No. 3: IBM Job cuts: 9,400 Number of employees: 434,246. YTD share price change: -2.4 percent. In the first quarter of the year IBM reported a drop in its sales, which was followed by an announcement that the company would cut between 6,000 and 8,000 workers worldwide. Yet while cuts took place largely outside the U.S., many American IBM workers were still targeted for layoffs. As of August, the company had trimmed more than 3,300 jobs in the U.S. and Canada and furloughed much of its hardware staff. Prior to its recent struggles, the company received criticism for outsourcing jobs to India. Recently, the New York Post reported that IBM now employs more workers in India than in the U.S.
Intelligent Business Research Services (IBRS) analyst Alan Hansell said the company's "professional standards" had slipped in recent years. He says IBM is no longer winning the big services contracts it once did and is shedding staff in response. "The focus has changed from people to profit," said Mr Hansell, whose career at IBM spanned three decades. ...
US-based online support group Alliance@IBM encourages workers to share their experiences. A Sydney-based IBM staffer wrote in September: "Workplace morale is at rock bottom due to mass [redundancies]." Another IBM worker posted: "They continue to simply throw out employees, cut benefits, while all along the execs are making a killing." ...
IBM even has a name for its job-cutting program: Project Mercury. It has seen Australian services sent offshore to Singapore, Malaysia and Ireland. One senior manager, who expects to be made redundant this year, says IBM Australia had shed most of its procurement, finance and accounting roles. Some point to the use of foreign workers on 457 visas to further drive down costs in the industry more broadly.
What's amazing to me is that there's been almost no explanation of why IBM lost, and why Amazon won. I promise I'm going to make it super easy to understand exactly why it happened.
Before I reveal the secret, let's look at what happened at the top level. The short history is that Amazon won, then IBM protested, but then Amazon won the protest. That back and forth is rather typical with government contracts. However, that "ping pong" activity doesn't explain why IBM lost. That's what investors really need to know. ...
You'll notice in the chart above that Amazon won the contract despite the fact that their AWS solution is more expensive. Are you shocked? What about all the jokes about $750 hammers?
Believe it or not, the U.S. Government often does an outstanding job working through RFPs. I know that's hard to believe but I have direct experience. I worked for one of the largest defense contractors in the world and I was responsible for systems engineering contracts from $1M to $50M. Trust me, they do a reasonable job most of the time.
Now, recall the four criteria and the final results are very simple:
IBM was beaten this time. They fought hard, but they lost. And, because there was a certain level of shock value, the financial media really took this for a ride. That's because they know most people still think of Amazon as an online retailer and they think of IBM as a technology company. To the tech media, it's kind of a David vs. Goliath thing, although it shouldn't be that way per my notes above.
It appears like Amazon deserved to win. No tricks, no weird stuff, and no glitches in the selection process "forced" Amazon to beat IBM. In short, now you know how Amazon beat IBM to get the CIA's cloud contract.
Selected reader comments follow:
Deadweight. There is still a good amount of deadweight at IBM. However, the deadweight is no longer in the lower ranks. The vast majority of the past layoffs have been in the lower ranks. At a minimum, the last two layoffs were lower ranks bone-cutting and not fat-cutting.
The good news is that there is plenty of fat that can be cut. And I believe the impact to the IBM bottom line could be fairly significant.
Additionally, the IBM upper management is principally US based. A tremendous amount of money could be saved by replacing the US based upper management with non-US upper management, paid at non US rates. India for one has a good number of capable, tech-savvy executives whom I believe would do a more than capable job of running IBM at a much lower cost than the current executives.
Lastly, what IBM desperately needs is visionary leadership at the top. They need leadership with a long term focus on growing the business thru innovative technology. IBM needs to make major investments into the company and its people if they truly want to compete going forward. The current model of boosting the stock price at all costs with everything else be damned, including the long term viability of the company, is running the company into the ground.
The company is striving to make efforts to in-source jobs within the U.S. by opening up "delivery centers" and dismantling the 'work-at-home' concept. By encouraging collaboration, and utilizing other resources with various backgrounds and expertise, the plan is to "support" as many clients as possible, while providing it at a reasonable price, and still making a profit.
Cons: This organization has improved from years prior, however its growth is stagnant at times, and its vision is unclear. The problem with this methodology is that there are some who are over utilize way over capacity, doing the work of 3 FTE, while other's can sit on their rear-ends and support a very non-busy client. The pay is far below average compare to the industry average; promotions and growth are non-existent, and IBM is losing it's quality brand-name by hiring many 'unqualified' very limited skilled employees (both outside and inside the country).
