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Highlights—September 7, 2013

  • Wall Street Journal: IBM to Move Retirees Off Health Plan. Big Blue's Health-Exchange Move Ends Once-Common Benefit. By Spencer E. Ante. Excerpts: International Business Machines Corp.plans to move about 110,000 retirees off its company-sponsored health plan and instead give them a payment to buy coverage on a health-insurance exchange, in a sign that even big, well-capitalized employers aren't likely to keep providing the once-common benefits as medical costs continue to rise.

    The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care makes its current plan unsustainable without big premium increases. ...

    IBM told retirees that its current retiree coverage will end for Medicare-eligible retirees after Dec. 31, 2013, according to documents reviewed by The Wall Street Journal and confirmed by IBM.

    "Cost increases under our current retirement group health care plan are no longer sustainable for you," IBM said in the notices. "Health care costs under IBM's current plan options for Medicare eligible retirees will nearly triple by 2020, significantly impacting your premium and out of pocket costs," the notice said. ...

    Instead of subsidizing retiree health premiums directly, IBM will give retirees an annual contribution via a health retirement account that they can use to buy Medicare Advantage plans and supplemental Medicare policies on the exchange, as well as pay for other medical expenses. Retirees who don't enroll in a plan through Extend Health won't receive the subsidy. ...

    IBM executives said the company capped health contributions to retirees around two decades ago and more recently stopped contributing to retiree health care for employees hired after the end of 2003. ...

    Some union-affiliated groups and retirees weren't convinced. Lee Conrad, national coordinator for the IBM Global Union Alliance, said the worker group "sees this as just another take-away of retiree and employee benefits."

    Donald Parry, an engineer who retired in 1992 after nearly 32 years at IBM, said he is concerned he may have to pay more. "The worst thing right now is not knowing what's going on," said Mr. Parry, who lives in Fruit Cove, Fla.

    If link is broken, view PDF version.

  • The Medical Quack blog: IBM To Move Retired Employees to a Private Health Exchange At the End of the Year, Run by A Public Investor Relations Firm. Excerpts: IBM will give the retired employees a lump sum of cash toimage spend with the exchange. We certainly have a number of people in the insurance exchange business. Here’s one example that was in news earlier this year where a former Humana executive started on, only took 3 employees to get it up and running.

    Anyone who is eligible for Medicare fits into the new plan. I took a quick look at the Towers Watson website who is running the exchange and they do a lot of things with consulting to include alternative capital for insurers, Responding to US Health Care Reform with consulting for employers, Faster and Better Financial Information for Insurers with actuary analytics (similar in math to what quants do) relative to pension funds to help manage hedging operations, controlling healthcare costs with data and analytics, incentive risk assessment, improving employee health and productivity, rethinking retirement financing, using social media to connect with employees, reinsurance needs…and they have the exchange. I am guessing they have a “loaded” portfolio of all kinds of reports and studies:) ...

    Anyway, interesting to see a heavily consulting insurance firm in the exchange business, but you know there’s money there and with their actuary services maybe some of it gets rolled in to an over all consulting contract.

  • Bloomberg: IBM Moves Retirees to Insurance Exchange as Costs Rise. By Sarah Frier. Excerpts: International Business Machines Corp., faced with rising health care costs for retirees, says it will move them to a health exchange where they may have cheaper plan options.

    The move affects about 110,000 Medicare-eligible retirees, Doug Shelton, an IBM spokesman, said by telephone. The company has chosen the Extend Health exchange by Towers Watson, the country’s largest private Medicare exchange, to provide more options for prescription drug, dental and vision care, the Armonk, New York-based company said in a statement e-mailed today. ...

    “This transition provides more choice and flexibility at equal or better costs to our retirees,” IBM said in the statement. “While some retirees may be skeptical today, studies show that the majority of people who are presented the concept of an exchange are skeptical at first, but once they understand the options available to them through these exchanges, they have a more positive outlook.” ...

    “IBM didn’t make this change to save money -- it does not reduce our costs,” Shelton said, noting that IBM’s subsidies were capped in the 1990s. ...

    The company has made other moves to lessen its costs for current employees. In the second quarter, IBM spent $1 billion to restructure its workforce, cutting more than 3,300 employees in the U.S. and Canada, according to Alliance@IBM, an employee group. It also required U.S. hardware division employees to take a week off with one-third of the pay.

    Selected reader comments follow:

    • IBM and companies like IBM are part of the problem. For example, in Australia IBM is a large IT provider to banks, telco's etc... but they are outsourcing much of their development work and programming to cheap 3rd world countries like India. They have a large development base already in India. So when you think IBM is engaging as a ALL USA company in fact they are not. So they are already making a lot of money by outsourcing yet want to make more for the share holders. They also hire a large number of 3rd world resources that are foreign students etc...and much cheaper than locals.

      Look up details about Westpac bank in Australia, IBM in upper IT circles is well known as a joke provider, they just about destroyed themselves over Westpac and provide shocking support. They won't warranty/guarantee a lot of their coding/programming and this causes large cost blow outs for companies later on down the line. This is mostly because they go after a lot of cheap skilled labor now and hope to sell themselves because of who IBM use to be, quality. But that is no longer.

      If you own a company, the last company you want servicing your computers is IBM. They are also well known for paying the cheapest rates in contracting, on my CV in bold red letters I state NO IBM CONTRACTS as I refuse to work for them because of their cheap rates. And knowing that they pay just about half of what other companies pay you can be sure the quality of their work is about half as well.

    • I worked for IBM support Australia and can only agree. Management are extremly arragant and aggressive. Their equipment was so unreliable and you need to have to the attitude the customer is always wrong. The customer has already paid for a years support but every call you were expected to find a loophole that made it outside the scope of the project and charge for it.
    • I won't even try to attest to quality of IBM Australia because I have no idea. My only point is that a public corporations first responsibility is to make decisions that maximize value for its shareholders. If that means outsourcing then fine. It is the job of governments to establish a hospitable environment for businesses which we do not have at this time.
    • What a load of horse manure!

      Greed gas been the overriding corporate principle since the 80's.

      Before the Reagan revolution, companies took their roles as responsible civic enterprises seriously.

      One company I worked for in the 70's advertised itself as a family and had as one of its overriding principles, the welfare of their employees, whom they considered their most important asset.

      Then came Reagan, the employee manual changed to include the "hire (eg, fire) at will" concept, then shortly after came the first of what has been a long running period of layoffs for greed, with the added benefit of reduced salaries.

      I doubt that stockholders have done as well as corporate management has. But I am certain that employees have become the family black sheep and unwelcome child in the modern corporate family.

      The social contract has been replaced by the CEO golden parachute. Why not? They are the job creators!

    • Excuse me, IBM, but everytime you said that in the past, you took benefits away from your employees and retirees. Not sure I would believe you this time either. Specially, after changing the 401k company match.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM v Retirees Health Plan" by "Steve". Full excerpt: "IBM's Mr. Rhee said in an interview that IBM isn't making the change to cut costs..." Outright lie.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM v retirees health Plan" by Don Shuper. Full excerpt: The short thumbnail is Towers Watson is the result of an merger in 2010 between Towers-Perrin and Watson-Wyatt. Both firms in "the day" were major proponents of the famous Cash-Balance plans in the mid 90's. (source Ellen Shultz - 'Retirement Heist', page 105.

    On pages 37-38 is a description of Towers Perrin and others jumping on the cash balance ripoff, er 'pension scheme', and how to mask pension cuts.

    Just a wild guess, but they (previous firms and merged firms) are not exactly on the grunt employees' 'A' list for the next lawn party.

    And a few IBMers, like bean, might be able to explain in more detail IF they can figure out a way to write in non-obscene language and non-pejoritive terms.

    I'm sure they will agree Towers Watson is NOT your friend; never was, never will be. Document Don

  • Jobs at IBM (cached version courtesy of Google): Development Product Engineering - Advanced Degree. Excerpts: Work city: Albany, NY, Essex Junction, VT, Hopewell Junction, NY. IBM Systems & Technology Group. Job description: Systems and Technology Group has openings for entry-level development engineers to support our hardware and semiconductor products. We develop industry-leading hardware for IBM Systems, storage, and related products. Development engineers participate in various aspects of the development, quality and test process, such as: circuit or logic design, verification, synthesis, physical design and layout, simulation, performance modeling, chip integration, design methodology, power optimization, architecture, mechanical design and technology integration, thermo and acoustic testing. Basic requirements: candidates should have strong engineering and programming (for example, C, VHDL, Verilog), design, test, and communication skills. Team-based experience in DSP, circuit/logic design, power systems, verification, analysis or testing is a plus. Candidates with at least 6 months of team-based working experience with our product set are preferred.

    ALL APPLICANTS MUST HAVE GRADUATION DATES OF JANUARY 2010 OR LATER.

    If not available, view PDF version.

  • Jobs at IBM (modified version, the original was removed by IBM after the Alliance@IBM alerted the press to this posting.) Full excerpt: Job not found or currently not published.
  • Burlington Free Press: IBM pulls employment ad that appeared to discriminate by age. IBM pulls employment ad that appeared to discriminate by age. By Dan D’Ambrosio. Excerpts: About six weeks after eliminating 419 jobs at its Essex Junction site, IBM is hiring. And you don’t even have to be young.

    IBM’s original advertisement for entry-level development engineers in Albany, N.Y., Essex Junction and Hopewell Junction, N.Y., posted on Aug. 30, included the following requirement: “All applicants must have graduation dates of January 2010 or later.”

    Oops.

    “It was a thoughtless mistake,” IBM Spokesman Doug Shelton said Friday.

    Shelton said the “incorrect” posting would be pulled down and replaced Friday afternoon. The listing was brought to the attention of various Vermont media outlets, including the Burlington Free Press, earlier in the day by Alliance@IBM, an employee group.

    The listing also came to the attention Friday of the Civil Rights Unit of the Vermont Attorney General’s Office. Attorney General Bill Sorrell said IBM’s original ad “certainly raises questions as to whether this was a permissible job-related limitation.”

    Selected reader comments follow:

    • The AG's Office should look hard - hard - at the actual date of graduation of anyone "hired" under this deal.

      This is one of those, "I mean, c'mon," situations. Obviously the slimeballs at IBM are culling expensive older employees and replacing them with wet-noses. I'm not 100% sure I have a problem with that - but let's at least not call it a "mistake" or go "oops."

      And it's all Kabuki anyhow. The IBM plant is gone city. Anybody dumb enough to take a job there is going to be in an unemployment line in two years.

  • WPTZ-TV (Burlington, VT): IBM takes down ad after potential age discrimination. Wording on job posting could have warranted investigation. By Vanessa Misciagna. Excerpt: "Unbelievable that they would do this, especially after firing 419 people," said IBM employee and workers union member, Earl Mongeon.

    Mongeon was just as fired up Friday as he was when IBM announced major layoffs earlier this summer. A job posting that went up Aug 30 on Big Blue's website had the workers' rights advocate had him seeing red.

    The ad had stated in all capital letters that "all applicants must have graduations dates of January 2010 or later."

    The posting had a local labor attorney shaking his head. "The thrust of our law, both federal and state, is to see to it that older workers are not discriminated against," said Burlington attorney, Richard Cassidy.

