-Medicare retiree under the old plan, while it costs $904 a month for a retiree under the FHA plan.

    Under the FHA plan, a retiree can choose to withdraw 0 to 100% percent of the monthly premiums from their account (assuming they have any money left to withdraw). Any remaining balance comes out of their pension check or their own pocket.

    Retirees hired after 2004 can get access to IBM health insurance but don't get any FHA money. They have to pay 100% of the bill out of their own pocket.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA percentage may be changed anytime" by "madinpok". Full excerpt: FHA percentage instantly went to 0% and my notional balance quickly reset to $0 the day when RA'd with over 25 years of IBM service. I just was born too late or at the wrong time: I wasn't 55 years old at separation. No age discrimination in any form of course by IBM! LIFE IS NOT GOOD for those IBMers that don't get the FHA.
  • CRN: IBM Channel Executive: Partners Must Embrace Change. By Robert Westervelt. Excerpts: The era of maintaining a hardware-only business is coming to a swift close, according to a veteran IBM channel executive who told IBM partners to embrace change and expand the breadth of services they offer their clients.

    IBM is being forced to offset its declining hardware business by focusing less on physical processing and storage equipment and more on delivering cloud software and service offerings. The company recently said it would furlough employees in its hardware Systems and Technology Group for a week later this month as a cost-cutting measure, while it works on retooling its business for cloud-based solutions. IBM recently won a $1 billion contract to provide cloud computing services to the U.S. Department of the Interior, which will rely on the company for cloud computing technologies, services and hosting, IBM said.

  • EE Times: Outsourcing American Jobs: Where's the Debate? By Carolyn Mathas. Excerpts: According to a recent report on the Global Research website, the outsourcing of US jobs represents a larger threat than terrorism.

    That's a pretty big claim. The story cites a new book, Outsourcing America: The True Cost of Shipping Jobs Overseas and What Can Be Done About It, published by the American Management Association, and penned by brothers Ron and Anil Hira, that mounts a strong indictment of a one-sided corporate view.

    The authors state that there is a lot of corporate bluster, but no real pubic debate on the issue -- with non-corporate views dismissed as protectionism. In the book's forward, Lou Dobbs, CNN anchor and host of that network's Exporting America, says, "Many of our business leaders have lost all sense of responsibility for their country, communities, employees, and the public trust. These leaders have promoted the false notion that American workers are not capable or are overpaid."

  • Financial Post (Canada): Sears Canada cuts 245 jobs, outsourcing IT positions to India and the Philippines. By Mashoka Maimona. Excerpts: Sears Canada is laying off 245 workers, the lion’s share in its information technology department, with plans to replace them by partnering with companies that outsource to India and the Philippines, a senior spokesperson confirmed Tuesday. ...

    The 138 laid-off IT employees will be replaced by Filipino workers in Sears Canada’s partnership with technology giant IBM. Sears Canada is also looking to new vendor Wipro Ltd., an Indian outsourcing service company, to replace the rest of its discharged force. ...

    Mr. Power said a “small contingent” of workers will remain in Canada, but the “majority of the work [IBM and Wipro] will be doing for [Sears Canada] is done overseas.” Dismissed employees will be leaving the company starting November until next spring.

  • Glassdoor IBM reviews. Selected reviews follow:
    • Great company, great values, but awful senior management” Project Manager (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: The company has excellent values, take it seriously and give you opportunities to advance on career and learn a lot. Cons: Cost, cost, cost—not able to take a cab without proper approval. And results management is falling down—in the past decisions were taken to create long term value. Now it's just to close quarter. Advice to Senior Management: Take care of people. IBMers are reason for company to exist. If you won't care for them, someone will. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • No future” Software Engineer (Current Employee), San Jose, CA. I have been working at IBM full-time for more than 5 years. Pros: Old smart people are around. IBM name is still prestigious. Work from home flexibility. Cons: They no longer invest in people. No company-sponsored training (despite CEO announcement). Cut all cost, even on office vacuum. 401K matching at the end of the year. Advice to Senior Management: To stay competitive in Silicon Valley, this is not gonna work. People will keep moving to company with more education supports with better employee benefit. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Not good for long career; not too bad right out of school” Software Engineer (Former Employee). I worked at IBM full-time for more than 10 years. Pros: Experience early on in your career. Cons: Too many to list...company too focused on quarter-to-quarter results as opposed to long term. Approach doesn't line up with career development for employees. Advice to Senior Management: Don't really care about advice so I won't waste any brain activity with this. No, I would not recommend this company to a friend.
    • Rapidly heading offshore” Advisory Software Engineer (Current Employee), Austin, TX. I have been working at IBM full-time for more than 10 years. Pros: The company generally embraces open source. I suspect this is mainly because they have no choice; nobody wants their clunky and vastly complex proprietary solutions.

      Cons: There is just a shell of the former workforce remaining in the US, maybe 20%. The remainder is overseas in the 'low cost geographies', and the drain continues apace. You too will be encouraged to move to India or China and work there for the locally prevalent wage; they call it the Magellan initiative, lol. Your manager will be from one of those places in any case. Profitability is maintained by squeezing out costs; you will not ever come across a company that is so focused on not spending any money.

      Advice to Senior Management: IBM is an IT company and yet management appears to be so clueless and disinterested in it. Put a value on technology for a change. Attempt to recognize it when you see it, and reward people who create it. Give people at least some kind of raise every year, if only to keep up with inflation. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Not what it was” IT Specialist (Current Employee) Bogotá, Colombia. I have been working at IBM full-time for more than 3 years. Pros: Nice stamp on your CV. Good place to learn a lot. Cons: No salary raising. You are nothing if you are not in sales dept. No growth. Advice to Senior Management: Don't think just on EPS; there are valuable people working for you and that is your strongest strength. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Experience is very different from job to job” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 5 years. Pros: Base compensation is good in my job type. They do an OK job of looking after the top performers. Good medical insurance, strong 401(k) matching, ESPP opportunities, good starting PTO allowance. Many employees are allowed to work from home part of the week, if not full-time. Some types of jobs are more or less "9 to 5."

      Cons: Decreasing benefits over time (limited/no pay increases, steep increases in insurance rates with less coverage). The best benefits (pension, large vacation allowances) were cut for new employees 5+ years ago. The company has trouble retaining new employees for these reasons. We are constantly expected to handle more workload with fewer people and no incentive to take on more. Performance evaluation program is not very equitable, and only the very top performers see any real movement in salary. Those in technical job types in the US work long hours and are expected to be available to work weekends, holidays, nights, without additional compensation.