Advice to Senior Management: It's up to the individual to decide where their fate lies within IBM. Some managers care about their employees and will do every effort they can to retain, but then again there's only so much they can do on their end, that there is a good chance you can do better else where. Management knows what they need to do to keep their best employees, while staying profitable.
Cons: Employee turns 50; becomes target for layoff. Employee must sign waiver to give up rights to sue IBM for age discrimination to receive severance "package". Required by law to divulge ages of employees targeted; the percentage age 50 and above is astounding.
Advice to Senior Management: With age comes wisdom, a vital ingredient for success in any endeavor. Combine the youthful enthusiasm of fresh faces with the wisdom attained by experience to bring to market dynamite products. Acknowledge the truism "Respect thy elders." No, I would not recommend this company to a friend.
"With respect to your question asking for clarification on accessing your IBM subsidy through the Health Reimbursement Arrangement (HRA), you were advised correctly by Extend Health that you, the retiree, must enroll in a medical plan or prescription drug plan through the Medicare Exchange to receive the HRA. If you are enrolled through Extend Health, it is not necessary that your wife also enroll through Extend Health, and you will be able to use the HRA to reimburse your and your wife's health care premiums and eligible out-of-pocket expenses, including deductibles, copays and coinsurance."
I don't see anything here that requires "too much interpretation". Dr. Rhee did everything short of drawing me a picture. A Medicare Part B premium is a "health care premium" - no interpretation is needed. Any retired employee who buys a Part D drug plan for him/herself unlocks the HRA subsidy.
The HRA, as described above, can be thought of as a joint account. This means that the funds can be used to obtain reimbursement for insurance premiums paid by either, or both. The analogy would be the manner in which two owners of a joint checking account have access to the funds. Do you not see this in what Dr. Rhee has written?
We don't need matrices to explain this. We don't need more interpretations. What IBM muffed, in terms of its original communication, has now been made clear.
So, all of this is a moving target set for 1 year periods. The danger is that IBM is not in control of the plan acceptance any more, the insurance companies (with their underwriting) and Medicare rules now apply.
You might be unable to continue to use the HRA because the medical plans or drug plans are no longer acceptable to you, or sufficient for your particular situation, or the underwriting rules will prevent your enrollment. It's a risk we all have to bear for the future even if one assumes that the subsidy will be continued.
The fact that one has to now declare in perpetuity who is using the subsidy in 2014, how it may be allocated to your surviving spouse, and which will be irrevocable sounds to me like the whole funding will be annuitized an sold off to an insurance entity. Think about why a retiree with a $3500 subsidy has this reduced to $2600 if he wants coverage for his spouse after his demise. She will receive $1300 at that time, but if she predeceases him, there is no restore option (like there is in the pension plan) to bring his HRA account back to $3500.
Where are the actuarial tables that support that? Whatever policies, rules, etc. are contained in the plan documents (which we have not seen) will govern all future disbursements. It might be perfectly acceptable to note use the HRA anymore if you can't change your plan(s) to retain access. I'm assuming that that could be a real possibility. In the meantime, all we can do is ask for clarifications and hope that IBM will publish the plan document so that future decisions can be clearly made.
Health Reimbursement Arrangement Eligible Expenses A health reimbursement arrangement may reimburse any expense considered to be a qualified medical expense under IRS Section 213 of the Code, including premiums for personal health insurance policies. Within IRS guidelines, employers may restrict the list of reimbursable expenses in any way they choose.
While I know not everything posted on the web is correct, I do think this is correct. I have called Extend Health 3 times asking questions about this and have been told that Part B premiums are not reimbursable and that in order to get reimbursed for excess dental I had to purchase dental insurance. I don't know what to believe. When I ask for documentation spelling this out, I am told they (the people I am speaking to) do not know where I can get it.
Of course, if they would continue to support the surviving spouse with the full $3000/$3500 benefit, I don't think there would be any legal problems, but they pay Towers Watson the big bucks to find these 'loopholes'.
Does anybody know how the FHA-HRA is handled for a surviving spouse?
It makes me wonder what happens if an old-plan retiree dies before age 65 and starting Medicare. What will the spouse get when they then become eligible for Medicare? No reduction at all since the retiree never collected anything (hah!)? Or perhaps nothing at all.
Is Extend Health playing games to enhance their commissions from the different insurance companies? In Delaware Extend Health seems to only offer Humana for Supplemental Plans, but has different Medicare Advantage offering, depending on the county you live in. Any input would be helpful!