  • Alliance@IBM Job Cut Reports comments:
    • Comment 09/05/13: The IBM help desk is reporting a major issue that has increased call volume above capacity. How is that furlough working out? -Anonymous-
    • Comment 09/05/13: IBM Burlington posting jobs for engineers with graduation dates 2010 or later. Nice. I'm sure they let a seasoned vet go only to replace with a lower salary. -fool_me_once-
    • Comment 09/06/13: Posting jobs for engineers with graduation dates 2010 or later. Truth or consequences; fact or fiction? Answer me this: Does IBM (RE)TRAIN anyone anymore they employ? IBM Employee Education and Management Education (at the MDC) continuing career education used to be a cornerstone of the philosophy of IBM. Now it is RA the experience and hire the neophyte. IBM's motto used to be THINK. Now it is REACT or $AVE? -Pravda?-
    • Comment 09/06/13: I was RA'd 7/12, but am in the process of getting an offer (from a slightly different division); does anyone have experience with bridging one's service upon returning to IBM -Recent-
    • Comment 09/06/13: "I was RA'd 7/12, but am in the process of getting an offer (from a slightly different division); does anyone have experience with bridging one's service upon returning to IBM -Recent-" Until you have signed the paperwork and management has given you the separation check, your employment is intact. I was RAed twice, and both times managed to obtain a new job in different divisions. My service was continuous and was not effected as far as time, or benefits. Good luck. -Ich Bin Muede-
    • Comment 09/06/13: Dear -Recent-: Please explain why you think re-entering the lions' den will save you from being a meal for the next hit? Another division; how did you remove yourself from the blacklist? Is it really worth the medical issues that will come from another stab in the back? -WhyThere-
    • Comment 09/06/13: Since my loyality to IBM is gone, so is my work ethic. I do not turn my computer on until 8:30 am which means I cannot participate in Think Fridays which start at 8 am. Ginni, you need to schedule Think Fridays to accomodate those of us who will not work any extra hours for IBM since the resultant rewards only go to a select few. -Anonymous-
    • Comment 09/06/13: The first "Think Friday" presentation is this morning, the subject is Cloud computing. Guess what, the web site for the presentation is not responding! -Anon-
    • Comment 09/06/13: Re: Web site non response during Ginni's 'Cloud Computing' "Think Friday" this AM. Jeff Bezos should be LHAO (laughing his ass off) holding it up to the CIA during the contract battle. "See, IBM can't even deliver services to its own employees!" -Anonymous-
    • Comment 09/07/13: RA'd in June in Poughkeepsie, NY. My last day is this Tuesday. Good luck to everyone left behind. How ironic that the contractor I hired back in November of this year to 'help me' with all the work gets to stay, but I am the one to go. Now the contractor is complaining that there is too much for her to do alone and she is going to talk to the manager about it. LOL. She better be careful or they will get an off-shore resource to 'help her' with the work and she will be gone. -dun-4-
    • Comment 09/07/13: I recently left IBM voluntarily after being there for 25+ years. I didn't get a package (surprising to many); I just wanted to move on to an environment that wasn't so toxic. While at IBM, I saw my benefits eroded to nearly nothing, averaged less than 1% pay increases for the last 10 years, and basically felt that my job existed at the will of some lottery in the sky. So I started at the beginning of this year getting ready and looking for something that I would love doing. It was scary leaving, but I figured I had nothing to lose. Sure, a package would have been nice, but it took me 6 months to find a job, so I didn't see it as a real loss. I and now with a company that values its employees, and provides benefits like IBM did 20 years ago...and oh yeah, more pay to boot. Stop waiting for your number to come up in an RA and move on to a company that values you! -RecentlyDeparted-
  • Extend Health: New Approach to Retiree Health Care Coverage (PowerPoint in PDF format). IBM selects Extend Health. Covered topics include: Who We Are; Transitions Can Be a Good Thing; IBM chose Extend Health — For Your Benefit; A Deeper Dive – Benefit Advisors, Medicare Exchange, Optimize Savings, Health Reimbursement For You; Next Steps; Questions & Answers. Note: If the above link does not work, view saved copy on ibmemployee.com server.
  • Binghamton Press & Sun-Bulletin: Guest Viewpoint: IBM retirees' health care options are changing. By Karen Sweet-O’Neill. Excerpts: In a recent mailing to their retirees, IBM announced that they are partnering with Extend Health, the country's largest private Medicare exchange. Why are they doing this? IBM's claim is that the rising costs of health care in the current group coverage program is no longer sustainable for the retiree or the company.

    The spin from IBM on this change is that it will provide retirees with more options at affordable premiums. For those retirees who are currently eligible for subsidized IBM coverage, IBM will contribute annually to a health reimbursement arrangement. The HRA is a tax-free account to help pay premiums and eligible out-of-pocket health care expenses.

    It is very important to note that in order for retirees to be reimbursed by the HRA, they must choose a health care plan through Extend Health. The amount of the retiree's personal HRA contribution will be disclosed to them in early October.

  • Yahoo! IBM Pension and Retirement Issues message board: "Alternate site for listing of medicare supplement plans" by "redrock". Full excerpt: I found that this site to be useful to view supplement plans for my zip code. There were more plans listed here than on the EH site (profiled as an individual viewing 2013 plans.) These additional plans were provided by company names I did not recognize. Like the EH site, you can change your birth date to get a sense of how the rates change with age in 2013 dollars.

    I found that the easiest way to use both of these sites was to use Chrome's incognito window so as it starts with zero cookies and at least for the EH site, does not remember you are profiled as IBM.

    Example findings: (monthly premiums):
    MS plan F HD at age 66 - $45 (Blue Cross) standard plan
    MS plan F 0 Ded age 66 - $137 (Blue Cross) standard plan
    MS plan F HD at age 86 - $82 (Blue Cross) standard plan
    MS plan F 0 Ded age 86 - $251 (Blue Cross) standard plan

  • Yahoo! IBM Pension and Retirement Issues message board: "Maybe step back on Health Insurance plans" by "lastdino". Excerpt: We all seem to be fishing for the elusive Health Insurance plan but seem to be speculating the outcome. Maybe we should step back and let the dust settle. It seems the package just wet our curiosity about EH and it's offerings. Some of the posts have been informative but lack the details of the offerings that IBM/EH will be presenting. The video and package tactic got us all up in arms and once again are full of promises. Call and schedule your telcons and have your info available. There is nothing we can do until EH unveils the plans that will be offered to us. Until then we are just guessing.
  • Yahoo! IBM Pension and Retirement Issues message board: "ibm subsidy and non-medicare eligible dependent" by "johnsonsue". Full excerpt: I am concerned about the way the way the costs for non-medicare dependents will be handled. I currently have the IBM Medical Supplement with 1 non-medicare dependent which costs $0 for me and $25 for my dependent. Obviously the IBM subsidy which I assume is the $3,000 helps a lot in keeping down that cost to $25. Even though the dependent's coverage is not going through Extend Health, I would assume the cost will rise considerably, and the HRA account can't be used for that cost, only mine. Or, do you think they will reduce the subsidy for me and retain some of it for the cost of the dependent's cost? Does anyone have any ideas or thoughts on this?
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: ibm subsidy and non-medicare eligible dependent" by "harris_berman". Full excerpt: The announcement letter states that under age 65 and not yet Medicare-eligible will not be able to elect coverage through Extend Health. Your subsidy will be managed by EH ($3000), but there's no indication of any split of subsidy for your dependent. A separate IBM enrollment kit will be sent later this year. There were statements last year that premiums would have been 25% higher if it weren't for the Federal subsidy that IBM was receiving.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: ibm subsidy and non-medicare eligible dependent" by "tcimini". Full excerpt: This announcement is almost like a rumor in that we need to wait for the other shoe to drop (specific information on the exchanges which will be available, the amount of the subsidy, etc. Very difficult to plan in advance as the good doctor would like us to do. Just one more company and many more people who are exempt from HIPPA to find out about our personal health information.

    Yes, you can keep the same representative. Is it really can or is it must? What if you don't like the person because no one is experienced yet.

    For those on Medicare because of disability, not age, subsidies were significantly larger. Will that continue to be the case since it is only SSD that they are collecting, not a pension?!?

    Do the prescription drug plans go away in favor of only Medicare Part D? We paid hefty premium to upgrade to not have Rx plan max out.

    It seems to just be causing everyone lots of stress since there is little info. They say to go to the website which tells you to come back after 10/1. Sounds like their won't be an indemnity plan tho. UGH

    The non-Medicare eligible spouse has to wait even longer for info since enrollment period is different. Hopefully the same plans will exist so it won't be that much more investigating to do.

    But couples may now find themselves using two different companies in addition to different plans. We need administrative assistants with PhDs in health insurance!!!

    Everyone is spinning their wheels and the only ones making progress (& cash) are IBM, Extend Health & the insurance companies.

    We were all better off with the old indemnity plans before HMOs, then PPOs, etc.

  • Yahoo! IBM Pension and Retirement Issues message board: "Will we know subsidy before we enroll" by "johnsonsue". Full excerpt: Does anyone know if we will know our subsidy before we enroll?
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "harris_berman". Full excerpt: Your subsidy is either $3500 or $3000 depending on when you retired. FHA amounts will be deposited into the HRA and the balance should be what is currently showing in your current account.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "madinpok". Full excerpt: I think you may be jumping to a conclusion that the subsidy will be the full $3000 or $3500. IBM says these numbers are caps and that IBM would never contribute more than this to Medicare retiree health insurance. But they have NEVER said that they reached the caps.

    My comparison of the pre-Medicare premiums for the old plan and FHA plan shows that in almost every case, IBM has been contributing less than the $7000/$7500 amount - often substantially less.

    What I expect is that IBM will set the subsidy to a value that will allow you to buy approximately the same level of insurance for about what you pay in premiums today. And since premiums for Medicare supplemental plans vary from region to region and state to state, IBM might contribute different amounts depending on where you live, and perhaps what you age is.

    All this is speculation on my part, of course. We'll have to wait and see what IBM really does. So I'm just cautioning that no one should expect to get a subsidy of exactly $3000 or $3500.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "chz_whiz". Full excerpt: Agree with you completely, madinpok. They have not said any individual's subsidy would be $3,000 / $3,500. Oh, by the way, let's quit calling this a subsidy; it's a payment or contribution by IBM. "Subsidy" sounds like welfare; I worked for IBM's retiree contribution; it's what they said they'd provide; not a subsidy.

    The $3,000 / $3,500 limit ("on average") IBM now has includes a contribution toward not only medical but also dental and vision, since the premium for Self+Spouse is (much) more than 2x Self Only. "On Average" also allows them a lot of flexibility in how it's applied. Potential income tax credits through the exchanges also offer a lot of grey areas in calculating the expectation that most will get the same or lower cost.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "Joseph". Full excerpt: Do they (Extend Health) give you that advice only verbally, or do they provide a hard copy so you can compare everything at your leisure and in private? You may have an eidetic memory so hearing it from EH is sufficient for you, or you write very fast without developing writer's cramp, but I want to see it and study it, preferably in hard copy, but alternatively in a printer-friendly online format.

    By the way, the "Getting Started" booklet explicitly says the "the Enrollment Guide will *NOT* contain information about the specific plans available to you." It does say that the information on specific plans will be provided during your enrollment call (thanks a lot, but I want some time to think about it and compare plans before enrolling) and that it will be available on their website (will this be generalized information, or will it be tailored to you, and can you study it before your enrollment call?)

    I am surprised that the EH advisors will share specific information with you. Their website says "Plans not yet available for 2014" so I cannot find any specifics on any plans there. It looks like somebody at EH is being dishonest.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "johnsonsue". Full excerpt: I asked an ExtendHealth person this morning when I scheduled my appointment about whether we would know our subsidy before we enroll. She said they will start sending them out October 1st and everyone should get them by the end of October. I scheduled my appointment for Oct 28th, so I would be sure to have it.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "Bob". Full excerpt: You really need to focus on community based plans where age is not a consideration in setting rates only the cost experience of the insurance pool; medical cost inflation is always a consideration in any plan. The Medigap pool starts at 65 and essentially ends at 90 but the median age (50% higher and 50% lover) is more like 75 due to the thinning of the herd approaching 90.

    Therefore as you approach and exceed 75 in such a plan you are grouped with an increasing percentage of younger people and your rate will be lower than issue age based plans; most popular press advice favors community based over issue or attained age based plans.

    One of the new risks to being divorced from IBM medical plans is when you change companies or upgrade within the same you are subject to a health review which can lead to a rejection of your application; that is a risk we never had to face with IBM plans. It really becomes a major factor should you chose to self insure more by taking a high deductible F Medigap plan and then run into a series of bad luck medical problems later.

    When you try to update to a full F Medigap you risk a health review that can be rejected just when you need it most. How many applications in fact are rejected is unknown but it certainly is a possibility to consider when you make your initial decision to pay the extra for a full F or roll the dice with a high deductible one and then have bad medical luck later.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "Bill". Full excerpt: Bob, I think you have nailed the essence of the change, at least in my view.

    As long as IBM maintains its subsidy commitment, I see the exchange as more of a net plus than minus, in the end. Retiree health insurance is not IBM's business - it is not IBM's area of focus or expertise. Insurance *is* the business of these exchanges. This is what they do. They want to grow and be successful. They will find ways to help us make best use of our health care dollars. This is a good thing, not a bad thing. IBM has gone from a company with a paternal interest in the well-being of its employees to, well, we all know what it has become. So, all I want from IBM is the subsidy and to be placed with an exchange that does its job well.

    But...there is a wild card. After a year on the Medigap plans we will now be subject to questions and underwriting if we want to change plans. I don't know what this means, but it can't be good.

    The light at the end of the tunnel is that Obamacare will help us, in the end, because if left as is we Medicare types will be the only ones who will be subject to this type of restrictive underwriting; this is unfair, and will ultimately be fixed. People here talk about it being fixed by 2017, hmm, I don't understand the basis of this claim.

    In the meantime, it is my understanding that some states are friendlier to Medigap insured who want to change. Other than this, I don't have a sense of how tough it is going to be to change plans, of just how healthy we have to be in order to have the type of flexibility we used to have on the old IBM take-yer-pick, no questions asked system. Definitely a risk, at this point.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "Bill". Full excerpt: I have a cheap Part D plan that keeps me in the system. Ditto for my wife.

    I have a friend who decided to drop his Part D drug plan. Both he and his wife.

    His rationale: Pretty much all of the common drugs these days are available as generics, which are very inexpensive at places like Costco, Walmart. Plus, the penalty for not staying in the Part D plans, if you decide to come back, isn't that big. The cutting edge drugs these days—the ones that are likely to break the bank—seem to be more the biologics, which I think would be administered in a office-hospital setting and might go against Medicare A, not D (?).

