Highlights—October 26, 2013
- MSN Money: 5 companies cutting the most jobs. For reasons ranging from technological changes to sheer survival, these five businesses have cut over 50,000 jobs this year between them. By Alexander E.M. Hess and Michael B. Sauter. Excerpts: According to data compiled by Challenger, Gray & Christmas, 10 companies alone have announced close to 75,000 job cuts combined this year. That represents nearly 20 percent of all the announced cuts in 2013. The companies that are cutting the most jobs this year are, not surprisingly, in industries that are eliminating the most positions overall. The financial services sector is leading the way with 48,874 planned layoffs year to date, while retail and aerospace companies were also shedding many thousands of positions. ...
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.
- ABC News (Australia): IBM quietly slashing Australian jobs, moving work offshore. By Alex McDonald. Excerpts: Technology giant IBM has quietly slashed its Australian workforce, with anxious staff preparing for up to 1,000 more redundancies, the ABC understands. Several hundred Australian workers have been laid off this year, the ABC has learnt. Up to 1,000 more local jobs are likely to go in early 2014, although IBM would not confirm that figure. ...
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.
- Seeking Alpha: Why IBM Lost The CIA Contract To Amazon. By John Rhodes. Excerpts: There's been a flood of news about how International Business Machines Corp. lost a lucrative $600M CIA cloud contract to Amazon in early 2013, and the appeal.
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:
- Technical/Management -- Amazon Wins
- Past Performance -- Amazon Wins
- Security -- Neutral
- Price -- IBM Wins ...
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:
- Overpaid and underworked? Are you kidding me? IBM is one of the lowest paying in the industry now, and nearly everyone there is overworked. *THAT* is the main reason that morale is in the toilet. That and the constant fear of irrational outsourcing, meaning even if you're the only person in the universe that knows how to do what you do, it still doesn't give you any job security, because there are so many layers of management that the big wig laying you off has no idea.
- Morale. Morale is extremely low in the ranks and getting lower. It's been that way for a good number of years. This leads me to believe that morale is a non-factor in IBM's business decisions. They apparently believe morale is completely irrelevant in business.
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.
- Middle management. For whatever reason, middle management has not been significantly hit with layoffs over the years. With all the lower rank cuts, there are now a good number of IBM lower level managers who have few-to-no employees to manage. I believe this is where the next layoffs will likely come. Most of these managers feel/know that their days are numbered. It's just a matter of when.
- PhD academia employees. These are very well paid employees who for the most part add very little to the business. They certainly don't add anything to day-to-day operations, nor to the long term company direction. Their value appears to be PR. IBM PR loves to toss out the number of PhDs in the company, which I suppose sounds impressive, but in reality is totally meaningless. And there are lots of them. Thinning them out would be a tremendous cost saving.
- Upper Management. There are way too many VPs who don't appear to add anything to the business. However, they have been untouchable, other than an occasional retirement or two. I don't have the figures, but I believe they make at least 10 times the amount of the average IBM employee. I believe thinning them out would be a tremendous cost saving.
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.
- Glassdoor
IBM reviews. Selected reviews follow:
- “Employees are just customers” Software Engineer (Former Employee), Littleton, MA. I worked at IBM full-time for more than a year. Pros: You can do anything you want since no one is really paying attention. Want a pen? No 'supply cabinet'; order a gross of them online. Want a tech book? Order it from B&N online. Order three. Cons: There are no infrastructure personnel; all are contractors usually in call centers. Tech support problem in Massachusetts? -- call center in India. HR question? -- same call center, but redirected to call center in N Carolina staffed by Fidelity contractors. No answers, no help, no one cares. Advice to Senior Management: Employees are people, not just cost centers. Treat them with respect. The current path to profits is not across the backs of the remaining workers. No, I would not recommend this company to a friend
- “Great people, company headed away from hardware” Hardware Engineer (Current Employee), Hopewell Junction, NY. I have been working at IBM full-time for more than 5 years. Pros: Great people, good work life balance, beautiful area to live in if you like the outdoors. Cons: Hardware division struggling, company wants to be in software and services, shrinking benefits, layoffs and furloughs. Advice to Senior Management: Spend some money on R&D and real growth & innovation rather than tweaking the financials. You have some of the best engineers, give them the resources to excel! Promote your people when they deserve it rather than an arbitrary number/percentage. Bell curve rating system puts employees against each other. I'm not optimistic about the outlook for this company
- “Is no longer, and does not strive to be, a great employer...” Anonymous Employee (Former Employee). I worked at IBM full-time for more than 3 years. Pros: Work-life flexibility; comfortable work place; great colleagues; talented colleagues (though hires are not what they used to be). Cons: Employees who are giving their all to the company not rewarded. Promotions and internal annual evaluation very arbitrary; 360 degree review should be more prevalent and taken into consideration. Separate 'brands' encourage 'civil wars', and the overall solution to the client suffers. Pre-sales and delivery disconnected. Advice to Senior Management: IBMers get the EPS goal, but don't fail to see the woods for the trees. Your employees are and will always be the backbone of your enterprise. It does not have to be an "either or", so take stock of the situation before it's too late; you're losing fantastic talent every single day to your competitors, as employees become more and more demoralised and disengaged from work. Bad managers and an unusually high attrition rate in the department should not go unnoticed. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “Good company to work for when you're starting out” Staff Software Engineer (Former Employee), Research Triangle Park, NC. I worked at IBM full-time for more than 8 years. Pros: IBM is a stable company to work for. It's not going anywhere, and it's not going to get bought out. You can even transfer between different product teams, although a lot will depend upon the state of business and how good your manager is. IBM tries to solve big problems and you'll encounter a lot of smart people trying to solve complex problems. It's a good company to work for so you can learn from other employees, and usually they're more than willing to help. Cons: I felt valued as an employee by my manager and my peers. However, at the corporate level, I felt very unappreciated as an employee, e.g. getting rid of the water cooler to save money. IBM's current strategy is acquiring companies and thereby customers to grow. Organic growth is not happening. Now, the focus is about saving money. Advice to Senior Management: Care about your employees as real people. It's not just the first-level manager's job. It's every executives' job, all the way up to the CEO. No, I would not recommend this company to a friend.