So quotes by county or ZIP code are not some contrivance by Extend Health.
But you can check this out on the Medicare website; remember that EH is just a broker of existing policies. You should see exactly the same divisions by geographic area. Now, whether there’s “gerrymandering” of areas by insurance companies and state regulatory boards, that’s a whole different topic.
What really amazes me is the fact that RHEE lied thru his teeth, when he said there would be more choices with ExtendHealth. He had to know his lie would be revealed as soon as we signed onto ExtendHealth and saw the few options we had, and how those options are much more expensive, and offer less. Just look at the dental offerings, the costs and the ridiculous limitations and low limits.
I can stay on that plan for two more years and then must go with EH in 2016. This leads me to guess that IBM will get out of the healthcare business for all its employees and retirees in 2016 and we retirees are the pilot project for the mass exodus from IBM. Better for IBM to make its mistakes and learn from our less numerous population of retirees so they will be more prepared to do a better job of jettisoning current employees.
As a physician I have to sign forms for pharmaceutical company special programs on behalf of patients, and the ones I have seen are only available to patients with NO pharmacy insurance, and often they want tax return data so they can look at income. I don't think any of those "rules" came from Medicare (but I certainly don't claim to understand this entire quagmire).
I am going with Plan N for my wife and I and we need to pay 89 copays to equal the cost of plan F. Plan N is $139/month/person. With the 5% discount for my wife and I on the same plan equals $3169.20 for the year. Plan F is $206.50 /month/person. That is $4956 a year. The difference is $1786.8. At $20 co pay for doctors’ visits that comes to 89 visits. That is That is the BE point.
Where I am, the difference between Plan F & N is only $39 per mo or $468 per year. Subtract the above and the two plans are pretty close. I’ll probably go with an F or F-HD, since the likelihood of being able to continue w/o changing plans in the future could be better.
Plan N is a new plan (2010) with some very minor cost sharing. This may become the standard plan, I read, if the federal government makes a change that Medicare people are required to have some cost sharing and Plan F goes away. With a little cost sharing, the premium is lower. Right now, you have a choice and premiums do vary by zip code, so Plan N may make sense for some, but not for others.
It sounds like the new Plan N has caught on and is very popular from what I am reading via a Google search, if there is a good difference in premium, it would cover the Part B deductible of $147 and the rare doctor office visit ($20 copay), The emergency room charge of $50 is waived if you are admitted, so that seems an incentive to stop using the emergency room if you have a cold instead of going to a doctor - when I was young I did that all the time and it is costly for the insurer.
I read an article about Arizona Sun City retirees who overwhelmed an insurer who sold Plan N, because they wanted the low premium.
So if you live in one of these, states, you don't have to be concerned about a Plan N major risk (e.g. 10% excess charge on $100K heart attack means you personally pay $10,000).
I found the above information on multiple sites including this one (near the end): http://www.medicaresupplementsolutions.com/medicare-excess-charges/
The Medicare rates are also lower for doctors who do not accept assignment so it is not really 15%. If you don't want to pay excess charges, get a doctor who accepts assignment as most do. In a rare emergency you might be unconscious or unable to select a doctor and possibly subject to a doctor who does charge the excess. But most doctors accept Medicare rates.
The principal point of my post was to share new information (it was new to me, and I suspect it will be new to many others). I did not realize that "excess charges" were prohibited in some states, like mine. I realize this part was of my post was irrelevant to you, given that you live in NJ.
I agree that my $100K example was extreme. Not a black swan event, but still extreme. So lets ratchet it down to $20K. At the 10% excess charge rate I used, it would still be $2000 out of pocket.
You said you were not worried about the excess charge exposure. I'm not worried either, but for me, $2K is large enough to be worthy of consideration.
It often seems that you pay now, or you pay later. Insurers will get their money one way or the other. If a state disallows excess charges, you may find insurers charge very high premiums like in NY. Or with low premium Plan N (no excess coverage) instead of high premium Plan F (excess coverage), you can save the premium difference and that is savings to pay any out of pocket costs should there be any. There are many variables to consider, and this has been a discovery process for all of us.
You stated that "It often seems that you pay now, or you pay later. Insurers will get their money one way or the other."
That also seems rather glib. I realize I'm an edge case, but I will be out of state 90 percent of the time. Given I will have a Medigap policy, for nation-wide coverage, my exposure has nothing to do with "insurers". My primary risk is providers. If I have a medical emergency away from my home state, I probably won't have time, or inclination, to shop and won't have any prior medical relationships. So my risk of being fleeced by Excess Charges will be greater than yours being at a fixed site in NJ.