      Advice to Senior Management: The experience of being "an IBMer" varies tremendously from job to job. Technical vitality is being driven out of the business because you are not looking after your employees. Top performers are probably happy with their incentives and compensation, but you need the "solid" employees to get the job done, too! No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Great colleagues, low salary and destructive management.” Production Support Analyst (Current Employee), Shenzhen, Guangdong (China). I have been working at IBM as a contractor for more than a year. Pros: Work force is quite diverse; some of them are really good. There used to be some positive points, before the implementation of the almighty GDF model: 1) Pleasure to work with co-workers, smart people with fantastic skills; 2) Generally easy going work environment; 3) Thanks letters meant something.

      Cons: Global Delivery Framework (GDF), which was borrowed from Toyota's LEAN leadership and intensified upon. Now we have:

      • Tons of procedures to follow on, and here's one classic summary of following procedures by senior colleagues (don't know who said it first though)—you will be punished for not following a procedure, even if you were doing the right thing. You will NOT be punished for following a procedure, even if it made you do something wrong.
      • People start fighting for advancement/promotion; you wouldn't believe how one person can do something utterly disgraceful to get favor with management (towards team leader and 1st line manager).
      • Work more, more work loads, but without increasing your salary. Destroy the morale; who cares.
      • Unbalanced paid level in the team, with leaders who can earn more than 2 times than regular employees (more than 3 times than contractors). Guess what? They push all the work loads to normal employees, especially the account focal points (tiny account leader without power).
      • Stress on FTE (full time equivalent, regular employee head count, to put it simply) savings by GDF continuous requirement. The smart design of GDF that forces people to quit on their own without ever issuing RA.
      • Contractors are treated as sub-employees; not much career options before conversion to regular employee. Now this conversion becomes more of an illusion since IBM got bad quarterly reports in 2013 1Q & 2Q. (So much financial engineering on the earning reports, but people will notice the flaws in the end.)
      • W3 never tells a true picture of the company, so most people are still in the dark.

      Advice to Senior Management: There is no advice to all levels of managements, after all, you don't really need us for your EPS goals. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Company is leaving” Anonymous Employee (Current Employee). I have been working at IBM as an intern for more than 3 years. Pros: The fellow employees are really nice and rather smart. It is a lot of fun to work in this environment. Cons: However the location of Rochester MN is slowly being shut down. IBM wants out of Rochester. There are little opportunities left. Advice to Senior Management: Rochester works hard and can handle the work you throw at them. You just have to let them try. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Excellent, established company with great career opportunities” Program Manager (Current Employee), Boulder, CO. I have been working at IBM full-time for more than 10 years. Pros: Great benefits, great education and training packages. Cons: A lot of downsizing. Each year the organizations have to meet efficiency targets which generally means offshoring jobs from major markets to growth market countries. Advice to Senior Management: Continue developing employees through skill programs. Increase %'s for annual reviews and promotions. Yes, I would recommend this company to a friend.
    • IBM India—Company is too big to value employees. HR policies are not employee friendly.” Test Lead (Current Employee), Overland Park, KS. I have been working at IBM full-time for more than 3 years. Pros: Brand name. Larger pool of projects. Cons: Unfriendly HR policies. Promotions are really slow and based on politics and not on performance. No salary hike when onshore. Frequent manager changes. Unfair appraisal and ratings.

      Advice to Senior Management: Give more value to employees and look at promotions seriously. Divert the time and energy spent on trying to avoid giving promotions and use it towards better HR management. Remove HR function from managers and reallocate to people who are trained in HR functions. Manager is too powerful in this organisation and this had led to widespread corruption and blatant violations of BCGs by managers. BCG should not be applicable only to junior and senior engineers. Managers should be held in check. No, I would not recommend this company to a friend.

    • Great to work from home, very bureaucratic, everyone a small cog in a very big machine” Solutions Architect (Former Employee). I worked at IBM full-time for more than 5 years. Pros: -Good managers and people; -good work environment; - work from home; -good work life balance. Cons: -Incredibly unchallenging work; -tedious processes for everything; -cold and indifferent to employees—does not inspire loyalty or is loyal to employees. Advice to Senior Management: Not all but many in executive ranks (VPs) with very poor competence or leadership skills or vision—basically paper pushers. Cleaning up executive ranks would be good. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Not bad...company losing its focus.” Advisory Software Engineer (Current Employee), Dallas, TX. I have been working at IBM full-time for more than 10 years. Pros: Opportunities for training. Lots of chances to move into different areas of technology. Cons: Bad work/home life balance. Expected to work long hours and travel 100% of the time. Advice to Senior Management: Listen to employees more. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Great company, but highly fragmented” Marketing Analytics Consultant (Former Employee), New York, NY. I worked at IBM as a contractor for less than a year. Pros: Great benefits, work life balance, nice co-workers, work from home. Cons: Hard to get stuff done; collecting data is a nightmare. IBM does not eat their own dog food; "the cobblers son has no shoes" was stated a number of times. IBM has an attitude that they can coast on their name and are not taking new entrants serious enough. Advice to Senior Management: Stop coasting on the IBM brand and re-think marketing metrics. Yes, I would recommend this company to a friend.
    • so so” Architect (Current Employee). I have been working at IBM full-time for more than a year. Pros: You can work from home. Cons: Propaganda is nice, but the salary is not good. They want you to delivery lots of projects, but they don't pay overtime. They want you to get certified, but don't pay any training. They make a lot of profit and cut benefits. Advice to Senior Management: Hear your employees sometimes. No, I would not recommend this company to a friend.
    • Great school, great people, poor management and unsuitable policies for Greece” IT Specialist (Former Employee), Athens (Greece). I worked at IBM full-time for more than 3 years. Pros: Self development, very competent colleagues, professionalism, service delivery excellence, customer and branch exposure, excellent value for your CV, opportunity to work abroad, training both external and internal. Cons: Low pay, non existing raise opportunities even with excellent reviews, poor team building. Advice to Senior Management: Start recognising and rewarding high performers not only in theory. I'm not optimistic about the outlook for this company.
    • Company is Awesome.” Managing Consultant (Current Employee), Houston, TX. I have been working at IBM full-time for more than 3 years. Pros: Work culture, work-life balance, job security, travelling opportunities, career advance, training for self Improvements. Cons: Work pressure, too much travel, hectic day to day assignments. Yes, I would recommend this company to a friend.
    • It's OK.” Anonymous Employee (Current Employee). I have been working at IBM. Pros: It has a good reputation. Cons: The benefits have been decreasing steadily as the years go on. The pay is only competitive at being hired. The longer you stay the more you lag behind. Advice to Senior Management: Don't stiff your employees. Yes, I would recommend this company to a friend.
    • 2015 Deadlines mean more than quality, products and people” Software Development Engineer (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Opportunities to move around within a global organization (they actively encourage technical staff to consider moving to China, India or Africa). They encourage patent invention and intellectual IP.

      Cons: They have lost their way. Senior management encourages a message of "client first". Yet they have slashed staffing to WAY beyond the ability to create, deliver, market and train products of quality to their customers. Research and engineering employees who truly believe in doing a great job no longer have the ability to do so.