- “The Watson's are probably turning over in their graves” Senior Technical Staff Member (Former Employee), Rochester, MN. I worked at IBM full-time for more than 10 years. Pros: Great talent, greatest colleagues all working on great technologies. Cons: Almost yearly resource actions, which are really US job transfers to cheaper countries in disguise, are making IBM an increasingly more stressful and less desirable place to work. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “IBM Research changing” Senior Software Engineer (Current Employee), Yorktown Heights, NY. I have been working at IBM full-time for more than 10 years. Pros: Good work life balance; many smart people, both in research and as development partners. Cons: Hard to have impact on the business. IBM is trying to adjust to rapid evolution of markets in hardware and software. Hard to get project funding, sources of funding drive projects, more than whether projects make sense. The drive to hit EPS targets is causing a lot of cost cutting and uncertainty in strategy. Acquisition strategy is reducing the importance of research. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “Was a really GREAT company” Sales (Former Employee), Sydney (Australia). I worked at IBM full-time for more than 8 years. Pros: IBM has always been known for its integrity with its business dealings. It is a very creative company churning out many patents. As an employee, you could get access to many systems to help you do your job. Cons: When I talk to my colleagues I share their feeling about IBM and that is it WAS a great company. To me and many other, that company died probably 10 years ago. It is now just a company that competes in many areas. The company is pushing some employees to do unnatural things, whilst in other parts of the business, you wonder who is protecting some employees jobs! Advice to Senior Management: I think the issue is not IBM Australia; the issue is with HQ. So my advise is for HQ. Whoever in HQ is setting the numbers for Australia needs to spend time in Australia and understand the business culture and how to best capitalise on what is in demand. No, I would not recommend this company to a friend.
- “Extremely Poor Employer! (IBM Pakistan)” Anonymous Employee (Current Employee). Pros: – 1) Very strong brand name; 2) Trainings. Cons: 1) No work-life balance; 2) Below average salary packages; 3) Extremely painful expense reimbursement process that involves employee financing working capital for the company; 4) Support departments non-cooperative; 5) Processes are mainly a hurdle; 6) Disrespectful and non-cooperative bosses. Advice to Senior Management: Either pay the employees enough so that they can work 12 hours a day and over weekends or stop expecting that employees would spend 60-70 hour weeks with very low salary packages that IBM offers in Pakistan and also deliver results. In simple words you can't have your cake and eat it too! No, I would not recommend this company to a friend.
- “Multiple Finance Roles” Finance Manager (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: There are pretty good benefits. Many folks can work from home which is nice. And there are quite a few good people that work there. Cons: But, the pay is below average. Yet, they insist they want the best employees and expect that type of performance. So, there is a disconnect between how they pay their people and what they expect from them. It is also very bureaucratic. It is really not worth bringing up new ideas for improvement. Also, very political, meaning the best person isn't getting promoted, but the one with the correct connections. Too often, A-holes seem to get promoted. Advice to Senior Management: Create far more opportunities for promotions based on actual performance, not those sucking up the most. No, I would not recommend this company to a friend.
- “IBM ITD/GTS- Stressful, but great resume builder” IT Security (Former Employee), East Fishkill, NY. I worked at IBM full-time for more than 3 years. Pros: First, let me say that with a company size as large as IBM, it's nearly impossible to get a glimpse understanding of the organization as a whole, since it's so big and covers so many different avenues. This review is specifically for that of their services organization—formally aka ITD, now GTS.
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.
- Great resume builder
- Learn a lot about processes, procedures, audits, internal work within the organization that you can bring to another organization
- It's IBM—chances are, not many have seen what you have seen and can bring to the table (e.g. variety of clients, industries, infrastructures, challenges)
- IBM is still a great company that does many great things, and at times you'll work with some very great people, but the talent pool is declining greatly.
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).
- Very stressful at times
- Continuous cuts and restrictions of OT
- No growth
- Below average pay
- Losing brand image (low skill employees with nothing more than high school diplomas).
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.