    I would add to this the following: For expensive drugs that are not available as generics in the U.S. I use a Canada pharmacy, anyway (Cheapo Drugs, great prices, reliable, there are other good ones from which to choose). For example: Aciphex is still a brand-only drug in the U.S. and the manufacturer has jacked the price up to $11 a pill, Costco price. I can get this for fifty cents generic from Cheapo and a buck fifty for the brand.

    There is something else, too. Take the pill terazosen as an example. This is a ten cent pill. At Walgreens it goes against the donut hole calculation as about a fifty cent pill. So, the commonly available, cash street price and the donut hole price are very different. Seems to me that the system is stacking the deck against those folks who are in danger of getting to the donut hole.

    Add to this the fact that most of the cheapie Part D plans have deductibles, say, $300 or so.

    If I put all of this together, I'm not too sure how much value I am getting out of the Part D plans that my wife and I currently have. For the first time, I am giving serious consideration to dropping out of the Part D plans and going self-insured. It isn't that much of a penalty to get back in, if I need to. If I encounter a situation where I have to take a very expensive drug, there is Canada, where the expensive drugs are reasonably priced. (If I'm not mistaken, Canadians pay cash for their drugs. Hence the government there makes sure that their medicines are affordable. I could be wrong on this point...).

    What I am suggesting is that it might be time to re-think the economics of the Part D plans. These plans were a boon to Medicare beneficiaries when they came out. But, in a world of cheap generics in the U.S. and (relatively) cheap branded drugs from Canada, I'm not sure just how much value these Part D drug plans represent, for many of us.

    A final, and somewhat unrelated, point: there seems to be some sort of tacit agreement between the FDA and Canada pharmacies on re-importation. Earlier this year I went to order a refill for Aciphex generic. The supplier of this generic was an Indian company. Cheapo told me that I couldn't order that Indian generic anymore. I was disappointed, as I was taking a "good" Indian generic. I wound up with a Canadian generic that works just about as well.

    The point is, I asked them why the change. Turns out that they say that they have an agreement of some sort with the FDA that they won't get hassled by Customs and the like if they avoid certain generic sources. And, they also now require the original of the prescription for all refills: In other words, you can get the first fill of a script with a fax'd copy, but all refills have to be done from the original, which you send up to them. I think that this is also part of their claimed agreement with the FDA.

    I took this as a positive re. the FDA, if it is indeed true: The FDA wants safe drugs for us, they understand that re-importation is going on in spite of U.S. laws, they are trying to do common sense things to help make us safer. If true, this is a somewhat different picture than a government in bed with drug companies, conspiring to keep Americans away from reasonably priced medicines.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "harris_berman". Full excerpt: The "donut hole" will be phased out in 2020 according to the ACA. The gap will gradually be closing every year until that time when it will be eliminated.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by Bob Sutton. Full excerpt: I completely agree with your analysis about a rethink of Plan D especially the use of Canadian drug companies for expensive drugs which is perfectly legal for personal use. The only disadvantage I encountered using them is they usually drop ship from the supplying country which in my case was Germany not India and it took several weeks to arrive so you need to plan ahead for the refill more than using Plan D.

    If Medicare actually negotiated pharmaceutical prices with big pharma we all could save a lot of money; its a shame we have to go offshore to get those same savings but it again shows the power of lobbyists and our system which favors them over the populace which put them in office. Ee really have the best government money can buy.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "harris_berman". Full excerpt: According to BCBSNC, changing from the Medigap High-Deductible plan F to regular Medigap plan F can be performed at any time during the calendar year. Once you are using the Medicare supplement plans (any of them), you will not have to go through additional underwriting review. Switching from a Medicare Advantage plan to a Medicare Supplement plan, however, will always result in a need for an underwriting review. That's why the use of the Advantage plans can create issues when a person gets older and they desire to change back to regular Medicare.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "Bill". Full excerpt: Yes, we know that IBM is no longer looking out for the employee, as it was during our best years. It is an unfortunate fact of life.

    This does not mean that IBM will back off it commitment, as you and others speculate over.

    IBM has backed off its commitments to active employees by changing things like full employment policy (yes, I remember), pension plan, whatnot. However, IBM has never backed off its commitment to retiree benefits. This is a capped commitment, and always has been. It is incredible to me how some people on this group refuse to recognize this basic fact, how they view any action on the part of IBM to manage to it's capped commitment as a "takeaway". It is a takeaway only in your imagination, if you think it has happened.

    We will not be "tossed into Obamacare", unless the rules change. This is another thing that exists in the imaginations of some. Obamacare does not change the basic Medicare rules. Medicare and Obamacare are different programs for different audiences. It would take further acts of Congress to change the rules, merge the programs.

    I agree with you on the Aetna premiums. I have no explanation for how we have been getting them at this price. Clearly, the market for these Medigap policies is higher than what our premiums on the Aetna integration plans suggest. And we can be pretty sure that the new IBM hasn't been "over-subsidizing" us. So, it doesn't add up, to me, how this has been working so well.

    You don't have to buy your Part D plan through the exchange. Buy it for $18.50 from wherever you are buying it now, if that's what is best for you. The only reason I can why you would want to buy it from the exchange would be if you expect there to be money left over in your HSA after you have purchased your Medigap policy. Fat chance, no? :)

    You may not agree with me, but I am basing what I say on documented facts, as I understand them. You are speculating, and I don't think that speculation is productive in light of IBM having fulfilled its commitment to me in the past.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "alwaysontheroad4bigblue". Full excerpt: > However, IBM has never backed off its commitment to retiree benefits.

    Um, speak for yourself. Maybe they haven't backed off on their commitment to existing retirees, but the Future Health Account introduction was definitely backing off on what I heard from my managers in the 70's and 80's about fully-paid retiree medical coverage. In fact, before the FHA, imposing annual subsidy caps of $7,500/$7,000 (for pre-Medicare retirees), $3,500/$3,000 (for Medicare retirees), is what I consider "backing off on its commitment to retiree benefits.

    And, beyond the FHA, more recent retirees get *absolutely nothing*, not even the FHA.

    The one thing IBM has done well, though, is to dramatically increase the compensation of its senior executives!

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Will we know subsidy before we enroll" by "lastdino1". Full excerpt: Sorry, Bill, but I don't agree with you or Bob. We all know through past history that IBM is not out for the employee. You had always needed to make sure you planned for your future because they could pull the rug out anytime that they wanted. To believe this will benefit our group is in my opinion naive.

    I look at this as the 1st phase which will eventually toss all groups into ObamaCare. I would predict in maybe 3-5 years the subsidy will be ended and this group will fend for themselves. Keep an eye on the pre-Medicare retirees and see what develops there in the next few years.

    But back to us the proof will be when we look behind the curtain and see the plans offered and the cost of them. We'll need to see an example of how Extend Health offers plans equal to or better then the ones we currently have but for no or minimal cost increase.

    Lets see we pay $57 a month for self +1 for the Aetna TC INT. Plan A and $51 a month self+1 for Cigna dental. On top of that we have Humana/Walmart drug plan for $18.50 each per month. I will ask EH to give us a similar plan at a similar cost and what do you think they'll suggest? The answer is behind the magic curtain and we'll find out next month.

  • Yahoo! IBM Pension and Retirement Issues message board: "Are benefits advisors paid a commission based on what plan you choose?" by "texbiged". Full excerpt: The Extend Health newsletter states regarding benefit advisors, "Their compensation is unrelated to the type of plan or insurance company you choose."

    But when I made my appointment for the enrollment phone call, the following message popped up on my screen. "By accepting, you agree to discuss with a licensed benefits advisor the specific product types you initialed above. You will be talking to a licensed agent contracted by a Medicare health plan or prescription drug plan that is not the Federal government, and who may be compensated based upon your enrollment in a plan."

    If they're being compensated base on which plan I choose, their motivation is to sign me up for whichever plan pays them the best compensation.

  • Yahoo! IBM Pension and Retirement Issues message board: "RE: What is a 'licensed benefits advisor?'" by "weiner_beat_it". Full excerpt: Today, a rep confirmed on the phone that the "benefit advisers" are not on commission and have no sales incentives, etc. I did not ask to get it in writing. I assume he was speaking for Extend Insurance Services, which soon emailed me a confirmation of Extend Health Appointment Confirmation. He confirmed HRA amounts will get mailed out in Oct., prior to my requested Nov. phone call date.

    (Extend Insurance Services, LLC is a wholly owned subsidiary of Extend Health, Inc. Extend Insurance Services, LLC is a Utah resident insurance agency and licensed as a non-resident insurance agency in all states and the District of Columbia.)

  • Yahoo! IBM Pension and Retirement Issues message board: "Where to buy health insurance in California?" by "metoolikeyou". Full excerpt: My IBM Cobra health insurance will end in two months. Although I can still buy from IBM using FHA money, the premium for me and my wife is very high (I am just over 60). I am considering buying insurance from others but do not know where to begin with in CA. Would really appreciate information anyone can share. One possibility is to buy Obamacare for the next year.
  • Yahoo! IBM Pension and Retirement Issues message board: "RE: Where to buy health insurance in California?" by "madinpok". Full excerpt: If you google "california individual health insurance" you'll come up with a number of places to start your search. Also, take a look at ehealthinsurance.com In 2014, the health insurance exchanges being set up for Obamacare will probably be your best bet for obtaining insurance if you don't want to use the FHA plan from IBM. But make sure you do not have ANY gap in coverage between the end of your COBRA insurance and whatever you sign up for next, otherwise you will NEVER be able to get back into the FHA plan should you want or need to. You must have continuous coverage from plan(s) that are considered "creditable coverage" to be able to enroll in the FHA plan.

    Although the FHA plans are expensive, you might not be able to find anything that is cheaper. Also, you are allowed to change the plan you select when enrolling in the FHA, and switch from say, the Low Deductible Plan under COBRA to the high deductible plan with the FHA. That might help you stretch things a bit. Let us know if you are able to find something that costs less than the FHA plans! Others might find it helpful, too.

  • Yahoo! IBM Pension and Retirement Issues message board: "RE: Where to buy health insurance in California?" by "alwaysontheroad4bigblue". Full excerpt: My COBRA ends on September 30th. (I had 12 months of RA-subsidized COBRA followed by six months that I paid for in full.) I plan to use FHA money to buy insurance through IBM through the end of this year. I'll then take a look at the ACA health care exchange plans for 2014. The ACA subsidies are substantial for low and moderate income families. (I am such a family, trying to get by on just my IBM pension.) See http://kff.org/interactive/subsidy-calculator/ for an idea of what your subsidy might be.
  • Yahoo! IBM Pension and Retirement Issues message board: "RE: Where to buy health insurance in California?" by "metoolikeyou". Full excerpt: I am in similar situation. I am not Medicare eligible yet. Lots of people are talking about HRA here. But I guess that is only for Medicare eligible ibm retirees since I have not received anything from IBM. I definitely will look into Obamacare in the coming October and perhaps use IBM FHA money to pay for it assuming IBM will allow me to.
  • Yahoo! IBM Pension and Retirement Issues message board: "ExtendHealth Enrollment" by "chz_whiz". Full excerpt: "Call duration varies, but most calls average slightly more than an hour for each individual. If you and your spouse are both enrolling in new coverage, your call can take two hours or more." TWO HOURS OR MORE!!!
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Changes Medicare-Eligible Retiree Health Care Coverage as of" by "Jim". Full excerpt: I input all our info online and am now "registered". I also scheduled a call for 10/2. I'm assuming that since I have supplied the info the call will not be as long, but then these days you have to spend a lot of time identifying yourself and proving it.

    We are under the very old pension and health plan so it will be interesting to see how much the "subsidy" is. Probably should have waited until they get a little experience.

    We have a Part D plan that has been satisfactory and assume that it will still be available. IBM didn't help us with that. The biggie is what will replace the Aetna supplement that has cost us $17 a month and paid wonderfully well. Sure hate to see it go.

    Also wonder whether this plan qualifies to keep us from paying a penalty for a new Medigap. We did have dental with Metlife thru IBM.

  • Yahoo! IBM Pension and Retirement Issues message board: "Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "alwaysontheroad4bigblue". Full excerpt: There has been a lot of discussion lately about the changes to the IBM Retiree Medical plan (i.e. Extend Health) for retirees that were not affected by the 1999 pension and retiree medical theft by IBM. There has been little, if anything, on what will happen to those of us on the new plan. Instead of annual subsidy (of $3,000 or $3,500) that earlier retirees receive, we get a one-time notional account from IBM that we can then use to buy insurance from IBM (and only from IBM, unless something changes.) IBM funded this account to a max of $40,000 providing you had at least ten years of service.

    I was RA'd in March 2012. As such, I received 12 months of IBM-subsidized COBRA coverage followed by six months that I paid in full on my own. The payments for the IBM High-Deductible PPO with HSA were $788.11 per month for my wife and me. (With this plan, I've paid in full for all prescriptions and medical appointments (except for preventative care) this year. With this plan, I am responsible for the first $4500 of costs in full.) The HSA made sense when I was employed, but not so much after retiring. Unfortunately, while on COBRA it was not possible to switch plans.