      IBM is aggressively moving towards cloud/big data technologies, but are trying to do so with little investment.

      Do more with less is fine...and sometimes a reality. But do more with less for years, and less benefits and no work-life balance is not sustainable.

      Advice to Senior Management: IBM employees want to do the right thing. They are hard working, bright individuals with integrity and loyalty to their jobs. The breaking point has been reached. Slash and burn has taken too great a toll on products (that make money despite IBM) and the employees who work on them. Invest in your people. Give them the ability to succeed. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Good company to work. Very Much Process Oriented. Salary is biggest concern among employees of this organization.” Project Manager (Current Employee), Calcutta (India). I have been working at IBM full-time for more than 3 years. Pros: Process oriented. Separation of duties well defined. Flexible working hours. Matured organization. Very strong Global Delivery Model. Customer focus company. Tiered structure of review. Strong AMS engagements. Best company customer can think of for any implementation, AMS with concept "Follow The Sun". Constant touch of improvement happening to make organization become more competitive in front of Indian pure plays.

      Cons: No salary hikes. Salary remains stagnant. No growth available after certain band. If progression happens, salary is not hiked as per expectation. Most of the employees are dissatisfied. Company does not share the profit with employees. The hike percentage is pretty low. No motivation among employees to perform better and stay in the organization.

      Advice to Senior Management: Management should focus on to make employee friendly by sharing profits with employees, giving away bonus, hikes to retain talent. No, I would not recommend this company to a friend. I'm optimistic about the outlook for this company.

    • Limited mobility” Advisory Software Engineer (Current Employee), Austin, TX. I have been working at IBM full-time for more than 10 years. Pros: Feel like I have a pretty flexible work environment. Good people to work with. Cons: Always on mentality; have been called while on vacation multiple times asked if I saw the email or could I log on etc. Fewer and fewer people with experience; low annual profit sharing due to unrealistic target numbers. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Excellent” Product Manager (Current Employee), Somers, NY. I have been working at IBM full-time for more than a year. Pros: A very process oriented company. Cons: No cons at all. Everything is good! Advice to Senior Management: Need to continuously nurture talent. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Amazing possibilities of professional growth in a global footprint company—poor salary, though” Business Development Manager (Current Employee). I have been working at IBM full-time for more than 8 years. Pros: You get to working with best-of-breed professionals interconnected worldwide to share knowledge, capabilities and completely different competencies. You are in a privileged position for understanding and applying latest topics (e.g., Big Data, Analytics, cloud computing strategies etc.) Cons: Poor salary, insignificant salary reviews, meaningless criteria for evaluating employees. Being a huge company there is a huge load of processes and people involved even in the smallest activities, this often makes it hard to put in place dynamic initiatives in a timely manner and bring overload to your day-by-day work. Advice to Senior Management: Get a higher education. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Best days are behind it” Software Developer (Current Employee), Austin, TX. I have been working at IBM full-time for more than 10 years. Pros: Worldwide presence. Part of virtually every IT business. Lots of good people. Cons: Severe budget cuts and layoffs to support a $20 per share earnings goal. Good talent leaving. Too many executives whose main purpose in life is polishing the bottoms of there superiors and defending their turf. Policy of buying technology instead of developing it. Advice to Senior Management: You need another Gerstner. Sam and Ginny only know how to cut, not build. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
  • Glassdoor IBM Canada reviews
    • professional working environment but with heavy workload” Anonymous Employee (Former Employee). I worked at IBM Canada. Pros: I like the flexible working style and professional working environment; they provide the training courses for the employees, which is good for individual. Cons: The workload is pretty heavy so that overtime is needed, Depending on the manager, sometimes, work overtime does not have any compensation. Another thing is, everyone in the company is just a number.
  • Pension Rights Center: Congress should protect investors, not undermine them. By Karen Friedman. Excerpts: In 1975, when the U.S. Department of Labor issued a rule defining who is an investment advisor under the Employee Retirement Income Security Act (ERISA), the Vietnam War had just ended, Steve Jobs was tinkering around his dad’s garage, and Angelina Jolie was barely in diapers.

    To say that the world has changed since then is an understatement. In the years since, the retirement world has changed just as dramatically: the once prevalent professionally-managed defined benefit pension plans are on the decline, while do-it-yourself 401(k) plans and IRAs are ascending in popularity.

    In an effort to keep up with the changing retirement landscape, the Department of Labor is trying to modernize its investment advisor fiduciary rules. By updating these rules, the agency wants to ensure that the professionals who give investment advice to millions of everyday workers and retirees in 401(k)s and IRAs do so without conflicts of interest.

    Who could disagree with that?

    The financial industry, of course. Many of the financial advisors who make a fortune by advising their clients to invest their retirement assets in stocks that pay the advisors a finder’s fee have launched a lobbying blitz to stop the Department of Labor from protecting the interests of workers and retirees whose retirement security depends on these funds. ...

    Janice Winston, a Verizon retiree, described her surprise upon learning that investment advisors aren’t required to act solely in the best interests of their clients: “I thought that anyone I paid to advise me would be guided only by my best interests. This is important, because I really have no good way to evaluate whether my investments are performing well or whether I am paying too much in fees.”

  • Alliance for Retired Americans Friday Alert. This week's headlines:
    • Retirees Observe 50th Anniversary of Martin Luther King, Jr.’s March on Washington
    • New Report Exposes Fatal Flaws in Proposals to Cut Benefits for Older Americans
    • Seniors’ Hospital Discharge Instructions Are Often Inadequate
    • Washington State Alliance Holds its Convention
    • Coyle Speaks at DNC’s Senior Coordinating Council Meeting
  • The Smirking Chimp: Don't Get Complacent About Social Security. They Still Want to Cut It. By Richard Eskow. Excerpts: Troubling Signs. The president's willing to cut benefits. Once again the president has wisely shifted his rhetoric from deficit reduction from job creation. Would he still cut Social Security, wounding one of his party's signature achievements and dealing a harsh blow to its electoral chances?

    He's certainly been willing to do it before. One of his first executive acts was the creation of a "Deficit Commission" led by two rabid anti-Social Security activists, Erskine Bowles and Alan Simpson. Social Security was included in their mandate even though it's forbidden by law from adding to the deficit. And a very senior Cabinet official told this writer and other journalists early in the Obama presidency that the administration intended to push for Social Security cuts.

    And remember: These moves were made when Democrats held the White House, the Senate, and Congress.

    The president was also planning to announce unilateral cuts to Social Security in his 2011 State of the Union message until, as the Wall Street Journal reported, he was pressured to back down at the last minute. And he continues to push for these cuts in negotiations with the Republicans.

  • Washington Post: A better way to save for retirement? By Michael A. Fletcher. Excerpts: Declaring the nation’s private-sector retirement system “broken,” the Center for American Progress is adding its voice to the growing call for a new kind of investment vehicle to shore up retirement security for workers.