- “Average but not great” Architect (Former Employee), Sydney (Australia). I worked at IBM full-time for more than 8 years. Pros: Work from home, large customers. Cons: Very poor management. No annual reviews—your review form is emailed to you and you just need to confirm/submit on the intranet. Hence no feedback from your manager. No training, no promotions, very poor salary increase even if you are a 2+. Do not opt for Band 9 if you are a band 8, because the next time they decide to cut staff, you will be the first to go. Used to be good on your resume but no longer. Advice to Senior Management: No point. They do not listen. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “Hardware function in death spiral” Anonymous Employee (Former Employee), Research Triangle Park, NC. I worked at IBM full-time for more than 10 years. Pros: Great colleagues and flexible working conditions. Cons: Pay below average and falling further and further behind, Management only interested in what boost CEOs bonus this month; chronic short-termism. Not interested in hardware anymore and what growth there is is in countries with very low wages. Advice to Senior Management: Think ahead more than the next quarter and stop grossly underfunding development and abusing employees when you have billions in the bank. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “Another round of layoffs!” Software Sales (Former Employee), Dallas, TX. I worked at IBM full-time for more than 8 years. Pros: The money is good but you miss time with the family. You end up working 60 to 70 hour weeks. Cons: They are constantly changing your job. The don't think twice about laying off people. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “Position not as advertised” Applications Developer (Current Employee), Lansing, MI. I have been working at IBM full-time for more than a year. Pros: -Get to put IBM on your resume. -Not all projects are terrible. -Bureaucratic managers are very hands-off. Cons: -Resource managers will put round pegs in square holes—they exist solely to get you on a project as fast as possible with no regard as to your career aspirations. Babied at services center; absolute bottom-barrel pay. Deceptive management. Lotus Notes. Advice to Senior Management: Respect your employees. No one is motivated when you're paying them pond scum. No, I would not recommend this company to a friend. I'm optimistic about the outlook for this company.
- “At the beginning I was proud to be working at IBM—at the end, ashamed of its ethics.” Marketing Manager (Former Employee). I worked at IBM full-time for more than 10 years. Pros: Plethora of job experiences and technologies, even international. Employee is in the same company yet can have several jobs throughout their career that differ in character and scope.
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.
- “Drop in an ocean” Senior Managing Consultant (Current Employee), Atlanta, GA. I have been working at IBM full-time for more than 10 years. Pros: Has a global reach; Very powerful brand name; Access to broad and deep expertise; Cultural diversity with truly global employees. Cons: No sense of community; feel that you are alone and on your own. Most practice principle of each for himself or herself. Disappointing and deceptive compensation practices—never execute on good bonus or annual comp. Advice to Senior Management: Be truthful and practice what you preach. Stop the bureaucracy. Fixated on just numbers and quarterly results—do not care about delivery. Yes, I would recommend this company to a friend.
- “Solid, but has seen better days” Software Engineer (Current Employee), San Jose, CA. I have been working at IBM full-time for more than 10 years. Pros: Decent employer overall; good for people who can put up with corporate b.s. Cons: Lots of corporate b.s.; people getting ahead tend to be those good at b.s. Advice to Senior Management: Cut the b.s. and stop squeezing employees. No, I would not recommend this company to a friend
- “Process governed” IT Specialist (Former Employee). Pros: - Can rotate to work with different clients and roles; - Competitive compensation in the market; - Different technologies to try. Cons: - Too many processes and less focused on people; - Follow client requirement rather than adding value through its methodologies; - Need to work for long hours; - May work for many years for a band promotion; - Could be dismissed depending on the project. Advice to Senior Management: Do not just focus on profit. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “Great place to start your career as a young professional, but not a long term place of choice” Senior Consultant (Former Employee), Washington, DC. I worked at IBM full-time for more than 5 years. Pros: Great place to start as a college grad; a variety of opportunities within one firm; being proactive and taking initiative is received well; professionals are willing to mentor and take time for informal career dialogue. Cons: Noncompetitive compensation; cut costs on too many employee benefits. Advice to Senior Management: Reward your top performers well with salary and benefits and they will stay. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
- “Great company, going through transformations, but still IBM” Project Manager (Current Employee), Research Triangle Park, NC. I have been working at IBM full-time for more than 10 years. Pros: Great people, good professionalism, access to all sorts of information and education. Cons: Long hours, everything is in crisis, pay is flat, focus on short term profits. Advice to Senior Management: Look more strategically at the future at least beyond next quarter, focus a little more on people management. Yes, I would recommend this company to a friend.
- “This is not the old IBM.” Production Support Analyst (Current Employee), Research Triangle Park, NC. I have been working at IBM full-time for more than 10 years. Pros: It is just a job. Cons: Little job security, salary, or reward. Feel like just a number. Advice to Senior Management: The long term roadmap is not working. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
- “At the beginning of my career, I felt like part of a family, but at the end I felt like a number” Advisory Software Engineer (Former Employee), Research Triangle Park, NC. I worked at IBM full-time for more than 10 years. Pros: The job is fairly stable unless you are a more experienced employee. There are many chances for advancement. My co-workers were very helpful. Cons: The work-life balance has swung to the work side. The employee appraisal system is unfair because all employees are ranked together from top to bottom, and if you are on the bottom you will get a bad appraisal rating even though you do good work. Yes, I would recommend this company to a friend.