    My COBRA coverage ends at the end of September so I called the (Fidelity-run) IBM Employee Services Center. As always, the person I talked to was very helpful. Here are the monthly rates offered for my wife and me:

    • IBM Low-Deductible PPO: $1825
    • IBM Medium-Deductible PPO: $1338
    • IBM High-Deductible PPO: $1116
    • IBM Exclusive Provider Organization: $1,536
    • Kaiser: $1060
    • IBM Dental Basic: $57.46
    • IBM Dental Plus: $73.22
    • Cigna Dental: $64.50 Vision: $13.48

    I elected to go with the Medium-Deductible PPO, Dental Plus, and the vision plan, for a total of $1424 per month. That's for October, November, and December of this year. After that, I'll have to look at the coverage available through IBM and through the ACA exchanges. Again, I have no idea what IBM's plans are for we "new plan" retirees...time will tell.

    I chose to fund the rest of this year's premiums in full using my FHA. If I were to continue doing so, and if rates do not increase, my FHA will be exhausted 28 months from now!

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "trexibmer". Full excerpt: Say nothing; know nothing and IBM will screw you every time, especially when it comes to retiree health benefits and FHA.

    IBM can not care less if you gave them 15, 20, 25, 30, 35, 40 years of loyal, dedicated, healthy service. Once you don't work for them, seriously, they don't care if you get sick and depart or even form your bucket list: you were once (ahem) a billable resource; now you're a liability to their profits.

    It's now all IBM executive greed and the almighty EPS that rules supreme.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "madinpok". Full excerpt: The Extend Health changes are for retirees who are on Medicare, no matter whether they are covered by the old health insurance plan that receives the $3000/$3500 or the FHA plan.

    If you are on the Medicare and covered under the FHA plan, IBM will transfer the balance of your FHA account to the new HRA account. If you are an FHA retiree, the money in your HRA account will carry over from one year to the next. But if you are on the old medical plan, any unused funds from IBM's annual contribution to the HRA account will be reset to zero at the end of the year.

    If you are not yet on Medicare, then then everything will remain as it currently is (at least until IBM drops the other shoe and tells us that they are changing that, too).

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "netmouser". Full excerpt: Many have voiced concern the FHA account runs out fairly quickly. Many of us never got even that, many like myself because even though we had earned the 10 years of credits, we did not have the 15 years of service required to get access to the credits we had earned. Gr-r-r.

    I understood that FHA was intended to be brief with a goal to help get people to Medicare. For many it is not adequate for that. But is was never close to the life time subsidy as those on older pension plans got.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "metoolikeyou". Full excerpt: I also plan to use FHA to cover Oct. Nov, and Dec of this year. Will take a look at Obamacare to see if I should buy next yr health insurance from exchange out of my pocket or continue with IBM group plans with FHA money. My understanding is we can not use FHA money to pay for anything outside IBM because FHA is only virtual money, not real money.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "madinpok". Full excerpt: > I also plan to use FHA to cover Oct. Nov, and Dec of this year. Will take a look at Obamacare to see if I should buy next year's health insurance from exchange out of my pocket or continue with IBM group plans with FHA money. My understanding is we can not use FHA money to pay for anything outside IBM because FHA is only virtual money, not real money.

    I think that is a good plan. You may want to continue using the FHA money next year even if a plan on the Obama exchange is cheaper, since the FHA money is "free" money for now and who knows if IBM might decide to take it away at some point. My hope would be that since IBM is setting a precedent with the Medicare retirees by moving the FHA money to the HRA accounts, they would do the same if they ever decide to move the non-Medicare retirees to using exchanges as well.

    IF that were to happen and IF the exchange plans turn out to be less expensive, then your FHA dollars might go further. But those are two big IFs. I would tend to lean towards spending the FHA dollars sooner rather than later and take advantage of a known quantity rather than gambling on what might happen in the future. But that's just my opinion.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "teamb562". Full excerpt: I agree with Mad. If IBM is dumping Medicare retirees, why should they hold onto non-Medicare folks. It would make sense they follow the same/similar path and move our non-M edicare FHA blue dollars into an HRA to spend on public exchange plans. Would be real sweet if in addition to using the FHA/HRA dollars, if we could also get the subsidy, assuming you meet the income limits.

    I am in a similar boat to recent posters. I just started retiree health are(after 18 months Cobra) and am using FHA 100% for Sept - Dec on the EPO. Will decide later this year how to navigate 2014 but I tend to agree with the Mad; with IBM seemingly struggling to make their asinine 2015 numbers, there is no time like the present to crank the dial to full volume and burn that FHA baby down.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "kyrosl". Full excerpt: Since premiums for IBM retirees are the same regardless of age, shouldn't premiums for non-Medicare retirees drop now that the retiree group will only include pre-Medicare retirees?

    Perhaps IBM can actually make money from the non-Medicare retirees by keeping their premiums the same as 2013. My intention is to look at the Obamacare exchange in Florida before signing up again with the IBM retiree plan. Obamacare premiums are not yet available for Florida, where I am a pre-Medicare retiree -- with no IBM subsidies.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "kyrosl". Full excerpt: "Since premiums for IBM retirees are the same regardless of age, shouldn't premiums for non-Medicare retirees drop now that the retiree group will only include pre-Medicare retirees?"

    I don't believe your assumption is correct that premiums for IBM retirees are the same regardless of age. Today, there are at least two IBM retiree medical insurance pools, pre-Medicare and Medicare. Currently, the IBM theoretical voucher/subsidy drops by $4000 when you turn age 65.

    We can always hope you will be pleasantly surprised, but I wouldn't hold your breath waiting for premiums to drop for IBM pre-Medicare retirees.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "redrock_5432". Full excerpt: Pre-Medicare and Medicare retirees were 2 distinct risk pools with different plans and premiums. One big difference is that Medicare was primary insurance for Medicare retirees, whereas IBM plans were primary for pre-Medicare retirees. The variables are the plans, the presence of Medicare, the subsidies, health of pool, and the premiums. Lots of moving parts. Hard to say if moving Medicare retirees to exchange will have any effect on non-Medicare retiree premiums.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "Roy". Full excerpt: Under the current IBM system. there are three sets of plans. You may start in the plan where no one is Medicare eligible. As one person in your family becomes Medicare eligible, you have to change plans. You change plans again when everyone in your family is Medicare eligible. I had to go through both changes this year as I turned 65 and my wife change in two months.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "trexibmer". Full excerpt: At one time in history IBM made change work for the benefit of those who experienced it. Now any change IBM makes is to the detriment of those who must experience the change.

    IBM Retiree Healthcare Benefit roadmap:

    • Destination #1: was the Medicare Retiree Medical plan (ex)change.
    • Destination #2: the Future Health Account (FHA) will either see reduced notional account balances using their FHA or it will end or terminate for those using or eligible for it.

    LIFE IS NOT GOOD for IBMers retiree health maintenance during their golden years.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pre-Medicare Retiree IBM Rates for Future Health Account Participants" by "Bill". Full excerpt: > At one time in history IBM made change work for the benefit of those who experienced it. Now any change IBM makes is to the detriment of those who must experience the change. This is cynical speculation on your part.

    IBM's financial commitment to retiree benefits has been capped for as long as I can remember. The only thing has as been uncapped is the cynicism of retirees who refuse to understand this basic fact.

    The cap for most of us is $3500/3000. This is the commitment, plain and simple. Always has been, still is.

    We will all have a legitimate complaint if/when IBM reneges on its commitment. Not before.

    IBM has never committed to be the ongoing administrator of the plan, or that managing of our health care in the bizarre U.S. health care industry was going to be a no-brainer. However, I think that we all understand that IBM has a responsibility to place administration of the plan in competent hands. This exchange seems to be competent, as near as we can tell.

    It seems to me that the productive thing to do is try to understand what these changes will mean to each of us, and hope that when October comes we will find that our HSA balances reflect a continuation of IBM's commitment.

  • Yahoo! IBM Pension and Retirement Issues message board: "IBM WILL MOVE RETIREES OFF COMPANY-SPONSORED HEALTH PLAN" by "finitewisdom". Full excerpt: From http://www.breitbart.com/Big-Government/2013/09/06/IBM-Will-Move-Retirees-Off-Company-Sponsored-Health-Plan. Excerpts:
    "IBM has announced that it plans to move about 110,000 retirees off its company health insurance plan and offer a payment to purchase coverage on a private health insurance exchange instead."

    "According to the WSJ, the decision will affect all IBM retirees once they become eligible for Medicare and will relieve the company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care has made its current system of keeping retirees on its company health care insurance unsustainable without large increases in premiums."

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM WILL MOVE RETIREES OFF COMPANY-SPONSORED HEALTH PLAN" by "ibmexe". Full excerpt: I have seen the 110,000 Medicare eligible retirees number before in several other news publications including PBS News hour and my local paper. This number most likely counts only actual retirees but not their Medicare eligible dependents. It must also include all "First and Second Choicers" Medicare retirees.

    Now the second choicers all represent a defined cost to IBM consisting of their remaining FHA balance. All others also represent a defined cost to IBM due to the $3-3.5K subsidy cap per retiree. Since the FHA plan is evidently a less costly proposition than the cap for Medicare eligible folk and those with only a $3K cap undoubtable greatly outnumber those with a $3.5K cap, I am inclined to believe that an extremely generous estimate of IBM's previous commitment to Medicare eligible retirees is NO MORE than 110,000*$3K or $3,300,000,000/year....and probably more like $2B /year or less.

    Furthermore it seems to me that that commitment is unlikely to grow, since IBM's commitment to second choicers is "age independent" and likely to have been depleted substantially for those retiring in their mid to late 50's. This depletion will more than offset any additional 2nd choicers who have not yet retired.

    The pool of those with the subsidy is extremely unlikely to grow. There simply cannot be too many U.S. employees left who in 1999 were within 5 years of retirement eligiblity who have not already retired. (If you were 50 years old you qualified, but will be 65 years old in 2014...so only those that in that category who have not yet retired can be added; similarily if you had 25 years service in 1999 and have not yet retired, you would have 40 years service now, and if you were among the youngest of those fortunate folks, you would be in an age group of 63 years +/- 3years. So there simply can't be too many of those either. The net for this pool is that it will SHRINK at a 5% to 9% rate per year in accordance with joint mortality rates. Ten years from now, there won't be more than 50,000 retirees/spouses in this pool. FHA will be completely exhausted and IBM's commitment will be 50% at most of what it is now.

    So what's the problem for IBM? Undoubtably at some point in time in the future, the pool will be so small that it is very likely that Group Rates that IBM can obtain from Insurance vendors will not be competitive with those available on an individual basis. What that means is that the remaining retirees in the pool will realize that they can obtain equivalent coverage cheaper if they opt out of IBM's plans (as many of us have already done for Medicare Part D prescription coverage versus IBM's prescription supplement plans) and buy them on the open market.

    My net from these considerations is although the "tipping point year" might not be 2014 (IBM apparently believes it is 2018), I for one agree that offering Extend Health now is a " more reasonable deal" than either waiting a few more years and offering it then or in fact doing nothing other than keep the current plans and letting them attrite naturally once the premiums of the group plans exceed those on the individual maket. That's of course provided that IBM's subsidy cap remains $3K or reasonably close to it. I for one can't see any reason that it wouldn't continue, since the unused money left in the HRA at the end of the year will be forfeited. That is equivalent to keeping the cap.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Current (2013) IBM contribution" by "Joseph". Excerpts: Of course, one way they tailor their advice is by selectively telling you about some of the available plans, and hiding the information for most of the plans. Do you have any evidence that EH is doing this? Or are you just making stuff up?

    They have promised many times and in many ways that they will not give us detailed and personalized comparison infomation on all of the available plans. Doyou believe that they will verbally tell you everything during your enrollment call, or only the information that they have decided is relevant?

    From the top of page 15 of the "Getting Started " booklet:

    "Unlike the information that may have been provided by your former benefits provider, your 'Enrollment Guide' will not contain information aboujt the specific insurance plans available to you. Information on specific plans is available on our website, or will be provided during your enrollment call."

    Of course, there is no information on any plan currently available on their web site, so this promise is already broken. This is the 21st century, so we are used to this kind of treatment from IBM management.

    At the noon briefing in San Jose, the EH lady said they would not provide the information on all of the availaable plans because it would require truckloads of paper for each person (I would be happy with a 1-2 page summary of each plan, tailored to me, so I could quickly identify the 3-5 "best" plans for me and then do a detailed comparison on my own). She said they would only tell us about the best plans, presumably only verbally, during our enrollment call. The first time you will get that information will be during the call when you will be expected to make your selection, and you will not have had the benefit of studying and comparing the different plans.