    CAP, a liberal think tank closely associated with the Obama White House, called the current system, which relies increasingly on worker-directed individual retirement accounts and 401(k)s,“unnecessarily costly and needlessly risky.” That cost and risk, the center said, could be reduced by adopting retirement plans that combine elements from both traditional pensions — those fast-disappearing benefits that provide retirees a fixed payment for life — and defined-contribution plans such as 401(k)s.

    Such a system would feature regular lifetime payments for retirees and professional management of investments, such as a pension. And, like 401(k)s, the plan would offer portability for workers, who are changing jobs more often than ever. It also would promise predictable expenses for employers, who have been abandoning traditional pensions for decades because of what they consider excessive cost.

    An analysis of the proposal found that if workers made regular lifetime payments into a pooled, professionally managed fund, they would be much better off than if they funneled the same money into a 401(k), which is the dominant retirement savings vehicle for workers in the private sector.

New on the Alliance@IBM Site

Job Cut Reports

  • Comment 08/20/13: A reliable source told me that STG Employees in Germany will NOT be subject to the furlough, as they are unionized. If you are one of our German colleagues, could you please comment on this? Also, any thoughts you might have on how union representation has been beneficial for you would be appreciated. Thanks. -Voting Alliance Member-
  • Comment 08/20/13: NC Severance & Unemployment Pay: A severance package including severance pay and other benefits makes you ineligible for unemployment benefits in North Carolina until the package benefits are used up. You are considered employed while receiving severance pay. If you received your pay in a lump sum, the Employment Security Commission will use your previous pay rate to determine how many weeks the severance pay should last you. After those weeks have passed, you can file for benefits. -Anonymous-
  • Comment 08/21/13: Hmmmmm, gotta be an employee on DEC 15th in order to get your 401k matching contributions for whole year. So that means I can take the money & then just quit. Not really do anything to bring value to the company in the meantime. Such WONDERFUL actions certainly don't inspire the desire to work diligently. So yes, I'm done as soon as I'm eligible for my 2013 matching contributions. -Toiling-in-Tulsa-
  • Comment 08/22/13: -anonymous_retiree- has it correct. HR exists to protect a company FROM being sued. From being sued by it's employees and from being sued from things that it's employees do. It does not exist to benefit employees. Everything that HR tells you to do or your manager to do is to protect the company from running afoul of some law, rule or practice that could expose the company to penalties.

    I'm expecting a BIG increase in medical plan costs from IBM when we have to pick our benefits in a month or so. A company that will fire the troops, furlough more workers, delay 401k matching, delay salary increases, eliminate bonus, eliminate awards, slash training...all so it can buy back more stock to magically inflate EPS, will surely want to take more from employees and make smaller contributions towards benefits. I sure wish I was protected by a union contract that kept the company from slashing my benefits and increasing the cost to me. -Blue_Flu_Lou-

  • Comment 08/22/13: Wow, no mention here that as of Aug.1st in STG/ISC Poughkeepsie, NY, that 95% of manufacturing was taken over by Jabil Circuit? About 80+ transferred out of IBM including temps and management. No severance, no package, no paperwork, just a shiny new time clock and no accrued vacation for the rest of the year. -"anon"- Alliance reply: There are a few mentions of "Jabil" on this board. Just do a search/find for Jabil. It may also be in the archives.
  • Comment 08/23/13: Well as I read about RAs and required furloughs I am reminded that the top six people in the shareholder report got $88,215,656 in compensation. Based on that I see why they need to layoff people. How will they get to $100,000,000? -Gary Flatbottom-
  • Comment 08/23/13: All ITSO contractors were assessed a 10% rate cut in their pay, effective August 31. Was informed had nothing to do with performance, but that IBM management above ITSO managers instituted the mandatory pay decrease. -Web duchess-
  • Comment 08/23/13: Doctor Steve: You realize that PBC's have always been a farce, modeled closely to Chinese show trials. And yes, there does not seem to be any IBM strategy other than reducing US work force, period. Get the anger out and then move on to a happier place. STGers, enjoy that vacation. -AlsoAxed-
  • Comment 08/25/13: Watson Wyatt rears its ugly head again, this time as Towers Watson Co. Remember the IBM Cash Balance plan and who designed it for IBM? Well they're BAACK...now as Towers Watson and they are the new people running IBM's retiree health choices (called ExtendHealth). It appears that Fidelity has been removed from that duty. From the information I have seen so far everything that IBM retirees had as health care choices is now over and you are required to make new selections for 2014 or you will not have any health-care in 2014. More info to follow but as we all know, anything that has the Watson Wyatt name attached to it cannot benefit the IBM employee. -IBMSCREWED-
  • Comment 08/25/13: I have to agree with those who posted about PBC ratings. They are a farce. The ratings are used to cull the herd. Case in point: this past layoff. For the past 2 years, management has been given marching orders to increase the number of '2s and 3's and to decrease 1s and 2+s. This gave them a bigger pool of 'victims' to layoff. -miss_understanding-
  • Comment 08/25/13: -Dave- Furloughs are less damaging to the stock price than forced pay cuts. If they instituted forced pay cuts they would have to acknowledge a cash flow problem. With furloughs it can be passed off as a lack of work. -anonymous_retiree-
  • Comment 08/26/13: About the change in medical plans for IBM retirees, go to the IBM pension yahoo group, a lot is being posted there. Basically, IBM is transitioning their retirees off of the IBM plans onto a private exchange Extend Health, supposedly the largest such company. The plans are the same as you see on Medicare.gov for your zip code. The exchange company helps you choose a plan, answers questions and administers the IBM subsidy for those who get that. -anonymous-
  • Send the RA pack to ibmunionalliance@gmail.com so we can validate and count the number of workers fired. Names are confidential.

How Does the Furlough Affect You & Your family

  • Comment 08/19/13: I'm using the furlough to find another job than the cesspool I'm currently in! -GDF'ed-
  • Comment 08/20/13: The furlough means IBM is in existential struggle. It's not as bad as laying off all the U.S developers and shifting jobs overseas, however. Saving millions may sound like a good decision, but losing U.S. competitive edge to India is a national suicide. We can't be an advanced economy if all we have are service and sales jobs, and give developer know-how to foreigners. It's like outsourcing DOS to Microsoft all over again. -Just Another Number-
  • Comment 08/26/13: The point with exempt vs. non-exempt is that as I interpret current labor law, it's possible a furlough of a salaried worker could force IBM to change their status to non-exempt. If IBM cuts just one paycheck, it sure seems like they are treating you as hourly (to maximize their benefit now vs. over the course of the remainder of the year), which is what a pure salary cut would do. -anonymous-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • Consumer Watch Dog: Class Action Lawsuit Barring “Bait and Switch” Health Plan Deductibles Advances. According To Blue Cross, “Any Term or Benefit” of Health Coverage Could Change Each Month. By Jerry Flanagan. Excerpts: A consumer protection lawsuit that would bar Blue Cross from changing “any term or benefit” of consumers’ health plans each month may proceed, a Los Angeles Superior Court judge has ruled. Judge Jane Johnson green-lighted two class action lawsuits brought by Consumer Watchdog and Shernoff Bidart Echeverria Bentley LLP challenging Blue Cross’s “bait and switch” tactics, including policy fine-print that purports to allow Blue Cross to change “any term or benefit” of consumers’ health plans each month.