- Glassdoor
IBM Canada reviews, Selected reviews follow:
- “IBM is a great company with a lot of red tape” Client Representative (Former Employee), Markham, ON (Canada). I worked at IBM Canada full-time for more than a year. Pros: Amazing brand awareness and depth of product offerings. IBM offers great solutions to a variety of business problems and it is a solid company with a great reputation Cons: A lot of red tape. Hard to do your job because you have a lot of administrative things to do. A lot of time wasted dealing with procedural things instead of getting the sales made. Advice to Senior Management: Stop letting go of your best talent. You lose your best talent to your competitors and then lose market share as a result. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
- “Overall good, but frustrating environment” Software Development Manager (Current Employee), Ottawa, ON (Canada). I have been working at IBM Canada full-time for more than 10 years. Pros: Good salary and benefits. A lot of opportunity to grow technically. In certain positions you can get good customer interaction and feedback Cons: Constant pressure from finance to do more with less. Difficult to get hardware upgrades. Still a lot of silo management. Small annual salary increases. The "average" contributor can end up with no raise. Yes, I would recommend this company to a friend.
- “Good overall experience, wonderful organization to learn from” Sales Executive (Current Employee), Edmonton, AB (Canada). I have been working at IBM Canada full-time for more than 10 years. Pros: Great people to work with. Cons: Executive Dashboard is used to manage business on a day to day basis rather than it's intended use...validating whether the business strategy and objectives are tracking to the business plan. Advice to Senior Management: Less inspection, more coaching. Yes, I would recommend this company to a friend.
- Alliance for Retired Americans Friday Alert. This week's headlines:
- Harry Reid: No Grand Bargain in the Near Future
- Key Negotiator, Rep. Chris Van Hollen, Does Not Want to Reduce Medicare Benefits
- Detroit’s Bankruptcy Trial Begins
- Troubling Trade Deal on the Horizon
- New Hampshire and New Mexico Alliance Chapters Hold Conferences, Elect Officers
News and Comments Concerning ExtendHealth (New Medical Plan for Medicare-Eligible IBM Retirees)
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "Bill K." Full excerpt: Harris, here is an excerpt from the response I received from Dr. Rhee. I posted it here, in its entirety, last week:
"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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "harris_berman" Full excerpt: Let me try to explain why it just isn't that simple. Let's say that you enroll in a Part D plan through EH in 2014 so that you can access the HRA amounts for other eligible expenses. Now, fast forward to 2015 and the Part D plan that you have is no longer on the EH enrollment offerings for your state/zip code. You will now have to select another Part D plan or enroll in an EH offered medical plan to retain the HRA access even though your original enrollment met the criteria for access in 2014. That's what Dr. Rhee documented in his e-mail to me.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "egroups1bp" Full excerpt: Harris: I don't think any drug plans require underwriting. You can terminate a Part D plan at certain times of the year, and start a different one during the open enrollment period 10/15- 12/7.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "harris_berman" Full excerpt: You are correct. Only the medical plans require underwriting. My point was that the Part D plans can (and do) change every year for the premiums, the co-pays and the formularies. EH may or may not offer some of those plans in your state/zip code from one year to the next. So, while underwriting for Part D is not an issue, the OOP can change or a drug that you require is moved to a higher tier or removed entirely from the formulary. That could force a change to your future enrollment to another Part D. One of my drugs moved from Tier 4 to Tier 3 this year (a good thing) so not every change is bad. YMMV
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "ralphninay" Full excerpt: The IRS decides what is allowable but IBM can make restrictions. Here is what I have found on the web:
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by Bob Sutton. Full excerpt: Did you catch the part about those who do not respond and yet are single retirees? Their HRA is reduced as if they were married. These kind of cost reductions broadcast the desperation of the execs to maintain that target EPS at any cost. I have no desire to see IBM tank but with this myopic focus on EPS it's almost guaranteed at some point.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "hankharty". Full excerpt: In this case, the surviving-spousal option letter may be a legal requirement. It is a requirement for pensions if the surviving spouse will receive less than 50% of the benefit. Since the supplement is being treated as an annuity, there may be a legal requirement to get a release from the spouse.
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?
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "madinpok". Full excerpt: Under the FHA plan, the surviving spouse gets the full account balance of the FHA when the retiree dies. I haven't seen anything that says that once the FHA is transferred to an HRA, that would change. Since once IBM makes the transfer to the HRA, I don't think there is any way for them to take anything back. So until IBM says otherwise, I am guessing that the surviving spouse gets the full FHA-HRA balance.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "hankharty". Full excerpt: What was the surviving-spouse benefit before the conversion to EH?
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by Bob Sutton. Full excerpt: If you were on the old plan it was 100%; no reduction at all.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "hankharty". Full excerpt: "If you were on the old plan it was 100%; no reduction at all." Is that for the lifetime of the surviving spouse? If that truly is the case, that is a significant reduction is benefits under the new plan. That is a 26% reduction in benefits for the retiree (reported $2600 vs $3500) and a 63% reduction in benefits for the surviving spouse (reported $1300 vs $3500). Towers Watson pulls another fast one.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "madinpok". Full excerpt: Yes, under the old plan, the surviving spouse continued to receive fully subsidized medical benefits for their the rest of their lives. The change taking place with the move to EH is clearly a reduction, and could be a significant one if the spouse outlives the retiree by more than a few years.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "RONNIE". Full excerpt: In my case (retired in 1995) my spouse could participate in the IBM offered health plans for two years. Then nothing. The new plan is substantially better in my opinion.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by "ranheimchas". Full excerpt: I would never be dumb enough to opt for the spousal option, especially after reading the Legal notice in the letter from IBM dated September 2013 about this. The Legal Notice says "The company reserves the right, it its sole discretion, to amend, change, suspend, or terminate any benefit or other plan, program, practice, or policy of the company at any time." This is telling me that there is are no assurances the plan to pay the spousal option will be available down the road if I passed away. I intend to take the $3,000 for as long as it is available before the plan is taken away.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Spousal option letter" by " chz_whiz". Full excerpt: Hank, IBM would argue that the survivor benefit is now a different calculation. Under the previous plan, benefits were capped at $3,000/$3,500, so the calculation of IBM contribution was $3,000/$3,500 times the number of retiree/survivors. That's the cap...Period. New plan for the lifetime HRA is an expected payment so it's an annuity payable for last to die joint lifetime. Subtle difference, but the argument has some merit. The cap vs expected payout is a creative way to save money, but IBM folks have always been creative in saving money (for the company).