  • Yahoo! IBM Pension and Retirement Issues message board: "San Jose EH Briefing" by "jes95135". Full excerpt: Attended the SJ EH Briefing. Not too much real info.
    • EH Benefit Advisors are all salaried. No commissions. EH itself does get commissions from the company issuing the policy
    • Cost of a policy is identical thru EH as buying it independently.
    • Looks like single HRA account $$ will be shared by spouses
    • There's a 63 day guarantee issue period starting 1/1/14 whereby you can move from the IBM group policy to a Medigap or Advantage policy with no health underwriting review.
    • If you change insurance companies after a year, you could be subject to underwriting review. Can't refuse you, but could charge more. If you stay with same company they can't throw you out regardless of health history.
    • If you're in CA and have Kaiser, you can continue with Kaiser under an indiviual policy and receive HRA $$. New folk can not join Kaiser thru EH. (That's a Kaiser decision).
    • Said something about Aetna Integration Policy - sounded like Aetna will allow you to keep the plan you have for 2014 (at what cost???)
    • No rollover of unused dollars in HRA account from year to year. IRS allows this, but IBM made decision not to allow.
    • EH part of Towers & Watson a publically traded company- Symbol TW. 14,000 employees. Represent 85 different health insurance companies.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Current (2013) IBM contribution" by Bob Sutton. Excerpts: Joe, you can compare 2013 ExtendHealth (EH) plan now. Download the Google Chrome browser https://www.google.com/intl/en/chrome/browser/

    After installed click the following link and then the link for "new incognito window" http://screencast.com/t/3wbd8dG1

    Enter extendhealth.com as your target and then click individual plans http://screencast.com/t/p48xbZCC1a

    Fill out the form for zip, age, etc and you will get a listing of the current 2013 Medigap and Plan C (Medicare Advantage) plans for your zip code

    You can then select any of them for a side by side comparison of the key features.

    Each plan listed sometimes also has a link to very detail plan information too.

    If you have the current (gold stardard) IBM Medicare Integration Plan A/B you need to look at the standardized Medigap Plan F which most closely mirrors that plan or alternately the high deduction Plan F ($2110 deduction) should you or your spouse be in very good health currently.

    For most zips you will find a cost of over $200+ per person/mo for a full Plan F or $32/person/mo for the high deduction version; this compares to $57/mo or $17 for both you and your spouse from IBM currently that ends 12/31/13. Aetna did say that the same individual plan would be available from a few states at full retail cost but mine is not one of them so you probably will see plans from Humana and Anthem in your list. Prices vary by state, age, and company; contact your PCP doctor for advice on the companies he deals with.

    EH will administer the IBM HRA benefit which we are all assuming is close to the current range from $3000-$3500 depending on your entry into retirement to offset these list prices or something like $250/mo. to $299/mo. total but you will pay upfront the full retail price. EH offers two choices of manual submission of payments from the HRA or automatic with details to come in Dec. according to the EH literature so be prepared for a large cash outlay increase with multiple mailings to each company by person.

    The EH adviser will use your profile input (doctors and meds) to insure each potential plan meets your needs but EH makes its money from selling policies even though the adviser may not be commission based themselves so it's the individual's responsibility to do all due diligence on all plans without any hand holding from IBM.

    If you follow the above process you should be well prepared for the first formal meeting with EH with few surprises as to recommendations and costs from them with followups until the sign up window closes. There are about 124k IBM retirees in the US currently with let us assume 60k eligible for Medicare. Many of us believe this is round one; round two will be for the non-Medicare eligible retirees next year and maybe active employees (less then 88k now) after that. We all have been sold to EH by IBM; move on now because knowledge is always power.

  • Yahoo! IBM Pension and Retirement Issues message board: "Current (2013) IBM contribution" by "lefutrell". Full excerpt: If you use Internet Explorer and have IE9 or later, you don't need the Chrome browser . Just open an InPrivate Browsing window (click the gear icon at the upper right, then Safety, then InPrivate Browsing) and use that window to go to the Extend Health web site. Larry.
  • Wall Street Journal: More Employers Overhaul Health Benefits. Some Let Their Workers Pick a Plan From an Online Marketplace. By Anna Wilde Matthews. Excerpts: This fall, tens of thousands of U.S. workers will learn that they're getting their health benefits next year in a radical new way: Their employers will give them a fixed sum of money and let them choose their plan from an online marketplace. ...

    More health-industry players are launching the online employer marketplaces, known as private exchanges, that let employers offer their workers a range of choices to shop from. Companies now jumping in—including benefits-consulting firms like Xerox Corp.'s Buck Consultants, Marsh & McLennan Cos.' Mercer and Towers Watson, as well as insurance brokerages such as Willis Group Holdings PLC and Digital Insurance Inc.—are betting that 2014 will be the start of a ramping up over the next few years. ...

    The private exchanges for employers are separate from the government-operated marketplaces that are being created in each state under the federal health law, which will serve individual consumers and small companies.

    Employers hope the exchanges will trim costs and make their health spending more predictable. But some experts say workers could be squeezed by the fixed-sum approach if the dollars allotted each year don't keep up with the rising cost of coverage. "Is the defined contribution going to increase with premiums, and how much is it going to go up? It is a question," said Paul Fronstin, director of health research at the nonprofit Employee Benefit Research Institute.

  • Yahoo! IBM Pension and Retirement Issues message board: "not sure if I should panic" by "ghstudio". Excerpts: Hard to figure this one out. Currently I have the zero cost, catastrophic high deductible plan from IBM (no cost to my wife of me) and we both have AARP/United Healthcare Medigap policies. It appears that the IBM plan goes away and I now will have only the medigap policy. But, I can buy it through the exchange so whatever IBM is putting in the pot will reduce what I am currently paying. I'm not sure what coverage I actually lose in the new scheme. I have plan F and if they offer plan F, I should be OK (although I thought Plan F was eliminated.)

    Following an earlier posters directions I looked at the 2013 offerings and they actually are offering plan F; so that in itself is confusing. Since the IBM plan is ending, I think (guess/hope) that I won't pay a penalty for joining a medigap plan after age 65...but who knows. Nothing to do but wait at this point.

    I'm pretty sure that my wife will just continue with her medigap outside the plan because I'll use up the small pot of money from IBM.

    There is also no way to even guess at the new dental or vision plans or their cost. I'm hoping they won't change much...although they aren't great plans, they do help a little. Wonder if my wife can continue with the dental plan if she keeps her current medigap outside the exchange.

    Lots of questions; few answers.

  • Yahoo! IBM Pension and Retirement Issues message board: "Alternatives to Extend Health?" by "mwecker". Full excerpt: For medicare-eligible retiree (retired 2002) and medicare-eligible spouse, are there any viable alternatives to the use of Extend Health? If so, will someone summarize the main advantages/disadvantages of using Extend Health? I have read the brochures, but would value an unbiased opinion.
  • Yahoo! IBM Pension and Retirement Issues message board: "RE: Alternatives to Extend Health?" by "lastdino". Excerpt: If you receive a subsidy or have FHA then you need to use extend health to get them. If you don't then it may be cheaper to go to obamacare.
  • Yahoo! IBM Pension and Retirement Issues message board: "RE: Alternatives to Extend Health?" by "netmouser". Excerpt: Dino - Medicare people cannot go to obamacare as an alternative to EH.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: 2014 Medical/Prescription/Actions" By "Joseph". Full excerpt: I believe this is either misleading or incorrect. If the mailed information has a list of options, Extend Health appears to promise to withhold the information needed to do a detailed comparison of the costs and coverage.

    According to the "Getting Started" booklet, after you create your personal profile, "you will receive the 'Enrollment Guide' in the mail, which will help you evaluate your coverage options." It goes on to say "your 'Enrollment Guide' will *NOT* contain information about specific plans available to you. Information on specific plans is available on our website, or will be provided during your enrollment call."

    I do not know how comprehensive the information on the website will be, or whether it will just be generalities without being personalized to your situation. It would seem that any information provided by the Extend Health licensed benefit advisor during the enrollment call must be selected data and could not be comprehensive. I want to see the ones they decide are not "best" for me so I can agree or disagree with their judgement, and I want to be able to do a detailed comparison of the 2-5 "best" options without the pressure of responding immediately while I am on the phone and relying only on my memory and hadwritten notes.

    Although the IBM booklet says that the licensed benefit advisor's "compensation is unrelated to the type of plan or insurance company you choose", the disclaimer on the Extend Health website says "By accepting, you agree to discuss with a licensed benefits advisor the specific product types you initialed above. You will be talking to a licensed agent contracted by a Medicare health plan or prescription drug plan that is not the Federal government, and who may be compensated based upon your enrollment in a plan." Even though I trust that the licensed benefit advisor will care more about my choice of a health care plan than about his/her compensation, I want to be able to verify that.

  • Yahoo! IBM Retiree Information Exchange message board: "Retiree Health Plan change...will the FHA change next?" by "". Full excerpt: With the upcoming IBM retiree medical health coverage exchange for those existing Medicare eligible retirees one thing is certain as the sun rises in the east and sets in the west: Retirees will pay more and get less.

    The next change to come no doubt will be that IBMers who receive or are eligible for the Future Health Account (FHA) will either see the notional funds decreased or just see the FHA end or be summarily terminated altogether.

    LIFE IS NOT GOOD for those IBMers who are not as healthy for their golden years and more so with this latest retirement medical (ex)change.

  • Wall Street Journal: Changing Health Benefits: What People Need to Know. Retirees Will Have to Take Note of How the New Marketplace Affects Them. By Kelley Greene. Excerpts: Don't most companies provide retirees with health coverage? No. Only 28% of firms with 200 or more workers that provide their workers with health coverage extended the health benefits to retirees this year. That number has dropped from 66% of employers 25 years ago, according to the Kaiser Family Foundation and the Health Research & Educational Trust, two nonprofit groups that survey employee health benefits.

    How will the Affordable Care Act affect retiree health benefits? The act mainly affects health coverage for retirees who don't yet qualify for Medicare. Companies may legally be allowed to terminate their coverage for early retirees and provide a subsidy, or voucher, for them to buy their own coverage through a public health-insurance exchange, with enrollment starting Oct. 1 and coverage starting Jan. 1, 2014.

    What about retirees who do qualify for Medicare? For early retirees lucky enough to have employer health coverage, that could be good or bad news, depending on how generous their employer's plan has been. And instead of having an employer do the legwork, they will have to start doing the same research for health coverage as for other big-ticket purchases.

    For those who have not had any workplace coverage, "it's the first time affordable, comprehensive insurance will be available," says Joe Baker, president of the Medicare Rights Center, a New York nonprofit group. "We get a lot of calls from folks who are in their 50s to early 60s who have been downsized, and health care is one of their biggest problems. This is a population that is really going to benefit from the new exchanges." ...

    What else do retirees need to know? Medicare advocates worry that Medicare recipients are going to confuse the open enrollment period for the new "Health Insurance Marketplace" created by the Affordable Care Act, which starts Oct. 1, with open enrollment for Medicare, which runs from Oct. 15 through Dec. 7. If you already have Medicare coverage, you cannot enroll in a so-called qualified health plan for individual coverage. And people who qualify for Medicare cannot receive any help to pay for qualified-health-plan premiums.

  • The Register: Lenovo chief Yang wangs hefty bonus wodge to workers. 10,000 employees at world's biggest PC maker to benefit from payout. By Jasper Hamill. Excerpts: Yang Yuanqing, CEO of the world's largest PC maker, Lenovo, plans to share a portion of his whacking great bonus with staffers for the second year in a row following bumper sales figures.

    A pool of 10,000 workers out of the firm's more than 30,000 employees will each be given a piece of the $3.25m portion of Yuanqing's bonus, according to a memo written by Gina Qiao, senior vice president of human resources.

    "Employees who receive the bonus are mostly those in manufacturing paid on an hourly basis, who are not eligible for other bonus programs or sales commission," said the company in a canned statement.

    “This payment is personally funded by Yuanqing,” Qiao said. “He believes that he has the responsibility as an owner of the company, and the opportunity as our leader, to ensure all of our employees understand the impact they have on building Lenovo.”

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM...Absolutely the worse place on earth to work” Senior Manager (Former Employee). I worked at IBM full-time for more than 10 years. Pros: - Like any company, there are a lot of great people. Many are very hard working and loyal employees. - Some areas have a lot of flexibility. This can change drastically with a change in management (usually a Director level).

      Cons: Too many cons to name:

      • Hiring people in April...laying people off in June...furloughing many in Aug/Sept. This makes no sense.
      • Too many people being promoted to leadership positions they are not prepared for. It is usually for reasons that have nothing to do with ability or effort
      • You can work your tail off for many years and never get recognized for it.
      • Salary ranges are a farce. Once you get to the midpoint, increases will cease.
      • Performance measurement system makes 75% of employees low performers who are not eligible for salary increases (and likely to be laid off)
      • Moving between divisions is near impossible. The budget and finance people put up barriers to severely restrict movement into a division.
      • There is ANSOLUTELY no loyalty to the employees. An employee can work very hard and remain loyal for years. They will send you packing if they have a bad quarter. The execs are measured on quarterly results.
      • Annual layoffs...year after year. Shifting everything to India and China.

      When I first started, I never thought I would see a day that I would write a review like this. Don't go to work here and don't let your children work here. A once great company is in it's darkest days. Very sad.