    “In the world according to Blue Cross, consumers are required to buy its policies, but once enrolled, Blue Cross can change the price and take away the benefits and coverage it promised,” said Consumer Watchdog staff attorney Jerry Flanagan. “When consumers purchase health plans, they carefully consider the price they’ll pay and the services they’ll receive. If Blue Cross is allowed to boost profits by reducing benefits each month, then consumers’ health plans are worthless.” ...

    Blue Cross has claimed that the mid-year changes to “annual” and “yearly” out of pocket costs were necessary to protect consumers from premium increases, yet Blue Cross:

    • Simultaneously increased premiums by up to 20% in 2011;
    • At the time of the changes had five times the required amount of cash reserves (tangible net equity [“TNE”])—$1.2 billion in excess of state-mandated TNE—while the company paid $950 million in dividends to its shareholders since 2011.
  • Washington Post: Colorado Exchange Releases Health Insurance Rates. By Eric Whitney and Colorado Public Radio, Kaiser Health News. Excerpts: Colorado released its Obamacare insurance rates on Friday, joining 13 states and the District of Columbia in making rates public.

    The state earlier made the call to be a clearinghouse exchange, rather than an active purchaser, and so, it has approved all 242 health plans submitted for sale on its marketplace, Connect for Health Colorado. Thirteen carriers will offer 150 plans in the individual marketplace, and 92 for small businesses. The plans go on sale Oct. 1 for coverage that starts Jan. 1. Colorado also approved 299 plans for sale outside its exchange and prices for them. ...

    So where do the Colorado rates fall in the ongoing debate about whether prices on the exchanges are reasonable? It might be the rare “just right” state.

    Prices range from $135 a month on the low end to almost $1,000 a month for the most comprehensive coverage with some variation depending on a person’s age, where they live and whether they use tobacco. ...

    The Division of Insurance released sample rate information for the new plans earlier this week. It shows that premiums for a 27-year-old non-smoker will range from $135.57 a month for the lowest-cost catastrophic coverage plan to $566.80 for “platinum” level coverage in the individual market. Prices range from $183.72 to $662.32 a month in the small group market, which will not offer catastrophic nor platinum plans. A 40-year-old can expect to pay from $176.89 a month for a bronze plan on the individual market to $967.85 for a platinum policy in the small group market.

  • AlterNet: The Surprising Reason Americans Are Far Less Healthy Than Others in Developed Nations. Americans are losing ground globally “by every” health measure, and it's not why you might think. By Sam Pizzigati. Excerpts: The stats first. They tell a shocking story: Americans now live shorter lives than men and women in most of the rest of the developed world. And that gap is growing.

    Back in 1990, shouts a new study just published in the Journal of the American Medical Association, the United States ranked a lowly 20th on life expectancy among 34 major industrial nations. The United States now ranks 27th — despite spending much more on health care than any other nation.

    Americans, notes the AMA journal, are losing ground globally “by every” health measure. ...

    To really understand America’s poor health standing globally, epidemiologists like Bezruchka posit, we need to look at those social and economic realities that define our daily lives, what scientists call “the social determinants of health.”

    And none of these determinants matter more, these researchers contend, than economic inequality, the divide between the affluent and everyone else. Over 170 studies worldwide have so far linked income inequality to health outcomes. The more unequal a modern society, the studies show, the more unhealthy most everyone in it — and not the poor alone.

    Just how does inequality translate into unhealthy outcomes? Growing numbers of researchers see stress as the culprit. The more inequality in a society, the more stress. Chronic stress, over time, wears down our immune systems and leaves us more vulnerable to disease. ...

    Just how does inequality translate into unhealthy outcomes? Growing numbers of researchers see stress as the culprit. The more inequality in a society, the more stress. Chronic stress, over time, wears down our immune systems and leaves us more vulnerable to disease.

    The United States, over the same span of time, has gone in the exact opposite direction. We have become the world’s most unequal major nation, with health outcomes among the developed world’s worst.

  • Washington Post: Health costs are growing really slowly. Americans haven’t noticed. By Sarah Kliff. Excerpts: Ask any health economist and they’ll no doubt tell you that health care cost growth is slowing, growing at a low, unprecedented rate.

    They can point to the National Health Expenditures report, which shows health care costs now growing at the same rate as the rest of the economy. Or, they can pull up new data out Tuesday from the Kaiser Family Foundation, showing that premiums grew 4 percent in 2013. That’s way lower than growth in the late 1990s and early 2000s.

    Ask any American about what direction health costs are moving, and you’ll likely get a completely different story. Preliminary results for a forthcoming Kaiser Family Foundation poll show that most Americans think that health care costs are actually growing faster than usual right now. Fewer than 10 percent say the growth is slowing down. ...

    It’s also important to look beyond premiums, to the other health care costs that Americans may incur in paying for health coverage. While monthly premiums are growing slower, the Kaiser Family Foundation data shows a steady rise in deductibles, the amount that an insurance costumer must pay out-of-pocket before their benefits kick in.

  • Salon: The “Cadillac” health plan is a myth. A doctor explains that limiting the scope of employer-based health care has long been a dream of the establishment. By Adam Gaffney. Excerpts: What would a gold-plated Cadillac health care plan look like to you? By the sound of it, you might think it’d cover such superfluities as annual trips to Swiss medical spas, cosmetic surgery on demand and weekly thermal seaweed wraps.

    Before concluding that such luxurious plans are the sole preserve of supposedly greedy city workers, keep in mind that by the estimate of one health economist, as many as 75 percent of employer health plans could fall under the “Cadillac” umbrella over the next decade. Reasonably good insurance – you know, the kind that covers all of your medical needs, without making you pay an arm and leg out-of-pocket every time you need to use it – has stealthily become the new Cadillac. However much the reputation of General Motors may have fallen in recent years, this seems like a bit of a stretch. ...

    And looking at the problem from another angle, it became increasingly appreciated that the rise in deductibles, copays and coinsurance was having significant effects on our very health. As I described in a recent article, there are clear downsides to becoming “Copay Country.” There is evidence, for instance, that cost sharing may increase the risk of death for the most vulnerable, perhaps because it reduces expenditure on both “inappropriate” and “appropriate” care. In one recent experiment that randomized patients to copays or to full coverage for prescriptions after they suffered heart attacks, those with full coverage took their medications more regularly – and had less strokes and other cardiovascular complications as result. And all told, there was still no overall increase in cost, either way.