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "What are the rules on offerings within a single state from ExtendHealth?" by "fstephens". Full excerpt: It appears the plan offerings from Extend Health vary by county with a state. Is this legal, as I thought they operated as State Exchanges within a state? Delaware offerings are a good example. Cities that split two counties have different offerings based on which county you select (ZIP of 19963 is a good example). Also, cities in different parts of DE have dramatically different offerings (compare ZIP of 19963 Sussex County vs 19802 - New Castle County).
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!
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: What are the rules on offerings within a single state from ExtendHealth?" by "lobosphoto". Full excerpt: If insurance in DE varies by location then that is exactly the way EH sells it.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: What are the rules on offerings within a single state from ExtendHealth?" by "redrock_5432". Full excerpt: Extend Heath is an agency. The observations you have made are the attributes of the policies offered by insurance companies in the open market. EH is merely selling them.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: What are the rules on offerings within a single state from ExtendHealth?" by "hdttraveler". Full excerpt: "It appears the plan offerings from Extend Health vary by county with a state. Is this legal?" Yes. Not only legal but typical. As an indication, the first question asked on the Medicare.gov site in the Medicare supplement section is what is your ZIP code. Note they don't ask what is your state.
So quotes by county or ZIP code are not some contrivance by Extend Health.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: What are the rules on offerings within a single state from ExtendHealth?" by EG Fine. Full excerpt: Can vary by county, or city (by ZIP code). We have one highway that determines which BC/BS company processes claims on the FEHB program (not a Medigap policy but I use it as such) – if you’re on the east side, one company processes a claim; if you’re on the west side, a different company processes it!
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Plan Administrator address" by Jack Butler. Full excerpt: The November 2013 Consumer Reports has a major article on health insurance, including ratings of companies offering "private health plans" and "Medicare Advantage health plans." It does not include all states. For example, in Connecticut, it gives two Aetna plans and one Oxford Health plans high marks. It also gives rankings for other elements of each of companies in Connecticut.
- Yahoo! IBM Retiree Information Exchange message board: "RE: HRA Survivor Decision" by Ralph H Ross. Full excerpt: I’m lucky in that both spouse and I both are retirees. One of us is 66 and the other 62. I will see next month the differences between the coverage and costs and will update the group. Of course I already see that Dental is pretty much been eliminated. I do hope the HRA continues but my gut tells me that next year we will both be in the Extended Health loop even though one of us will not be Medicare yet. So all retirees and I think eventually even active employees will soon not be covered by a work policy – maybe just the Sr executives will get company benefits. I don’t like it but the writing is on the wall. More later...
- Yahoo! IBM Retiree Information Exchange message board: "RE: HRA Survivor Decision" by "grandpafromli". Full excerpt: Like someone else that mentioned it, I believe IBM will shaft us even more in the future, probably in the next year or two. Take the $3000 and run, because this offer is like the frog being slowly heated. We are being slowly heated and eventually will find no help from IBM. IBM has become even more vicious than other companies, if that is possible.
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.
- Yahoo! IBM Retiree Information Exchange message board: "RE: HRA Survivor Decision" by "Michael". Full excerpt: Consider Rhee's statement may not have been a lie, just misleading. For 2013 IBM gave me 9 plans to choose from. I picked the Aetna Medicare Advantage PPO. For 2014 IBM is still giving me that one plan to choose from; the "choice" is take it or leave it. So if I decide to go with EH instead of IBM for 2014 I will have many more plans and options to choose from.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Tier 5 drugs" by "mtaquilts". Full excerpt: I'm new to this site but have been on Medicare and United Health with CVS Caremark through IBM for my drug (Enbrel for Rheumatoid arthritis.) I am just about worn out trying to find a "Part D drug plan that is affordable. There seems to be none. With going through the donut hole, the plans will cost $4000. a year +/-. I am at a loss. Will have my "conversation" with EH next week, but they were clueless as to even what drug I was taking. Any suggestions or help would be appreciated. I will be seeing my insurance agent next week. Thanks for any info.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Tier 5 drugs" by "namremf". Full excerpt: Mention to EH it is also called Etanercept. Check price at Costco, too; membership not required. Click http://www.enbrel.com/pay-for-ENBREL.jspx
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Tier 5 drugs" by "mtaquilts". Full excerpt: I contacted Enbrel support. I have been on their plan for a few years. Once you go on a Part D Rx plan, you are no longer eligible for Enbrel support. This has been mandated by Medicare, not the Enbrel program. If you don't get a Part D drug plan, you have no coverage at all.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Tier 5 drugs" by "Penny". Full excerpt: I'm not so sure it is true that Medicare mandates what a pharmaceutical company can and can't do re eligibility for one of the company's indigent drug programs. My understanding is that these companies do not want to "give away" drugs to anyone but the most desperate (actually, they probably don't want to give away any drugs at all, but these programs make them look better to the public).