      Advice to Senior Management: Wake up. You are so out of touch it is amazing. You are laying large numbers of people off and the following week the CEO has a jam event. The ship is augering into the ground and you can't seem to see it. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Respect for the individual is gone. It's like EDS in the 80s.” Product Marketing Manager (Former Employee), Charlotte, NC. I worked at IBM full-time for more than a year. Pros: Ever changing product and offering environment. Cons: Tyrannical. No career development anymore. Everyone for themselves. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Started out as an amazing company and over the years it became a soul sucking environment” Project Manager (Former Employee). I worked at IBM full-time for more than 10 years. Pros: Flexibility of working remote and flexible hours. Cons: You are not a human, just a number. No, I would not recommend this company to a friend.
    • Slow fat dummy elephant which can no longer dance in China” Consultant Intern (Former Employee), Shanghai (China). I worked at IBM as a contractor for less than a year. Pros: Stable environment and average challenge. Cons: Low efficiency, long waiting time. High barrier communicating with colleagues and always have excuses when asking for help. Cold as in the icy water. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Great Place to Work” Anonymous Employee (Current Employee). Pros: I have great colleagues and I am among some of the best talent in the world. IBM promotes innovation among its employees. It's one of the best technology companies in its industry. Cons: No job security. Many positions are being transferred overseas to India, the Philippines and China.
    • Not that bad to gain your first experience, but then it's better to get out” Financial Analyst (Current Employee), Bratislava (Slovakia). I have been working at IBM full-time for more than 3 years. Pros: Looks good on a resume, you gain experience. Working from home is possible by some; a lot depends on how your manager is. Flexible working hours.

      Cons: Bureaucracy and old systems. Very process oriented unless you are from a developed country and local teams trust you to drive improvements. Very big difference between managers; some are good, some extremel bad. Low salaries; there are promises that you can go to a developed country, which are in the end never true, no matter how good you perform. People are still treated as robots, with a high rotation as a consequence.

      Advice to Senior Management: If employees meet expectations, give them what they are promised. If you want seasoned analysts, you will need to pay them accordingly, otherwise there will only be graduates. No, I would not recommend this company to a friend.

    • Work and people at IBM” Anonymous Employee (Current Employee). Pros: Good team work. Good colleagues in our team. Excellent manager of our team. Many thinks to learn and upgrade knowledge. No pressure most of times. Cons: Bad senior management staff. Bad remuneration and almost no benefits/bonuses. No respect for efforts and work delivered. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Not the brand that it used to be” Product Manager (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Involved in all aspects of the IT industry. Still do some great research. Have a long history of success and some fantastically talented people...but that is waning. Cons: Cost cutting and uncertainty over what the company stands for is really hurting. Conservatism is catching up as well and newer, progressive organisations are taking over as the business becomes lost in red tape and siloed business units. There is a lot of middle management and not enough talented young staff being fostered through the company. Too many platitudes and too little action. Advice to Senior Management: Appreciate your hard working talent, train them, know what you stand for or your best people will continue to leave despite the brand name. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • IBM provided me with technical knowledge and experience I couldn't have found elsewhere.” Member of Technical Staff (Current Employee), Burlington, VT. I have been working at IBM full-time for more than 10 years. Pros: Constant learning environment and opportunity. Cons: Hire unfit personnel for leadership positions. Foster "rating" strategies that determine salaries based upon what other employees earn. Advice to Senior Management: Give more attention to leadership job candidates. I've been lead by folks who were anxious, self serving and exhibited out-of-control anger issues. Pay people according to their skills and not how they compare to others.
    • Curam Consultant (Curam Global Services)” Anonymous Employee (Current Employee). Pros: No pros working in Curam services. Cons: No growth in Curam Global Services. No onsites for talented consultants; provides onsites for consultants close to managers. Managers do not know how to do project planning, resource allocation, or team handling. Lot of politics, bias and harassment. Low pay package. Lot of work pressure, working on weekends, no overtime pay. Even senior consultants working from past 5 years on Curam do not know how to solve minor problems; delegate most of the work to junior consultants. Advice to Senior Management: Management should hear employee concerns. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • A once great company” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Lots of great people. Many technical challenges. Opportunity to work with people from all over the world. Cons: Work-life balance is poor. Very big company—if you can't deal with bureaucracy, you will be frustrated here. Cost cutting gets in the way of innovation. Advice to Senior Management: You can't grow the business by cost cutting—it takes investment. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Enjoyable but not ultimately positive” Advisory Software Engineer (Former Employee), Phoenix, AZ. I worked at IBM full-time for more than 10 years. Pros: Generally good benefits. Great coworkers. Some projects exciting. Cons: Stagnated in professional development. Remote location meant out of sight, out of mind. Projects underfunded so had to work with minimal resources. Benefits continually pruned. Management not in touch with local group. Cost cutting good for shareholders but not for employees. Personal development mostly on own time or at own expense. Advice to Senior Management: Be willing to replace directors who are out of touch. No, I would not recommend this company to a friend> I'm not optimistic about the outlook for this company.
    • Stressful place to work” Advisory Software Support Specialist (Former Employee), Toronto, ON (Canada). I worked at IBM full-time for more than 10 years. Pros: Many good and knowledgeable coworkers to work with. Working with leading edge technology in a large global company is good on the resume. Cons: Stressful place to work due to constant layoffs and increased workloads. Management only interests in $ instead of treating employees with respect resulting in deteriorated workplace environment. Advice to Senior Management: Respect your employees. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • No longer a good company it used to be” Anonymous Employee (Current Employee). I have been working at IBM. Pros: Flexible schedule and professional work environment. Cons: IBM no longer a company that I used to be proud to work for.
    • In most part, no technology company” Member of Technical Staff (Current Employee), Tokyo (Japan). I have been working at IBM full-time for more than 10 years. Pros: I do not think of any pros. Cons: Just buying other companies and re-label and selling them. Most of them do not have much knowledge about the products more than the name. Most of the engineers in those acquired companies are moved to sales roles, then lose their technical skills. Advice to Senior Management: We are selling technologies. We need to understand what we sell. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
  • Glassdoor IBM Canada reviews
  • Alliance for Retired Americans Friday Alert. This week's headlines:
    • This Grandparents Day, Talk with Your Grandchildren about Retirement Security!
    • Executive Director Ed Coyle Announces His Intention to Retire
    • Retirees Observe 50th Anniversary of Martin Luther King, Jr.’s March on Washington
    • Social Security’s 78th Birthday Receives Generous Attention
    • Happy 78th Birthday, Social Security!
  • Forbes: Enrich Your 401(k) In One Simple Move Using The Bogle Gospel. By John Wasik. Excerpt: If only every 401(k) investor listened to John C. “Jack” Bogle’s gospel. You could quickly improve your 401(k) returns in one, simple move.

    Then we wouldn’t be hearing daily horror stories of how wretched 401(k) plans are and why people aren’t saving for retirement.

    The gospel, according to Bogle, the founder of the Vanguard Group (where I have a lot of my retirement money), is simple: Cost matters!

    His “cost matters hypothesis” says that the best way of achieving market returns is through low-cost passive index funds. Everything else is going to cost you dearly. Yet it’s more than a theory. It’s based on irrefutable arithmetic, not speculation.

  • Washington Post: 401(k)s are replacing pensions. That’s making inequality worse. By Lydia DePillis. Excerpts: The once-dominant defined benefit pension plan–which pays out a fixed amount after an employee retires–is on its way to becoming an historical artifact. More and more employers are offering 401(k) plans instead, which require employees to pay into their own accounts, sometimes with and sometimes without a matching contribution. And according to a new analysis from the labor-oriented Economic Policy Institute, the effect has been a stratification of retirement savings by education, income, and race–which could deepen inequality among the elderly as the population ages. ...

    Generous pensions have gotten a bad rap in recent years because of the difficulty that companies and governments have had in keeping up with their obligations (see: Detroit). But, when they were more prevalent, they did have the beneficial effect of locking in retirement security for all of those lucky enough to have one. Now, especially with workers having a harder time dealing with immediate needs, putting away money for retirement is a trade-off they’re often not able to make–especially non-whites and the less educated.

  • National Institute on Retirement Security: Retirement Lessons from Australia, Canada, and the Netherlands. By John A. Turner, PhD, and Nari Rhee, PhD. Excerpts: Three nations offer lessons for providing high quality retirement plans with income adequacy, financial sustainability, and risk sharing.

    The goal of the research is to assess the level of security and risk provided by each country’s retirement system through the layers of income replacement provided by government, employer, and individual programs. In addition, this paper highlights key issues and lessons for consideration by U.S. policymakers and stakeholders.

    The paper finds that while the level of risk borne by employees varies across the three countries’ retirement income systems, risks are pooled among workers or offset by employers and government to a greater extent than in the U.S. In none of these three countries does the average worker individually bear all of the risks related to saving and investing to produce a level of retirement plan income that, combined with social security, provides a basic standard of living. The research also finds that...

  • Reuters, courtesy of Fidelity: Your money — first year of retirement: Where does the money go? By Lou Carlozo. Excerpts: That's good to know because virtually all of the retirement calculators require workers to guesstimate the amount they will spend in retirement. Many people lowball the figure for the first year, when new retirees outspend their expectations with celebratory trips and hobby supplies. Spending tends to slow down later, as retirees age, settle into routines and travel less.

    Flores estimates she spent about $112,000 in her first year of retirement; that's 75 percent of the $150,000 that was her last annual salary, a typical first-year percentage, say experts. But, like with Flores, not all the money goes to utility bills and blood pressure medication. Much of it is an upfront investment in lifestyle change.

    For all the research done in the name of retirement planning, there is scant data on actual expenses of first-year retirees. People between the ages of 65 and 74 spend 33 percent of their budgets on shelter; 12 percent on health care; 13 percent on food (with one-third of that on eating out); 5 percent on entertainment and 17 percent on transportation including leisure travel, according to the U.S. Bureau of Labor Statistics. ...

    "If you've worked for 40 years, as my wife and I have done, you think, well it's time to have a little fun," says Stan Hinden, a former Washington Post columnist and the author of "How to Retire Happy." He and his wife took a one-week $15,000 cruise to the Caribbean when he retired, and admits that "I had not included the cost of travel or fun in my budget. It took us about two years to figure things out, and we really had to slow down our spending."

    Part of that was necessitated by first-year health expenses, common among retirees who have given up employer insurance but are too young for Medicare and Medigap coverage. Even though he had Medicare, Hinden recalls needing two crowns in his first year of retirement, an expense Medicare didn't cover. Talk about a big bite: It cost him $2000, entirely out of pocket.

    Hinden tells preretirees to plan on spending more than 80 percent of their last year's income in their first year of retirement so they are ready for both the fun and the unexpected medical costs.

  • Economic Policy Institute: Retirement Inequality Chartbook. How the 401(k) revolution created a few big winners and many losers. By Monique Morrissey and Natalie Sabadish. Excerpts: Today, many Americans rely on savings in 401(k)-type accounts to supplement Social Security in retirement. This is a pronounced shift from a few decades ago, when many retirees could count on predictable, constant streams of income from traditional pensions. ...

    401(k)s are an accident of history. In 1980, a benefit consultant working on revamping a bank’s cash bonus plan had the idea of adding an employer matching contribution and taking advantage of an obscure provision in the tax code passed two years earlier clarifying the tax treatment of deferred compensation. Though 401(k)s took off in the early 1980s, Congress did not intend for them to replace traditional pensions as a primary retirement vehicle, and 401(k)s are poorly designed for this role (Sahadi 2001; Tong 2013). ...

    The shift to a retirement system based on individual savings also means that workers’ retirement prospects are increasingly affected by shocks to stock and housing markets and broader economic trends. Much of the 401(k) era coincided with a long bull market propping up household wealth measures even as traditional pensions became scarcer and the savings rate declined. This house of cards collapsed in 2001, and then again at the end of 2008. Though the share of households with any savings in retirement accounts has trended upward with the shift to defined-contribution plans and an aging population, it declined in the wake of the Great Recession (Figure 8). Nevertheless, aggregate savings in retirement accounts continued to grow faster than income even after the Great Recession (Figure 9), though median account balances declined (Figure 10) and retirement savings grew more unequal (Figure 11). ...

    Conclusion. The trends exhibited in these figures paint a picture of increasingly inadequate savings and retirement income for successive cohorts and growing disparities by income, race, ethnicity, education, and marital status. Even women, who by some measures appear to be narrowing gaps with men (in large part because men are faring worse than they did before) are ill-served by an inefficient retirement system that shifts risk onto workers, including the risk of outliving one’s retirement savings. The existence of retirement system that does not work for most workers underscores the importance of preserving and strengthening Social Security, defending defined-benefit pensions for workers who have them, and seeking solutions for those who do not.

  • IEEE Spectrum: The STEM Crisis Is a Myth. Forget the dire predictions of a looming shortfall of scientists, technologists, engineers, and mathematicians. By Robert N. Charette. Excerpts: You must have seen the warning a thousand times: Too few young people study scientific or technical subjects, businesses can’t find enough workers in those fields, and the country’s competitive edge is threatened.