    Yet, in the face of this growing body of solid evidence, we simply continue to hear more and more about how patients (apologies, “consumers”) need to have more “skin in the game” – as if having their physical hearts, lungs or – in some instances – their skin on the line wasn’t enough already.

    So don’t be surprised if you find, in the coming years, that your semi-reasonable-quality heath insurance – perhaps won through hard-fought negotiation, or maybe earned in exchange for lower pay or other benefits – somehow transforms itself into a taxed “Cadillac” plan. From the perspective of much of the health policy establishment, you’ve had it too good, for too long, already. And however nice it might sound, they say we simply can’t afford truly universal health care, with comprehensive benefits for all and with little or no cost sharing (even if other industrialized countries magically manage to do so, at a lower price, and with better results).

  • Huffington Post: Florida Insurers Are Now Free to Screw Consumers and Must, By Law, Blame Obamacare. By Wendell Potter. Excerpts: First do no harm. That's a tenet of medical ethics that future doctors worldwide are taught in medical school.

    If only the people we elect to represent us were required to take such an oath when they're sworn into office.

    Because they aren't, folks in Florida are facing having to pay far more for health insurance over the next two years than necessary. And health insurance executives will be laughing all the way to the bank.

    Florida state lawmakers, in their ongoing efforts to block the implementation of Obamacare in the Sunshine State, recently passed a law that will allow health insurance companies to gouge Floridians more than any corporate boss dreamed was possible.

    And if that weren't bad enough, insurers will actually be required by law to mislead their Florida customers about why they're hiking their premiums.

    Republicans, who control the governor's office as well as both houses of the Florida legislature, were confident the U.S. Supreme Court would declare the Affordable Care Act unconstitutional. Not only did they vote to prohibit the state from spending money to implement a law they just knew would be overturned by the high court, they refused to accept money from the federal government that would have enabled the state's department of insurance to do a better job of regulating health insurers and enforcing new consumer protections in the law. ...

    Their response? They passed a bill that prohibits the state's Office of Insurance Regulation from protecting consumers from unreasonable rate increases for two years. ...

    Last month, McCarty's office said insurance premiums for individuals in Florida would be significantly higher than they are now. In their letter to Sebelius, the state's congressional Democrats wrote that those increases are "not a coincidence, but rather the product of a cynical and intentional effort by Gov. Scott and the Florida legislature to undermine the Affordable Care Act and make health insurance premiums on the Florida Health Insurance Marketplace more expensive by refusing to allow the insurance commissioner to negotiate lower rates with companies or refuse rates that are too high." ...

    As Florida CHAIN, a state advocacy group, pointed out when Scott signed SB 1842, the law not only blocks McCarty's office from protecting consumers, a provision in the law actually requires insurers to send deceptive and misleading notices about rate increases to consumers -- and to blame Obamacare for them.

    "The only 'public education' of any sort authorized by the Legislature related to the ACA (Affordable Care Act) is a requirement ... that insurers send extremely biased and incomplete notices this fall about the ACA and its effect on policyholders' rates," Florida CHAIN said in a statement.

    "The sole purpose of the requirement is to create 'sticker shock' that can be blamed on the ACA. There will be no mention of the many uncertainties or any other relevant factors, such as past rate increases or how actual rates will be reduced for many by the availability of premium tax credits (to low and middle income earners.)"

  • Public Irony: Why Republicans Will Not Repeal Obamacare. Excerpts: Meet Clint Murphy. Last week, while Newt Gingrich was explaining why Republicans couldn’t repeal Obamacare unless they came up with a better replacement, Murphy showed a more direct example of why they can’t repeal Obamacare.

    Murphy is a Republican foot soldier. The kind of party activist who has worked on Republican campaigns including Casey Cagle, John McCain, and Karen Handel. The problem is, political foot soldiers like Murphy only have paid jobs during campaigns. And even in this era of perpetual campaigns, they are going to find themselves out of work from time to time. Which means that if people like him ever get one of those dreaded “pre-existing conditions”, without Obamacare’s requirements that insurance companies cannot turn you down for having a pre-existing condition, they would never be able to qualify for health insurance.

    And of course, in a high stress job like politics, eventually you will get a pre-existing condition. In Murphy’s case, it was testicular cancer.

    It doesn’t matter that after some chemotherapy his cancer has been in remission for over a decade. And even if the cancer didn’t count as a pre-existing condition, Murphy also has sleep apnea, a condition for which the insurance companies also turned him down. So even though Murphy is only 38, he has no health insurance.

    Last week, on the same day as Newt Gingrich was speaking, Murphy made a post to his Facebook account about Obamacare:

    When you say you’re against it, you’re saying that you don’t want people like me to have health insurance.

    When Georgia’s health insurance exchange opens in October, as mandated by Obamacare, Murphy says he will “absolutely” sign up. Murphy also points out the irony of how repealing Obamacare could push people like him into bankruptcy, which could lead to welfare, and thus increase the cost of government.

  • Accounting Web: Study: Tax Credits for Obamacare Expected to Average $2,700. By Jason Bramwell. Excerpts: Americans who currently purchase their own health insurance through the individual market would receive tax credits averaging nearly $2,700 next year for coverage purchased through new insurance marketplaces under the Affordable Care Act (ACA), also known as Obamacare, according to a new study from the Kaiser Family Foundation.

    Assuming all eligible current enrollees applied for a tax credit, the subsidy would reduce the premium for the second-lowest-cost silver plan by an average of 32 percent across all people now buying insurance in the individual market. ...

    "Tax subsidies are an essential part of the equation for many people who buy insurance through the new marketplaces next year," Kaiser Family Foundation President and CEO Drew Altman said in a written statement. "They will help make coverage more affordable for low- and middle-income people."

    Tax credits will be available to subsidize premiums for people who buy their insurance in the new marketplaces, do not have access to other affordable coverage, and have incomes between 100 percent and 400 percent of the federal poverty level (between about $11,500 and $46,000 for a single person, and $24,000 and $94,000 for a family of four).

    An estimated 48 percent of people who currently have individual market coverage will be eligible for tax credits, according to the study. Tax credits among those eligible will average $5,548 per family, and subsidies will average $2,672 across all families now purchasing their own insurance. Many people who are now uninsured also will be eligible for subsidies in the new marketplaces, and their tax credits will likely be higher on average because they have lower incomes than those who now buy their own coverage.

  • New York Times opinion letter to the editor: Invitation to a Dialogue: Shopping for Insurance. By John Kingsdale. Excerpts: For three years now, Democrats have implored states to develop health insurance exchanges, while Republicans have tried equally hard to block them. They will soon open, but in 33 states without their own, people will be served by a federal exchange. ...