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).
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Tier 5 drugs" by "Matt". Full excerpt: Check out silverscript. I used them last year and only had to pay for tier 2 drugs. All of the rest were $0. I am going to use them in 2014 and the cost is $33.80 a month.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Tier 5 drugs" by "chz_whiz". Full excerpt: Keep in mind the Plan N doesn’t include the Part B deductible of $147, the E/R deductible of $50, or the (up to) $15% excess which will, I suspect become MUCH more prevalent as Medicare allowables get even more pressured.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Tier 5 drugs" by "netmouser". Full excerpt: I read, "The largest Medicare supplement company by members is the United Healthcare AARP supplement. Their most popular plans are the Plan F and the Plan N."
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "States that don't allow Excess Charges" by "hdttraveler". Full excerpt: The following states do NOT allow any excess charges no matter what, due to the MOM Law (Medicare Overcharge Measure): Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island and Vermont.
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/
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: States that don't allow Excess Charges" by "netmouser". Full excerpt: Your example is extreme and really untrue. The excess above Medicare rates is for the doctors (Part B services), not hospital where the big charges are and probably most of your $100k example.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: States that don't allow Excess Charges" by "hdttraveler". Full excerpt: netmouser, I started to pen a point-by-point aggressive rebuttal to your post, but aborted it.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: States that don't allow Excess Charges" by "netmouser". Full excerpt: hdttraveler, you are right, a $2000, or any, doctor bill out of pocket can be a burden. A specialist you prefer for a very expensive illness may charge excess. Or they may not accept Medicare at all, and you pay by contract the full amount.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: States that don't allow Excess Charges" by "hdttraveler". Full excerpt: netmouser, "hdttraveler, you are right, a $2000, or any, doctor bill out of pocket can be a burden." Well, that's kind of obvious and strikes me as rather dismissive. For folks in the states I listed, there is NO burden for excess charges if they select Plan N. And I suspect the vast majority of them (including me) did not know that a few days ago.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: States that don't allow Excess Charges" by "Bill K.". Full excerpt: Hdttraveler, you are making an abstract argument, unsupported by any real world data, that is likely to have real consequences for some people who are having trouble sort all of this stuff out. This stuff is complex. If people cant sort it out, they will be afraid and will likely get over-insured and waste money.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Prescription Drug Plans - Retail versus Mail-in Costs" by "retiredyeah". Full excerpt: Interesting discovery that Aetna does not support the ability to analyze the difference in retail prescription costs versus mail-delivery option. Most of the other providers (Cigna, UHC, etc) directly support it in one many or the other.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Escalating Tiers" by "dickberr". Full excerpt: Anyone else notice how some drugs (Celebrex in my case) keep moving up a tier? AARP Part moved it from Tier 3 in 2013 to Tier 4 in 2014. I'm pretty sure it used to be Tier 2. Looks like they are trying to milk it for all it's worth before the patent expires (expiration now extended to 2015).
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Comments on the survivor coverage letter" by "ileftibm". Full excerpt: heir absolutism is muddled. First page, fifth paragraph from the bottom says: "Your decision is final and irrevocable."
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 "mr_quarkwrench". Full excerpt: Yup, all that's true but the part that I noticed was the part that indicates the amount that will be put in your dependents HRA can change. What do you want to bet it won't go up? I'm not convinced that giving up part of my $3000 now is worth is so my spouse can get some unspecified amount in the future.
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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?
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Comments on the survivor coverage letter"
by "EG Fine". Full excerpt: Notarization is rather common on this type of financial form – just be glad it’s not a medallion guarantee (fewer institutions do that)! I’ve found that banks and credit unions in my area don’t charge for notarization if you’re a customer. Sometimes a neighbor will be a notary. We’ve got one in our community association, too. The whole idea is to provide some measure of protection for you – what if someone stole your form and signed it and sent it in – you could lose about $600 per year from your HRA. (You might be able to unwind such a transaction, but it would probably be a major hassle.)
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Comments on the survivor coverage letter" by "EG Fine". Full excerpt: It’s not 50% survivor benefit – it’s less than that. And if someone has no dependents (actually just a spouse), if the form weren’t mailed to you, that would guarantee the $600-something reduction, to no purpose.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "HRA Contribution Usage" by "Theodore". Full excerpt: Can anyone validate that you can buy a medical plan OUTSIDE of EH and still be able to use the HRA funding of $3,000/$3,500 to pay for the medical plan outside of what EH offers. The original Announcement Newsletter from EH clearly states "You must enroll in a medical plan through Extend Health to receive an HRA contribution". I called EH and they told me IBM gave the OK around 10/15/2013 to go outside for medical plans that EH offers if you didn't like any of the plans. I have not seen anything in writing from IBM or EH so I'm skeptical. Why wouldn't IBM notify the Medicare Eligible Retirees if this is the case so we have documentation if EH doesn't fund claims to be paid from plans outside of what EH offers.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: HRA Contribution Usage" by "EG Fine". Full excerpt: Go re-read the last dozen postings on this subject. As long as you purchase a medical OR A DRUG PLAN from EH you will “unlock” the $3,000/$3,500. Lowest cost drug plan where I live is $12.60. You can then use the HRA funds to reimburse other medical expenses, including medical plan premiums.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: HRA Contribution Usage" by "samuel". Full excerpt: Nothing official has come from IBM on this topic an i have been told different answers from "sources" so will still wait and see.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: HRA Contribution Usage" by Harris Berman. Full excerpt: The question was about making a decision in the present without the plan document or SPD being available. I wonder how closely those documents will be consistent with the verbal representations of the EH regarding their interpretation of the IBM e-mails which they do not publish either on the EH website or communicated via USPS mail. There is a difference between access to the HRA and a valid claim for reimbursement. We'll just have to see what it is in January after everyone has signed up before Dec 31, 2013.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: HRA Contribution Usage" by Bary Shaw. Full excerpt: I still have to understand the logic smart IBM executive has created.