I'm not "worried" about Excess Charges, but I do have more risk than you do in this category. So I naturally value insurance coverage for large Excessive Charges more highly than you do.
I get health care in a state where excess charges are permitted. I have personal experience with excess charges. For the vast percent of people who are reading this, and who live where excess charges are permitted, there is no problem, nothing that even approaches what you are pondering out loud.
A $2000 worry is over the top. In the first place, excess charges apply only to Part B (outpatient) charges. The truly heavy duty charges typically occur for Part A expenses, which are not subject to excess charges.
In the second place, when you call a provider as a new patient, they will almost certainly let you know that they do not accept assignment, and that you will pay excess charges. So, there isn't normally going to be a surprise, unless one isn't paying attention. Once you know, you have the option to go elsewhere.
Since most people live in urban areas, where there is actual competition in health care delivery, these charges are not hard to avoid.
In the third case, a lot of Part B charges are for labs/tests. These services, while technically advanced in many cases, seem to be commodities. I can't recall any lab/test service that resulted in an excess charge.
In the fourth place, Medicare rates are highly discounted rates - hard for me to imagine running up $20K/year in Medicare-approved outpatient expenses, much less $20K in outpatient expenses that are subject to excess charges.
I think that the worst I have ever been hit with, in any single year, is a couple of hundred bucks in excess charges, typically for specialist consultations.
I am signed up for a Plan N. I know exactly excess charges are about. No problem.
I've found 10-20% savings if you can do quarterly mail-delivery, but there are anomalies with some plans/providers actually costing more. Encourage everyone to also check this out for your own situation.
First page, third paragraph from the bottom says: "This envelope must be received by Budco on or before December 16, 2013."
First page, second paragraph from the bottom says: "There will be a 30-day period (December 17, 2013, to January 16, 2014) during which you can submit changes to a form received on or before December 16, 2013 (or submit a form if you did not do so by December 16, 2013)."
Finally, first page, last paragraph says: "The only way you can change that is if you submit a form electing NO SURVIVOR COVERAGE between December 17, 2013 and January 16, 2014.” [By the way – this part suggests that they prefer NO SURVIVOR COVERAGE.]
Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Comments on the survivor coverage letter" by "morris evans". Full excerpt: Does anyone know why we have to have the Survivor Form “notarized” before sending it back?? I have no survivors and for me to have to pay to have it notarized just does not seem right! Am I the only one that feels this way?
The last time I paid for a notary was years ago – it was 25 cents. I think gasoline was about the same price! Notary fees presumably have gone up since then, but I haven’t had to pay after I opened a small no-fee checking account at a bricks-and-mortar bank, just to have free notarization service and an almost-free safe-deposit box. Unfortunately the bank noticed that it had many customers with free low-balance checking accounts and a perennial shortage of available safe deposit boxes, and started charging more for the safe-deposit boxes. Problem solved (for them).
But for your situation, Morris, it does look like “they’ve” got it backwards – I’d think that if you DIDN’T get the form notarized/mailed, then there would be no survivor’s benefit. Federal/State regulations are written in mysterious ways – not for mortal folks to understand.
EH agency is a private company which is a health care insurance paddler. Why IBM limit us in selecting few of EH full offerings?
Can IBM reduce the latest HRA again?
Why IBM offered Delta only dental insurance? What was wrong with the MetLife? What is the MetLife dental insurance cost?
Finally, Is IBM trying to boost her EPS from employee and retiree benefits cuts?
Premiums: Medicare Advantage plans charge the same premium to everyone. Medigap premiums can vary greatly depending on the age at which you bought the plan, how long you have had it, and the state of your health.
I am back looking at what my new options are!
I'm not even sure I know about all the elements such a decision encompasses.
I admire the ability of posters here to absorb all this information and come up with such plausible insights.
Some day, a poster here might summarize all or even one of the elements of the decisions we have to make and the arguments for and against a particular course of action. Until then, I'll keep struggling to keep up.
That leads me to suspect that there is a small army of folks out there who may need some help, if we presume that it is wise not to be totally dependent on an EH advisor. I don't know how to find the members of that small army, other than one by one through personal knowledge.
Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Medicare Advantage without drug coverage?" by "fhawontcutit". Full excerpt: "It's amazing to me how complicated it is. Which plan to buy, not buy, buy in combination. I'm not even sure I know about all the elements such a decision encompasses." Welcome to consumer-driven healthcare! Ain't it grand? (I tried to warn everyone.) Watch out for traditional Medicare going the "consumer-driven" route. You've been warned.
Also for those that are not aware, you can enter your drugs on the medicare.gov website and it will find the Part D plan that will save you the most money. For us, it also turned out to be the AARP plan, and it wasn't even close.
The big problem, as I'm sure most of you have already found out, is that the dental plans STINK. Almost $500 a year premium for $1000 coverage, and it doesn't cover implants or caps and abutments for them. You might as well not get a dental plan. In fact, our dentist told us that before we even looked at the website.
More than 16,000 Coloradans applying since the launch Oct. 1 appear to qualify for the Medicaid expansion that is one of two prime pillars of Obamacare health insurance reforms for 2014, state officials said Thursday.
Another 9,000-plus adults without children who were on a waiting list before Oct. 1 will also be enrolled in the Medicaid expansion on Jan. 1, according to the Medicaid office of the state Health Care Policy and Finance Administration. ...
Colorado is one of 14 states running its own exchange. Congressional leaders Thursday sharply questioned Obama administration officials and contractors at hearings on major problems in the 36 states who must go through a federal computer hub for new insurance.
True, that sentence comes with a large asterisk. It is working in states that have followed the essential design of the Affordable Care Act, particularly in Kentucky, Connecticut, Washington and California. The law was written with states’ rights and state responsibilities in mind. States that created their own health-care exchanges — and especially those that did this while also expanding Medicaid coverage — are providing insurance to tens of thousands of happy customers, in many cases for the first time.
Those seeking a model for how the law is supposed to operate should look to Kentucky. Gov. Steve Beshear , a Democrat in a red state, has embraced with evangelical fervor the cause of covering 640,000 uninsured Kentuckians. Check out the Web site — yes, a Web site — for regular updates on how things are going there.
“We’re signing up people at the rate of a thousand a day,” Beshear said in a telephone interview. “It just shows the pent-up demand that’s out there.”
Beshear urges us to keep our eyes on the interests of those the law is intended to serve, our uninsured fellow citizens. “These 640,000 people are not some set of aliens,” he says. “They’re our friends and neighbors. . . . Some of them are members of our families.” As for the troubled national Web site, Beshear offered this: “If I could give unsolicited advice to the critics, and maybe to the media, it’s: Take a deep breath.” ...
Some explanations, however, are obvious. The federal government was not supposed to be running this many insurance exchanges. You might have expected that Republican governors who cherish the prerogatives of the states would, like Beshear, welcome the chance to prove that this free-market approach to providing insurance coverage could thrive.
Instead, bowing to tea party obstructionism, most Republican governors took a powder. According to the Commonwealth Fund, only 16 states, plus the District of Columbia, have marketplaces that they fully run. Among the remaining 34 states, 19 are fully in the federally run marketplace, seven states have state-federal partnerships, and seven others are helping manage federally facilitated marketplaces. Utah is running a small-business marketplace, leaving individual plans to the feds.
Needless to say, the federal government wasn’t ready for this staggeringly complex task. Consider that individual states didn’t have to worry about any other jurisdiction’s insurance laws. The feds had to deal with sometimes vast state-to-state regulatory differences. I am told that an estimated 55 contractors and subcontractors had to collaborate on different aspect of the project. Reportedly, they all claim that their part of the enterprise works fine. It’s the interaction with the other pieces, they insist, that’s problematic. ...
But it would be unconscionable to give up on the goal of expanding the ranks of the insured simply because of tech failures. “They’re not going to walk away from this,” Beshear said of Obama administration officials, “and we’re not going to walk away from this.” Thus the spirit of a country that sticks with solving a problem, even when things get hard.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
Mr. Cruz has put a hold on the nomination, his spokesman told reporters, to find out if Mr. Wheeler would vote to require greater disclosure about political ads on television and radio bought by independent groups. Such groups can currently keep donors secret even as they spend hundreds of millions of dollars to influence elections. Mr. Cruz says he is trying to get more information and to make sure the F.C.C. does not exceed its authority. ...
Mr. Cruz knows that Congress will not repeal federal laws granting the F.C.C. power to require disclosure, so he is trying to bully Mr. Wheeler into agreeing not to exercise the agency’s authority. The fact is, neither he nor supporters of Republican candidates and conservative causes want disclosure of spending on commercials by groups like Americans for Prosperity, which is backed by the billionaire Koch brothers.
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