    How will these exchanges improve health insurance? First, they will provide individual consumers something new: one-stop shopping with a side-by-side comparison of health plans. By standardizing coverage, patient cost-sharing, pricing, quality and service metrics, exchanges make informed choice of health plans easy. ...

    Mitt Romney, the Republican standard-bearer in 2012, was so smitten with this conservative policy tool that as governor he made exchanges the centerpiece of Massachusetts’s landmark health reform. It remains very popular here.

    So why do most Republican politicians now oppose exchanges? Arguing that Obamacare is a fiasco and that the federal government will mismanage exchanges, Republicans plan to campaign on health reform’s failure. By blocking states from developing their own exchanges and threatening to defund the federal exchange, they hope to make their own dire prediction come true.

  • Washington Post opinion: The GOP’s Obamacare youth hoax. By Matt Miller. Excerpts: It’s rare for a political party to trumpet a position that unintentionally reveals its myopia, incoherence and expediency. Yet such is the trifecta with the Republican campaign to call attention to Obamacare’s young “victims.”

    Republicans are obsessed with the supposed injustice being done to some healthy young people who will effectively subsidize their sicker elders when Obamacare’s individual mandate takes effect. ...

    Conservatives are therefore urging young Americans to resist. “I’m burning my Obamacare draft card,” runs one theatrical riff from a group called Young Americans for Liberty, “because I’m too busy paying student loans to pay for somebody else’s health insurance.” Republican policy advisors have urged the party to make such child abuse a big part of their anti-Obamacare message.

    Sounds like a sexy argument, except for one thing. Republicans seem to have forgotten where most people aged 19 to 34 get health coverage: from their employer. And at virtually every company, young people pay the same premiums as employees who are much older than they are and who get more expensively sick than they do. In other words, the evil cross-subsidy Obamacare’s foes are storming the barricades to roll back already exists, at vastly larger scale, in corporate America.

    These youngsters are already in chains! They’ve been put there by the private sector! And, inexplicably, young employees have entered this servitude of their own volition. ...

    How could injustice on this scale escape the GOP’s searing moral scrutiny?

    After all, the president is only hoping that about 2.7 million young people will purchase coverage in the new exchanges. But 20 million Americans between the ages of 19 and 34 get coverage from their employer right now, according to an analysis by the Kaiser Family Foundation.

    If you’re keeping score, that makes employer-based health care’s cross-subsidy about eight times more evil than Obamacare’s.

    How does it work? Compare a typical, strapping young employee of 28 to her broken- down 58-year-old colleague. These two employees have very different annual health expenses. Yet under the nefarious plot known as “group health insurance,” they basically pay the same premiums. It turns out every big company in America is essentially a socialized health care republic, in which the young subsidize the old, and the healthy subsidize the sick — all of whom pay the same premiums for the same plans.

    Similar dynamics explain why, in the federal health-care plan, spry 42-year-olds like Marco Rubio and Ted Cruz subsidize 79-year-old geezers like Chuck Grassley and Orrin Hatch. ...

    It would be better if all those smart GOP thinkers devoted their talent and energy to the question of how they would expand coverage to the 50 million uninsured — but to raise that question is to enter the policy cul de sac in all its delicious irony.

    Because the answer to that question is RomneyObamacare, the only sound way (as Republicans rightly taught us) that a country can move toward universal coverage using private health plans. The GOP could offer a tweaked version with slightly fewer regulations. Or structure it to offer universal catastrophic coverage to save money. But if Republicans were serious, they’d offer the same basic reform architecture.

    So Republicans choose not to be serious. And it shows.

  • MedPage Today: Employers Not Deserting Health Benefit Arena. By David Pittman. Excerpts: The percentage of employers offering health insurance to their workers fell only slightly this year compared with last year, according to a large survey released Tuesday.

    The survey by the Kaiser Family Foundation and Health Research & Educational Trust found that 57% of firms offered health benefits in 2013 -- statistically unchanged from 61% last year and 60% in 2011.

    The overall drop came mostly from the smallest firms -- those with three to nine workers -- which fell from 50% offering health benefits last year to 45% this year. But that drop was within the survey's margin of error. ...

    More than three-quarters of workers (78%) have an annual deductible -- up from 72% last year and 62% in 2009. While the average deductible for all workers is $1,135, employees at firms with fewer than 200 workers face ones that are nearly twice as high ($1,715) as at large employers ($884).

  • New York Times: Health Care Costs Climb Moderately, Survey Says. By Andrew Pollack. Excerpts: Premiums for employer-provided health insurance have increased by relatively modest amounts this year, according to a new survey, a further sign that once-torrid health care inflation has abated for now.

    The average annual premium for a family rose 4 percent in 2013, to $16,351, according to the survey results released Tuesday by the Kaiser Family Foundation. Annual premiums for individual policies purchased through an employer rose 5 percent, to $5,884.

    The 4 percent increase for a family is relatively tame, at least compared with the roughly 10 percent annual increases experienced a decade ago. But it is still a far bigger rise than 1.8 percent increase in wages and the 1.1 percent rate of inflation in the last year, the foundation said. ...

    “The critics will have a much harder time blaming big premium increases in employer insurance on Obamacare this year, because there aren’t any big premium increases,” Drew Altman, chief executive of the Kaiser foundation, said in a telephone news conference Tuesday.

  • Physicians for a National Health Program commentary: Modest premium increases hide important part of story. By Don McCanne, M.D. Excerpts: Many of the media reports about this annual Kaiser survey of employer-sponsored plans are expressing relief that the increases in premiums are relatively modest - only about 4 or 5 percent. But these numbers are not so reassuring when you consider that they are over twice the rate of wage increases and four time the rate of inflation. Workers continue to fall behind.

    Also of concern is the fact that plans requiring high deductibles have increased and the amounts of those deductibles also have continued to increase. Thus the percentage increase in the premiums can be quite deceptive if you ignore the increase in out-of-pocket expenses that workers and their families are experiencing.

    Also many employers are now considering private insurance exchanges which will allow them to convert their premium contributions into defined contributions, requiring employees to pick up the additional costs for plans that have more than minimal benefits.

    Also there is considerable variation in the premiums, benefits, cost sharing, and covered populations of employer-sponsored health coverage. As if the average expenses that the employees must cover weren't bad enough, many of them will find that the cost variations will be intolerably burdensome, even if some are better off.

    These trends have been going on so long that they've become quite boring, but the cumulative impact on wage earners can be quite distressing. Giving a new definition to "catastrophic insurance," the costs shifted to the workers can be catastrophic. Instead of catastrophic plans leaving people precariously exposed, what we really need is prepaid coverage that removes financial barriers to health care (i.e., single payer).

  • Kaiser Health News: UPS Won’t Insure Spouses Of Some Employees. By Jay Hancock. Excerpts: Partly blaming the health law, United Parcel Service is set to remove thousands of spouses from its medical plan because they are eligible for coverage elsewhere.