- HRA amount should be spend for you and your spouse medical insurance coverage.
- We have to buy at least one coverage from them to get HRA.
- Now HRA is reduced.
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?
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Make sure you use it ALL" by "lastdino1". Full excerpt: There are many decisions going on as well as how to determine what is the least costly plans to take. Just make sure after all of the smoke is clear that those of us that fall into the subsidy that by year end 2014 you use up ALL of the money in the bucket. Consider that IBM is hoping you'll take the cheap plans and take the spouse option so they will have a large bucket of left over blue dollars. I remember when we used to do budgets: if you didn't use it all you got less the following year. Could that ever happen?
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: What does the higher price buy?" by "netmouser". Full excerpt: An article from Consumer Reports—everyone pays the same premium for a Medicare Advantage plan. Age does not matter and does not raise the premium. http://www.consumerreports.org/cro/news/2013/10/is-medicare-advantage-the-same-as-medigap/index.htm.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Medicare Advantage without drug coverage?" by Bill Courtney. Full excerpt: I did call back and after a wait I got to someone that explained that the plans without drug coverage were specifically for people that had creditable drug coverage from other Federal insurance programs. These are VA, Tricare, Federal Employees and Indian Health Services. So the earlier post that these no drug coverage plans were for the military was right. I eventually found on the medicare.gov website a list of those groups. (See also p101 of Medicare and You.)
I am back looking at what my new options are!
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Medicare Advantage without drug coverage?" by John Butler. 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.
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.
- Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Medicare Advantage without drug coverage?" by "johnp0793". Full excerpt: Echoing Jack's points, below. Those of us who are computer literate, used to making comparisons, and somewhat comfortable with complexity will probably come out OK. Those who are not may be in trouble. If everything goes well, EH counselors will probably lead this second group to a reasonable answer. The hope is that those of us in the first group, by investing some time and effort, will be able to navigate to a better set of plans than we would find from just talking to an EH counselor, but at the cost of some time spent reading posts like this one and running comparisons on Medicare and other web sites.
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.
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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.
- Yahoo! IBM Retiree Information Exchange message board: "RE: Seniors Cautioned To Pay Close Attention To Details As Enrollment Begins" by "grandpafromli". Full excerpt: Agreed. I found the AARP MedicareRx Saver Plan D saved us the most money. The Medicare.gov site has a pretty good utility to find the best plan. For instance, for my wife, the AARP plan ended up with a total drug cost of $2900, while the Human Preferred plan(previously called Humana Walmart preferred, ended up with a total drug cost of over $4,500. Quite a difference, and the AARP program is slightly cheaper than the Humana plan, around $22.50 a month.
- Yahoo! IBM Retiree Information Exchange message board: "RE: Seniors Cautioned To Pay Close Attention To Details As Enrollment Begins" by Don Smith. Full excerpt: I signed up for the AARP Medicare RX Saver, but only put in one of my 2 drugs (the system was running very slowly). After completing my EH call, I went back and reran the “D” planner with my other drug. To my amazement the generic-non preferred drug (ramipril) that I take was NOT on their formulary list. Instead of typically costing $6 per month, it was going to cost $60 per month. I verified this by calling AARP. So I called EH back and they were very good at canceling the AARP plan for me, and signing me up for Humana-Walmart. It pays to make sure all your meds are run in the “planner”.
- Yahoo! IBM Retiree Information Exchange message board: "RE: Extend Health choice" by "grandpafromli". Full excerpt: One of the nice things about the AARP Medigap plans is the discount if you are an AARP member. If you are not, JOIN. You get a 3% discount which is age based. If you are 65, you get a 30% discount, 66 gets a 27% discount, and so forth, basically (75-your age) times 3. For me, my monthly premium was 152, and my wife's was $140. In addition, if you opt to have the premiums taken out of your checking account, there is an additional $5 family discount per month.
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.