    It pretty much doesn’t matter what country you’re talking about—the United States is facing this crisis, as is Japan, the United Kingdom, Australia, China, Brazil, South Africa, Singapore, India…the list goes on. In many of these countries, the predicted shortfall of STEM (short for science, technology, engineering, and mathematics) workers is supposed to number in the hundreds of thousands or even the millions. A 2012 report by President Obama’s Council of Advisors on Science and Technology, for instance, stated that over the next decade, 1 million additional STEM graduates will be needed. In the U.K., the Royal Academy of Engineering reported last year that the nation will have to graduate 100 000 STEM majors every year until 2020 just to stay even with demand. Germany, meanwhile, is said to have a shortage of about 210 000 workers in what’s known there as the MINT disciplines—mathematics, computer science, natural sciences, and technology.

    The situation is so dismal that governments everywhere are now pouring billions of dollars each year into myriad efforts designed to boost the ranks of STEM workers. President Obama has called for government and industry to train 10 000 new U.S. engineers every year as well as 100 000 additional STEM teachers by 2020. And until those new recruits enter the workforce, tech companies like Facebook, IBM, and Microsoft are lobbying to boost the number of H-1B visas—temporary immigration permits for skilled workers—from 65 000 per year to as many as 180 000. The European Union is similarly introducing the new Blue Card visa to bring in skilled workers from outside the EU. The government of India has said it needs to add 800 new universities, in part to avoid a shortfall of 1.6 million university-educated engineers by the end of the decade.

    And yet, alongside such dire projections, you’ll also find reports suggesting just the opposite—that there are more STEM workers than suitable jobs. One study found, for example, that wages for U.S. workers in computer and math fields have largely stagnated since 2000. Even as the Great Recession slowly recedes, STEM workers at every stage of the career pipeline, from freshly minted grads to mid- and late-career Ph.D.s, still struggle to find employment as many companies, including Boeing, IBM, and Symantec, continue to lay off thousands of STEM workers. ...

    Clearly, powerful forces must be at work to perpetuate the cycle. One is obvious: the bottom line. Companies would rather not pay STEM professionals high salaries with lavish benefits, offer them training on the job, or guarantee them decades of stable employment. So having an oversupply of workers, whether domestically educated or imported, is to their benefit. It gives employers a larger pool from which they can pick the “best and the brightest,” and it helps keep wages in check. No less an authority than Alan Greenspan, former chairman of the Federal Reserve, said as much when in 2007 he advocated boosting the number of skilled immigrants entering the United States so as to “suppress” the wages of their U.S. counterparts, which he considered too high.

New on the Alliance@IBM Site

Job Cut Reports

  • Comment 09/02/13: wiseguy - the only innovation that I've seen matter at IBM in the last decade is in the oh-so-serious matter of providing endlessly redundant status to those who couldn't innovate in technical ways if their life depended upon it, yet who somehow maneuvered their way into positions of authority and judgement over those who can. There's no way out of that inversion of wisdom scenario except a fall hard enough to knock the clueless lead-and-direct-mongers out of their undeserved positions so that they might be filled by those who really now how to make technology happen. I won't be one of them, because they've already gotten rid of me. I can only hope that they have one last gasp of accounting foolery left in their bag of tricks that somehow miraculously deceives the market into a $200+ share price again so I can sell off my paltry number of shares and be done with their inept nightmare forever. -broken-fingers-crossed-
  • Comment 09/05/13: -mo-: IBM can terminate the DB (Defined Benefit contribution "Old IBM pension plan" available to the "choicers" from 1999) or CB (Cash Balance) plan at any time: ERISA does not inhibit it. What is possible is that IBM "de-risks" only the old pension plan assets to another company basically sells all the pension assets to another entity totally independent from IBM to manage.If that entity goes bankrupt, then the pension goes to the PBGC for administration liquidation and does not count towards IBM's bottom line liabilities. Check the IBM Pension and Retirement issues Yahoo board for further discussion. -sby_willie-
  • Comment 09/05/13: IBM is soon going to become I Bleed Money. Haven't seen any company where finance not only rules the roost but also does great innovation...like reducing number of garbage bins, tea, coffee, data, pens, stationery, RAs etc. Looks like these are the only innovations they are capable of today.. -trashy-
  • Comment 09/06/13: This is for all IBM Medicare eligible retirees. I spent some time this morning with an IBM person, Steve who is in the group responsible for this. This part of Diane Chersons staff. This lengthy but I will start by summarizing what we lose and what we gain.

    As of Jan 1, 2014 we will no longer be part of ANY IBM medical program. Those will be for active employees and non-Medicare eligible retirees.

    This is a private exchange, not the same as the state and federal exchanges but governed by the same rules. The exchange is supposed to shop all available insurance offerings for Medicare part C, vision and dental. I made an appointment and registered online. There were a few Part C but no vision or dental.

    Additionally if you were a retiree with medical benefits IBM will pay a sum into a HRA account which will be used to assist with the premiums. Steve(IBM) could not identify for whom this would apply nor did he know how much would be given. He thought it could be more or it could be less than current. When asked he did not know anyone who had called or enrolled and the results. Would you not think they would at least try it.

    So what we lose: IBM medical coverage. Part C. Dental Vision. What we gain: NOTHING.

    He was genuinely surprised this had not made the media. I hope everyone of you contacts a newspaper and a Senator. There have been a lot of small and medium companies make this move but IBM is the first major company to trade their retiree health benefits for PROFIT. -Anonymous-

  • Comment 09/06/13: The first "Think Friday" presentation is this morning; the subject is Cloud computing. Guess what? The web site for the presentation is not responding! -Anon-

  • 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 08/31/13: At least one director suddenly found a bucket of overtime money so projects that impact his PBC get technicians to cover other techs furloughs. Some cost saving there. Pay 1 person 1/3 pay and the covering person 1.5X. Armonk has really lost all control over this company. Ginni better clean the executive house or she will be looking for employment like the 3000+ she kicked out this year. -On Furlough-
  • Comment 09/03/13: The "IBMer" was a brilliant work of propaganda because it empowered employees and made us into IBM. We could innovate, influence and be rewarded for creating the success of the company. The IBM error is the win/lose labor policies we've increasingly seen over the last few years. Is anyone not disillusioned? Does anyone left, still feel like an "IBMer"? -Theseus-
  • Comment 09/04/13: To Theseus. No, I don't feel any loyality to IBM nor feel any pride about being an IBMer. In fact, I am not an IBMer but a furloughed employee who will have little motivation to go the extra mile for IBM upon my return. IBM management has lost the motivation that employees felt as IBMers. We are now simple cogs in a big machine who are now to be manipulated at Loughridge's whim. I have as much loyality to IBM as I have to my wireless carrier. -Anonymous-
  • Comment 09/05/13: Alliance has become an important news source to IBMers and it speaks volumes to it's creditability that it has been blocked on the intranet. But it has not gone far enough. Every dollar that IBM has saved with benefit cuts and furloughs could be considered a donation to the Alliance if you muster our force.

    Employees will instinctively slow down since performance pay is dead or worse inverted. Attrition will remain high since our base pay is not competitive. "Failure to execute" will continue to hide poor management and institutional stagnation. Without the education, strategic planning, and coordinated actions of the union and non-union employees IBM will not change. We are complicit in propagating this treatment. Should we stand up or is it just time to change carriers? -Theseus-

  • Comment 09/05/13: Haven't seen any of the "I'm an IBMer" Smarter Planet commercials lately. I guess IBM is reluctant to flash them that frequently as the once did since the furloughed workers are essentially "I'm a 1/3 IBMer" in reality!? IBM still has $$$ to sponsor PGA golf tournaments, tennis, and for NPR but not for it's resources (ahem, employees). Now that shows something is seriously amiss. LIFE IS NOT GOOD as an IBMer (unless in the management inner Armonk circle). -trexibmer-
  • Comment 09/07/13: Advertising on NPR is often done to reduce guilt. Just ask Monsanto. Probably means more ugliness to come. -dazed-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • New York Times editorial: Doctors and Their Medicare Patients. Excerpts: Critics who want radical changes in Medicare, the public insurance program for the elderly and disabled, often allege that the program is heading for disaster because stingy payments from the government are causing a rising number of doctors to refuse to serve Medicare patients.

    In the critics’ most dire scenarios, baby boomers nearing retirement age could find that their current doctors are no longer willing to treat them under Medicare and that other doctors are turning them down as well. Those concerns have always been greatly exaggerated. Now a new analysis by experts at the Department of Health and Human Services should demolish that mythology for good.

    The analysts looked at seven years of federal survey data and found that doctors are not fleeing Medicare in droves; in fact, the percentage of doctors accepting new Medicare patients actually rose to 90.7 percent in 2012 from 87.9 percent in 2005. They are not shunning Medicare patients for better-paying private patients, either; the percentage of doctors accepting new Medicare patients in recent years was slightly higher than the percentage accepting new privately insured patients.

    Medicare patients had comparable or better access to medical services than the access reported by privately insured individuals ages 50 to 64, who are just below the age for Medicare eligibility. Surveys sponsored by the Medicare Payment Advisory Commission, an independent agency that advises Congress, found that 77 percent of the Medicare patients — compared with only 72 percent of privately insured patients — said they never had an unreasonably long wait for a routine doctor’s appointment last year.

    The findings from this survey and others can be sliced and diced in many ways. But the overall picture is clear: nationwide there is no shortage of doctors for Medicare patients. It is likely to stay that way, because Medicare is a big insurer that few medical practices can afford to ignore.

  • Pro Publica: Dollars for Docs. How Industry Dollars Reach Your Doctors. By Jeremy B. Merrill, Charles Ornstein, Tracy Weber, Sisi Wei and Dan Nguyen. Excerpt: Drug companies have long kept secret details of the payments they make to doctors and other health professionals for promoting their drugs. But 15 companies have begun publishing the information, some because of legal settlements. Use this tool to search for payments.
  • New York Times opinion: How a Cabal Keeps Generics Scarce. By Margaret Clapp, Michael A. Rie and Phillip L. Zweig. Excerpts: About a year ago, President Obama signed a law that was supposed to end chronic shortages of lifesaving drugs. But the critical lack of generic drugs continues unabated. It is a preventable crisis that is inflicting suffering on patients and, in some cases, causing needless deaths.

    According to the American Society of Health-System Pharmacists, a group that maintains a closely watched drug-shortage database, 302 drugs were in short supply as of July 31, up from 211 about a year earlier.

    The new law, which among other things requires manufacturers to report anticipated shortages, is ineffective because it addresses symptoms, not the underlying economic cause. Policy makers apparently failed to ask the important question: How could this happen in a free-market economy? That would have steered them to the giant purchasing organizations that control the procurement of up to $300 billion in drugs, devices and supplies annually for some 5,000 health care facilities. These cartels have undermined the laws of supply and demand. ...

    This perverse system was created in 1987 when Congress enacted the Medicare anti-kickback “safe harbor,” which exempted these buying organizations from criminal prosecution for accepting vendor kickbacks. Spurred by a 2002 New York Times investigation into anticompetitive purchasing group practices, Congress held several hearings to determine whether greater federal regulation was needed. Antitrust lawsuits and more government investigations and exposés followed. A study in fall 2011 issue of the Journal of Contemporary Health Law and Policy found that group purchasing organization kickbacks inflated supply costs by at least $30 billion annually. But little has changed because of the enormous political clout of the industry’s lobby, which includes the Healthcare Supply Chain Association and the American Hospital Association.

  • Washington Post: These two maps are incredibly important to Obamacare. By Sarah Kliff. Excerpts: If you want to understand where Obamacare stands to have the most significant impact, check out these new maps from the Census. They show uninsured levels for every county in the United States, broken down by income level...

    The top map shows the population that is likely to qualify for Medicaid coverage, if they live in a state that is expanding that program. The bottom map captures the Medicaid-eligible population and those who may qualify for subsidies to purchase health insurance in the new marketplaces.

    There are two things that these maps tell me. First, they underscore the significant impact that state policy will have on the Affordable Care Act. Texas and Florida have both decided not to participate in the Medicaid expansion, concerned about the financial implications of expanding an entitlement program. Those are states that tend to have a higher uninsured rate that will see them dip less than was initially expected under the health law.

    Second, these maps explain why you see a group like Enroll America focusing its work on 10 states, rather than sweeping out across the country. There are some areas of the United States, like the upper Midwest and the Northeast, that already have a relatively low uninsured rate. That likely explains why you see national groups focusing on a smaller area where they can likely have a larger impact, the places where uninsured rates for the poor hover as high as 40 percent.

  • Physicians for a National Health Program: Private insurers allow hospitals too much market power. High and Varying Prices for Privately Insured Patients Underscore Hospital Market Power. By Chapin White, Amelia M. Bond, James D. Reschovsky. Excerpts: Across 13 selected U.S. metropolitan areas, hospital prices for privately insured patients are much higher than Medicare payment rates and vary widely across and within markets, according to a study by the Center for Studying Health System Change (HSC) based on claims data for about 590,000 active and retired nonelderly autoworkers and their dependents. Across the 13 communities, average hospital prices for privately insured patients are about one-and-a-half times Medicare rates for inpatient care and two times what Medicare pays for outpatient care. Within individual communities, prices vary widely, with the highest-priced hospital typically paid 60 percent more for inpatient services than the lowest-priced hospital. The price gap within markets is even greater for hospital outpatient care, with the highest-priced hospital typically paid nearly double the lowest-priced hospital. In contrast to the wide variation in hospital prices for privately insured patients across and within markets, prices for primary care physician services generally are close to Medicare rates and vary little within markets. Prices for specialist physician services, however, are higher relative to Medicare and vary more across and within markets.