    Many analysts downplay the Affordable Care Act’s effect on companies such as UPS, noting that the move is part of a long-term trend of shrinking corporate medical benefits. But the shipping giant repeatedly cites the act to explain the decision, adding fuel to the debate over whether the law erodes traditional employer coverage. ...

    The company told white-collar workers two months ago that 15,000 working spouses eligible for coverage at their own employers would be excluded from the UPS plan in 2014. The Fortune 100 firm expects the move, which applies to non-union U.S. workers only, to save about $60 million a year, said company spokesman Andy McGowan.

    UPS becomes one of the highest-profile employers yet to bar working spouses from the company plan. Many firms already require employees to pay a surcharge for working-spouse medical coverage, but some are taking the next step by declining to include them at all, consultants say.

  • Washington Post opinion: These three paragraphs say everything about Obamacare. By Sarah Kliff. Excerpts: Huffington Post’s Jason Cherkis spent two days at the Kentucky State Fair with workers from Kynect, the state’s health marketplace. He came back with a better understanding of deep-fried Kool Aid (“funnel cake dough flavored with the powdered drink mix”) and this fantastic anecdote.
    A middle-aged man in a red golf shirt shuffles up to a small folding table with gold trim, in a booth adorned with a flotilla of helium balloons, where government workers at the Kentucky State Fair are hawking the virtues of Kynect, the state’s health benefit exchange established by Obamacare.

    The man is impressed. “This beats Obamacare I hope,” he mutters to one of the workers.

    “Do I burst his bubble?” wonders Reina Diaz-Dempsey, overseeing the operation. She doesn’t. If he signs up, it’s a win-win, whether he knows he’s been ensnared by Obamacare or not.

    This speaks to a point that others, particularly Jonathan Bernstein, have already made: When Americans actually interact with Obamacare, it won’t be called Obamacare at all. In Kentucky, for example, it will be Kynect, the state health marketplace. In Idaho, local residents will purchase coverage from Your Health Idaho. Covered Oregon will serve (surprise!) Oregonians, while neighboring Washingtonians will purchase coverage from WAHealthPlanFinder. If you watch the ads that states have produced to support their marketplaces, they rarely mention the federal law that has set these changes in action.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • New York Times editorial: The Cash Committee. Excerpts: The House Financial Services Committee has grown so large that a highly unusual fourth row of seats had to be installed in the committee room. Every term, scores of members, particularly freshmen, demand a seat on the panel — not because they have a burning interest in regulating banks and Wall Street, but because they know that they will be able raise much more money if one of the 61 seats has their name on it.

    As Eric Lipton recently explained in The Times, Financial Services has become known as “the cash committee” because interest groups donate more money to its members than to those of any other House committee. More than $10 million has been given to its members just this year, and most of it has come from the big names the committee oversees. Contributors included employees of Goldman Sachs, Bank of America, the Credit Union National Association, the Investment Company Institute, Wells Fargo and many of the biggest accounting firms and insurance companies. ...

    Many Democrats on the panel are just as eager to join the feeding line, but the biggest hypocrites are the Tea Party members who claim to be populists. Tom Cotton, a rising Republican on the committee from Arkansas, recently announced that he would run for the Senate next year because he was sick of seeing favors handed out “to the politically connected and the crony capitalists who bend the power of government for their own private gain.” But that didn’t stop him from accepting $381,000 so far this year from political action committees, mostly from finance and insurance interests with business before his panel.

  • The Smirking Chimp: The 'Bankization' of America. By Richard Eskow. Excerpts: The share of our national income which goes to corporate profit is the highest it's been since they started tracking it in 1929, while the share going to people -- as salary and wages -- is the lowest. And the percentage of that corporate profit which goes to Wall Street is also the highest on record.

    We're becoming a financialized economy. Never before has the manipulation of money counted for so much and the real-world economy of people and consumer goods counted for so little.

    And none of it is an accident.

  • Born Rich: Hermes Unveils $1.9 Million Birkin Handbags Crafted from Gold and Diamonds. By Andrea Divirgilio. Excerpt: Vanity, thy name is Hermes. Owning a Hermes is every women’s dream, but for those who take pride in owning a whole collection of these very expensive Birkin bags, including the Rouge Crocodile skin and also the Hermès Diamond Birkin, the French luxury brand has introduced four new Hermes Birkin bags crafted from gold and studded with precious gems, which will perhaps be a piece of jewelry and not just a handbag alone. Each of the four bags adorn a $1.9 million price tag. After all, when designer Pierre Hardy worked on it for the past 2 years to recreate the intricate specimens of design, it is bound to be something truly eye-watering as this one.
  • Smirking Chimp: Oh, won't somebody please think of Mitt Romney? By Thom Hartmann. Excerpts: The bankers, billionaires, and wealthy elite are losing one of their favorite offshore tax havens. The Cayman Islands has finally agreed to cooperate with the U.S., and make it more difficult for the wealthy to stash money overseas. Officials in that nation have agreed to accept provisions of the Foreign Account Tax Compliance Act, which will take effect in July of next year. After that, the Caymans will have to alert our Treasury Department about Americans' who have more than $50,000 dollars stashed in tax-free accounts in that nation. ...

    As it becomes more difficult to hide money offshore, rich people will actually have to pay their taxes, and there will be incentive for the wealthy to invest here at home. The days of the rich skipping out on their patriotic duty of paying taxes could soon be over, and the wealthy may have to start contributing to the care of our commons, which made their vast fortunes possible in the first place.

  • Accounting Web: Coalition Presses Congress to Close Corporate Tax Loopholes. By Jason Bramwell. Excerpts: Groups in sixteen states already held or are holding events later this week to demand that Congress close corporate tax loopholes in order to help avoid more deep cuts to essential benefits and services.

    The events, which are organized by Americans for Tax Fairness (ATF), a coalition of more than 325 national and state organizations, are being held in advance of the expected showdown in Congress shortly after Labor Day on budget and tax issues.

    "With members of Congress back in their states this August, people are demanding that Congress stop corporate tax dodging and invest in America," ATF Campaign Manager Frank Clemente said in a written statement. "Congress faces a clear choice in September when it debates how to keep the government funded: Continue to whack away at critical services that protect our families and that are needed to grow our economy, or close gaping tax loopholes so that big corporations and the rich pay their fair share of taxes."

    On August 20, the ATF released a report, The High Price of Tax Loopholes, that highlights the trade-offs between deep cuts in government services and existing corporate tax loopholes. Some of the tax loopholes cited in the report include the following:

    • Letting corporations defer US taxes on their overseas income until the funds are brought back to the United States
    • Allowing hedge fund managers to cut taxes on a large percentage of their income in half
    • Giving subsidies to oil and gas companies that make billions in profits every year
If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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