New on the Alliance@IBM Site
Job Cut Reports
- Comment 10/20/13: Now that IBM Management's "Chinese Adventure" has failed miserably, it should be painfully obvious, even to IBM's clueless Senior Management, that the intent of the Chinese Government had always been to have their agents infiltrate IBM posing as employees so they could steal IBM's Intellectual Property and Technical/Business Know-How, and set up a competing Chinese IT Industry. Through a series of misguided and greed-driven decisions, IBM Management has not only done a terrible disservice to the IBM Corporation, but to the United States of America as well. -Absolutely Disgraceful-
- Comment 10/21/13: IBM missed targets in Q3 but instead of focusing on innovation and understanding how to turn it around, we waste enormous time filling out pointless internal spreadsheets and attend pointless meetings because management needs to report daily on signings, gross profit improvements, etc. -Cindy-
- Comment 10/21/13: Has anyone heard of the RUMORED plan to announce at the end of October that those eligible for the OLD RETIREMENT PLANS MUST RETIRE UNDER THE OLD RETIREMENT PLAN BY YE2014 OR BE CONVERTED TO A CASH BALANCE PLAN ONLY ! It will be interesting to see if they try and use the PHONY 1999 Conversion algorithms, which were a total RIP-OFF, or not. -Huggie-
- Comment 10/21/13: Just heard about STG salary plan. Said intent to pay to 90% of market pay. Is this for real? Anyone else heard similar? Sounds like they're trying to have everyone leave. This and furlough not a good sign. -amazed-
- Comment 10/23/13: STG in the UK appears to be notifying select people of pay increments. It looks like the same select few again. Management are trying to keep this off the radar. Has anyone else noticed 1-2-1 meetings happening out of the blue? This company is nothing but a joke. -anonymous UK-
- Comment 10/23/13: Responses probably can and will be held against you. "Beginning the week of October 28, you will have the opportunity to participate in a first-of-its kind assessment -- the IBMer Engagement Survey. IBM defines engagement as the extent to which IBMers are motivated and energized working for IBM and are willing to drive toward organizational goals." -Anon-
- Comment 10/23/13: If you want to see why IBM lost to Amazon for the Gov Cloud contract, see the chart on pg4 of this gov report. Among other things IBM scored Marginal for their technical approach. I wonder if this has anything to do the fact that IBM has axed many of it's most talented employees in the US. http://www.gao.gov/assets/660/655241.pdf -guesswhat-
- Comment 10/24/13: New salary plan re: market based adjustments. It used to be, if you were below the midpoint, you were eligible for market based adjustment. New plan -- you have to be 10% or more below midpoint. From a reliable source. -ThisJustIn-
- Comment 10/24/13: -guesswhat-: IBM's biggest mistake was believing its own bullshit about being able to put intangible gifts like creativity, innovation, and agility in a can - aka a *process* - in hopes of dumping it as needed on lesser beings in hopes of duplicating past technical success. And while no amount of process can make human beings innovative, it takes very little process to kill the spark of true innovators. -sparkless-
- Comment 10/24/13: STG is cutting 1000 contractors tomorrow and several thousand more over the next 45 days. Good luck everyone. -STG Annon-
- Comment 10/24/13: MBA just out ranging from 1.3/% to 1.6 /% depending on dept.....No ESP for UkI Has anyone heard any different in Uk....? -Operation road kill-
- Comment 10/24/13: Amazed, Also told 90% is the desired level. Ginnie's 'pay for performance culture' is bull. 2+ performer at 100% of grid means no merit raise or MBA for me. -Albany is now Fishkill North-
- Comment 10/25/13: So anybody else heard about their market base increase? From what I understand it is yet another joke. They went thru the exercise to identify those that are below market base and submitted their proposals only to find out that there was no money given for this program. So if GBS/AIS is not getting market base, who IS? -MarketWhat?-
- Comment 10/25/13: STG laying off contractors today... Don't know the numbers, but I personally know 5 contractors who were laid off today -Anonymous-
IBM Retiree Issues
- Comment 10/23/13: My wife just went through a dental implant, back in early September, in order to prepare for a custom abutment and cap for it. We had the Met Life group dental plan, which covered both the implant and the cap and abutment at 50%. The dentist will not agree to the cap and implant until January, because he says the implant and gum need time to heal. Fair enough. Now there is absolutely NO dental insurance available that will cover this work, and yet we were pre-approved for it by Met Life. I understand that legally there is nothing we can do about it, other than try to save for this $2100.00 expenditure. -grandpafromli-
How Does the Furlough Affect You & Your family
- Comment 10/21/13: New salary plan, pay up to 90% market pay. What? Announce they're paying less than anyone else? Thats a great way to retain good employees. Its a dare. -amazed-
- Comment 10/23/13: Germany: Contractors at IBM Deutschland Business Services GmbH were forced into 13 days furlough in the last quarter. -SP-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
- Denver Post: Colorado Medicaid has seen more success in Obamacare launch numbers. By Michael Booth. Excerpts: Despite glitches of its own with long forms and delayed queries, Colorado Medicaid has a boom of applications for its half of the Affordable Care Act launch receiving troubled reviews elsewhere
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.
- Washington Post opinion: Don’t give up on the uninsured. By E.J. Dionne Jr. Excerpts: Obamacare is working.
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.
News and Opinion Concerning the "War on the Middle Class"
"It is a restatement of laissez-faire-let things take their natural course
without government interference. If people manage to become prosperous, good. If they starve, or have no
place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility
of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better
hunger than dependency, better sickness than dependency."
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
- New York Times editorial: Ted Cruz Takes On the F.C.C. Senator Ted Cruz, a Texas Republican who helped engineer the recent government shutdown, has a new target for his obstructionism: the Federal Communications Commission. Last week, Mr. Cruz blocked the Senate from considering the nomination of Tom Wheeler to lead the commission — a candidate who leaders from both parties had agreed would be put up for a vote without delay.
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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