    Comment: By Don McCanne, M.D. Excerpts: This study confirms once again that health care prices for privately insured patients vary widely across and within health care markets. This study is particularly helpful because it shows where most of the problem is.

    It is not with the primary care physicians. They are "price-takers." They have very little negotiating clout with the insurers. They are forced to accept the insurers rates if they want to be in the insurers' networks. Thus prices for primary care physicians tend to be uniformly low.

    Specialists tend to be more concentrated and thus have greater clout with the insurers. In the more concentrated markets, specialists can command higher prices, resulting in regional variations in pricing depending on their market power.

    But the biggest problem is with the hospitals and their outpatient services. They have an even stronger negotiating position than the specialists. This is especially true of the "must-have" hospitals that are in great demand. With increasing merger activity, ever more hospitals are becoming must-have. ...

    Note that the reference standards for this study are the much lower Medicare rates - rates that private insurers pay only for primary care physicians. Instead of market power, we should be using people power through our representative government by enacting a publicly-financed and publicly-administered national health program - an improved Medicare for everyone - ensuring payment of legitimate costs and fair margins for the health care delivery system.

  • New York Times editorial: Uninsured in Texas and Florida. Excerpts: A new Census Bureau report documents the alarming percentages of people in Texas and Florida without health insurance. Leaders of both states should hang their heads in shame because they have been among the most resistant in the nation to providing coverage for the uninsured under the Affordable Care Act, the law that Republicans deride as “Obamacare.”

    The law seeks to cover millions of currently uninsured people by expanding the federal-state Medicaid program for the poor and by setting up new health care exchanges on which people can buy comprehensive private insurance policies, with subsidies to help middle-income people pay their premiums.

    Many states, mostly run by Republican governors or legislatures, have refused to expand their Medicaid programs despite generous federal matching funds or have refused to set up their own health exchanges; they have left that task to the federal government.

    Low-income residents of Texas and Florida desperately need health insurance, as shown by the Census Bureau’s Small Area Health Insurance Estimates for 2011, which were issued last week. The report found that more than 25 percent of the population in Texas under age 65 (5.7 million people) was uninsured, the highest rate in the nation. Florida was a close second, with just under 25 percent uninsured (3.8 million people). Massachusetts, whose pioneering reforms were the template for the federal reform law, led all 50 states and the District of Columbia with only 4.9 percent uninsured.

  • Financial Times, courtesy of Physicians for a National Health Program: Some big insurers leery of exchanges. Big US health insurers wary of ‘Obamacare’ exchanges. By Stephanie Kirchgaessner. Excerpts: Some big US health insurers, including Cigna, Aetna and UnitedHealthcare, are steering clear of most of the new state healthcare exchanges amid uncertainty about the kinds of customers they might attract: namely sick ones.

    The three companies have said they are taking a cautious approach because they need to evaluate how the markets – set up under the “Obamacare” reforms – will work. They add that they are specialised in providing insurance to big employers, not the individuals and small businesses that will be served by the exchanges.

    Comment: By Don McCanne, M.D. Excerpts: UnitedHealthcare, Aetna, and Cigna - three of the largest private insurers in the nation - have decided to not participate in most of the state exchanges being established under Obamacare. Obama and his health care architects had told us that it was better to build on the system we had, expanding the prevalence of private insurance. With this gift of a ready-made market for the private insurers, why are they sneaking away?

    America's private insurers have always welcomed the healthy and shunned the sick. The greatest example is the largest insurance market of all - America's workers and their families - not only the largest market in the nation but also the healthiest.

    In contrast, the individual and small group markets exposed insurers to greater risks, so they countered by using underwriting to select only the healthy while rejecting those who needed health care. In turn, Obamacare now prohibits selective enrollment - cherry picking and lemon dropping. Insurers rightfully fear that those with greater health care needs will rush into the exchanges, creating high cost risk pools that would price premiums out of the market. ...

    We should listen to UnitedHealthcare, Aetna, and Cigna. This is a highly flawed method of financing health care. It just doesn't make sense from a business perspective. But also we should give some thought to this ourselves. Does it really make sense to to insert an administratively wasteful insurance intermediary that has found great success in manipulating the markets so that they can welcome the healthy and shun the sick? Medicare Advantage has already proven to us that private insurers will always find a way around risk adjustment and other regulations in order to shift costs away from them and onto taxpayers.

    Obama and friends crafted this program to take good care of the insurers while depriving us of a less costly, more efficient and more effective social insurance program - an improved Medicare for all - and yet the insurers are still not satisfied. It's too bad that we are going to have to wait until 2015 and 2016 to see premiums skyrocket and insurers bail out.

    What will be our response then? Will we let the insurers continue to cover the healthy while accepting for the rest of us the fact that financial hardship is simply an inevitable consequence of facing serious illness? Based on the lack of public engagement to this date, it seems like that is where we are headed.

  • New York Times opinion: It Takes A Government (To Make A Market). By Paul Krugman. Excerpts: Lots of reporting on the new Kaiser Family Foundation analysis of what we know so far (pdf) about premiums under Obamacare. It definitely looks as if there will be a mild “rate shock” — in the right direction. KFF:
    While premiums will vary significantly across the country, they are generally lower than expected.

    What’s going on here? Partly it’s a vindication of the idea that you can make health insurance broadly affordable if you ban discrimination based on preexiting conditions while inducing healthy individuals to enter the risk pool through a combination of penalties and subsidies. But there’s an additional factor, that even supporters of the Affordable Care Act mostly missed: the extent to which, for the first time, the Act is creating a truly functioning market in nongroup insurance.

    Until now there has been sort of a market — but one that, as Kenneth Arrow pointed out half a century ago, is riddled with problems. It was very hard for individuals to figure out what they were buying — what would be covered, and would the policies let them down? Price and quality comparisons were near-impossible. Under these conditions the magic of the marketplace couldn’t work — there really wasn’t a proper market. And insurers competed with each other mainly by trying to avoid covering people who really needed insurance, and finding excuses to drop coverage when people got sick. ...

    In an alternative universe, conservatives would be celebrating this good news as a vindication of their views. See, the Heritage Foundation — which actually developed the original version of this plan! — was right! You don’t need single-payer, just a properly set up market system. (For the record, I believe that single-payer would be better and cheaper, and it’s still a goal we should seek).

    But in this universe, conservatives claim that creating a real market for health insurance, and making sure that everyone can afford it, is the moral equivalent of slavery.

  • New York Times: Insurance Rolls to Rise in State Fighting Plan. By Robert Pear. Excerpts: Brenda B. Culick has two stents in her heart and a severe wound in her right leg, injured while she was doing home repairs six months ago. But she cannot afford to see a cardiologist or go to a wound care center.

    Her household income is $1,200 a month, but she does not qualify for Medicaid because she has no dependent children and is not disabled. Ms. Culick, 52, is one of several hundred thousand people left behind by South Carolina’s refusal to expand Medicaid under President Obama’s health care law — a choice made by about half the states.

    “If I could get Medicaid, I’d be the happiest person on earth,” Ms. Culick said.

    In her State of the State speech in January, Gov. Nikki R. Haley, a Republican, said, “South Carolina will not implement the public policy disaster that is Obamacare’s Medicaid expansion.” And she boasted of her stance at a recent rally announcing her bid for re-election. “When it came to Obamacare,” she said, “we didn’t just say ‘no,’ we said ‘never.’

    The reality, however, is more complex. South Carolina officials say they welcome the prospect that more than a half-million state residents — out of a population of 4.7 million — could soon gain access to affordable coverage, even without the expansion of Medicaid eligibility. And they are working to remake Medicaid so that it does not just pay claims but produces measurable improvements in the health of poor people. ...

    Mr. Obama’s health care law was intended to provide coverage in two major ways: by expanding Medicaid eligibility and by setting up an insurance marketplace, or exchange, where people can shop for private insurance.

    Ms. Haley and the Republican-controlled Legislature here did neither. But state officials say they recognize that low- and moderate-income residents will get insurance subsidized by the federal government, in a marketplace run by federal officials. ...

    As a condition of receiving their full allotment of Medicaid money, hospitals in South Carolina will be required to check uninsured patients to see if they might qualify for the existing Medicaid program, for subsidized insurance on the federal exchange or for other coverage. ...

    If South Carolina expanded eligibility as envisioned in the federal law, state officials said, 344,000 people, including some who now have private insurance, would become newly eligible for Medicaid. One-third of state residents could then be on Medicaid.

    State Senator Darrell Jackson Sr., a Democrat from Columbia, said: “Of all the years I’ve been in politics, including 20 years in the Senate, I’ve never been more disappointed or embarrassed than when we rejected the expansion of Medicaid. And I’ve never seen a more foolish decision. This was all about politics.” ...

    It was for adults like Ms. Barr that Congress tried to expand Medicaid. But the United States Supreme Court converted the federal mandate to a state option.

    “A lot of people have to die because they cannot get any help,” Ms. Barr said. “I hope I’m not one of them.”

  • The Christian Science Monitor: What will your Obamacare premium be? Numbers are in for 17 states. (+video) So far, premiums are coming in a bit lower than was anticipated by the Congressional Budget Office, according to a new report. That doesn’t mean Obamacare is cheap, but worries about massive cost spikes may be overblown. By Mark Trumbull. Excerpts: But the Kaiser Family Foundation weighed in Thursday with a report on some 17 states, plus the District of Columbia, that have unveiled their pricing.

    The report concludes that, from the numbers that are in so far, premiums are coming in a bit lower than was anticipated by the Congressional Budget Office. That doesn’t mean health care under the Obama reforms is cheap, but worries about massive cost spikes may be overblown. ...

    Monthly premiums for a single 40-year-old with an income of $29,000 would be $201 in Portland, Ore., for a typical “silver” plan offered by insurers. In New York City, that same plan would be $390. (Plans are labeled gold, silver, or bronze based on how much the buyer will have to pay out of pocket. A gold plan costs more in premiums but has lower deductibles.)

    Now here’s the Obamacare twist: Since the income for that 40-year-old is less than four times the poverty rate, government subsidies will kick in that bring the individual’s cost down to $193 per month in both places. It’s also $193 in Hartford, Conn., and in Los Angeles. ...

    The report shies away from making comparisons of insurance costs “pre” and “post” Obama reforms. For one thing, the law mandates a whole different approach to insurance in which individuals, for example, can’t be asked to pay sky-high prices because of preexisting medical conditions.

  • Washington Post: Yes, we know premium prices under Obamacare. No, we don’t know if people will think they’re affordable. By Sarah Kliff. Excerpts: Premium subsidies may be one of the most complicated parts of the Affordable Care Act to understand, and that says something when you’re talking about a 2,000-page law that overhauls the American health-care system.

    They’re also crucially important to the health care law, the factors that determines how much health insurance will cost under Obamacare and whether Americans will decide that price tag is affordable. So, today, we’re going to use a brand new report from the Kaiser Family Foundation to explain how the subsidies work. Get. Excited.

    Kaiser’s report is arguably the most in-depth look we have at how much health insurance will cost under Obamacare, using actual rates that insurers will charge in 17 states and the District of Columbia. ...

    In Seattle, the second-lowest silver plan costs $283 a month. Eight percent of our Seattleite’s income is $2,316, or $193 per month. So, the federal subsidy steps in and provides a subsidy of $90 per month to make up the difference.

    But here’s another important factor: The Seattleite doesn’t have to buy a silver plan. She could decide she wants less robust coverage and use her $90 subsidy to buy the least- expensive plan, a bronze-level product that costs $213 per month. Factor in her $90 subsidy, and she’s paying $123 a month.

    Conversely, the Seattleite could decide she wants a pretty rocking gold plan, which will cover 80 percent of the average subscriber’s monthly cost. That plan is likely more expensive, and she’ll only get a $90 credit to help with the purchase. The data we have on Massachusetts, for what its worth, suggests that most marketplace enrollees will stick to bronze and silver plans. ...

    The Seattle insurer that charges a 40-year-old $283 per month for a silver plan wants to charge a 60-year-old $601 for the exact same product. But that actually doesn’t matter too much for the 60-year-old. Since he also earns $28,725, he’s going to have his contribution capped at 8 percent of his income. That will take a $408 subsidy to bring his contribution to $193.

    And like the 40-year-old, our 60-year-old Seattleite has the option of using his subsidy to buy the cheapest plan in the marketplace. And since he has a much bigger subsidy, this has the effect of making a bronze plan way cheaper. His $408 subsidy, applied to a $452 premium plan, means he’s paying $44 per month.

    “There are a lot of quirks in the law, and this is one of them,” Leavitt says of older people paying less for the cheapest plans than their younger counterparts. “The opposite is also true there — that older people will have to pay more than younger people if they want to go up to gold. Then older people are having higher costs.”

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