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News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

• New York Times: Even the Insured Feel Strain of Health Costs. By Reed Abelson and Milt Freudenheim. Excerpts: The economic slowdown has swelled the ranks of people without health insurance. But now it is also threatening millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs. Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be — often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments. ...

  Shirley Giarde of Walla Walla, Wash., was not prepared when her husband, Raymond, suddenly developed congestive heart failure last year and needed a pacemaker and defibrillator. Because his job did not provide health benefits, she has covered them both through a policy for the self-employed, which she obtained as the proprietor of a bridal and formal-wear store, the Purple Parasol.

  But when Raymond had his medical problems, Ms. Giarde discovered that her insurance would cover only $22,000, leaving them with about $100,000 in unpaid hospital bills. ...

  Experts say that too often for the underinsured, coverage can seem like health insurance in name only — adequate only as long as they have no medical problems. “There’s a real shift in the burden of health care to people who happen to be sick,” said Paul B. Ginsburg, the president of the Center for Studying Health System Change, a research group in Washington. ...

  After Brian Falacienski of Milton, Fla., was laid off last year from his job as a surveyor for a construction company, he found another position. But the cost of his new health plan — $800 a month for coverage with a $1,000 annual deductible — was beyond the means of Mr. Falacienski, 38, who is married and has a 2-year-old daughter.

  His wife, Marianne, started researching individual insurance policies and was able to find policies for her husband and daughter offering basic, if minimal, coverage, costing $161 a month for father and daughter. But Ms. Falacienski, 32, who has arthritis and the severe digestive disorder Crohn’s disease, is now uninsured. Because of her conditions, she said, four major insurers rejected her.

• Physicians for a National Health Program: Providing health care for all shouldn't make insurers rich. By Milton Fisk and Kay Mueller. Excerpts: Government subsidies and outsourcing may be good for business without always being good for the public. Medicare outsources the administration of its prescription drug program, Medicare D, to private insurers. Medicare Advantage — Medicare C — subsidizes managed care insurance plans for seniors choosing them. Several current presidential aspirants — Clinton and Obama — would subsidize the purchase of insurance for the low-income uninsured. Each of these plans offers private insurers protection against a less wasteful plan, one that does without private insurers. Involving the insurers in the Medicare drug and Advantage plans is a needless drain of Medicare funds.

  The drug companies charge much more for the drugs used under Medicare D than they do for the same drugs bought by Medicaid. The law forbids Medicare to negotiate prices of Medicare D drugs with the pharmaceuticals. Medicaid bargains a 30 percent discount on drugs while the insurers running Medicare D bargain only a 5 to 10 percent discount. Medicare C’s Advantage Plan turns over managed care to private insurers, paying them 10 to 12 percent more than Medicare pays for seniors in its regular program.

  Suppose one of those presidential aspirants wins. What would the subsidies they want cost? They want subsidies to help at least the poorest two-thirds of the 47 million uninsured buy insurance. The insurers would be in for a windfall injection — from the government and low-income individuals — of about $150 billion each year. Any industry would love this. But would it serve the public interest?

• Los Angeles Times: Getting married for health insurance. Seven percent of Americans say they or someone in their household decided to tie the knot in the last year so they could receive healthcare benefits, a poll finds. By Ricardo Alonso-Zaldivar. Excerpts: On a broader scale, the survey found that healthcare costs outranked housing costs, rising food prices and credit card bills as a source of concern. Twenty-eight percent of those surveyed said they had experienced serious problems because of the cost of healthcare, compared with 29% who had problems getting a good job or a raise. Gasoline prices were the top economic worry, with 44% saying they had serious problems keeping up with increases at the pump. ...

  But with employer-based health insurance averaging $12,000 for family coverage and $4,500 for individuals, the public concern with costs is understandable. Nearly a fourth of Americans said they had decided to keep or change jobs in the last year because of health insurance. What surprised researchers was that such costs had become a factor in marriage decisions. "We should have asked about divorce," said Altman, joking.

• New York Times: Study Warns Job Losses Will Strain Government Health Programs. By Kevin Sack. Excerpts: Leading health researchers projected Monday that each percentage-point rise in unemployment during the economic downturn would swell the uninsured by 1.1 million, stoking demand for government health coverage just as states face pressure to cut benefits. ...

  The number of uninsured Americans has grown relentlessly in good times and bad this decade, and now stands at 47 million, or 16 percent of the population. Mr. Holahan said the increase projected by his team would be in addition to the growth normally expected from rising insurance costs and the erosion of employer-sponsored coverage. ...

  The study projected that each rise in unemployment of one percentage point would also add 600,000 children and 400,000 adults to the two primary state and federal health insurance programs for the low-income uninsured. That would require an additional $3.4 billion for Medicaid and the State Children’s Health Insurance Program, with $1.4 billion of it from the states. ...

  The downturn is already having an impact on the economics of health care. The Kaiser foundation found in a poll this month that nearly 3 in 10 of those surveyed said they or their families had a serious problem paying for health care because of the economy. The frustration was evident at all levels, with 28 percent of middle-income respondents saying health costs had become a serious problem.

  In the poll of 2,003 adults, which had a margin of error of plus or minus three percentage points, 42 percent of respondents said that in the past year they or a household member had forgone some kind of medical care because of cost. Twenty-four percent said they had skipped a recommended test or treatment, up from 17 percent in 2005.

• Washington Post: McCain Offers Market-Based Health Plan. By Michael D. Shear. Excerpts: Sen. John McCain on Tuesday rejected calls by his Democratic opponents for universal health coverage, instead offering a market-based solution with an approach similar to a proposal put forth by President Bush last year. McCain's belief in the power of the free market to meet the nation's health-care needs sets up a stark choice for voters this fall in terms of the care they could receive, the role the government would play and the importance they place on the issue. ...

  McCain's proposal is similar to one that Bush put forth in his 2007 State of the Union address. That plan, which would have replaced employer tax breaks for health insurance with a $15,000 tax deduction for married couples, flopped in Congress, failing to get even a committee hearing. McCain's plan is aimed primarily at giving individuals the power to make health-care decisions by granting the same tax breaks for insurance whether workers get a policy from an employer or on their own. Aides call it a "radical" rethinking of health care that would drive costs down and give people more choice.

  But it also leaves McCain open to criticism that he is not doing enough for the poor and sick, who could face steep premiums and limited choices as they search for an insurance company willing to cover them. Critics of McCain's plan said it would do little to help people already struggling with health-care costs. Unlike his Democratic opponents, for instance, McCain would not mandate coverage for people with preexisting conditions who have not already been covered by a company health insurance plan. Critics say that would leave millions of people without coverage.

• New York Times: Federal Money in Health Care Plan From McCain. Excerpts: Senator John McCain detailed his plan to solve the nation’s health care crisis in a speech here Tuesday, calling for the federal government to give some money to states to help them cover people with illnesses who have been denied health insurance.

  Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals, to foster competition and drive down prices. To do so he is calling for eliminating the tax breaks that currently encourage employers to provide health insurance for their workers, and replacing them with $5,000 tax credits for families to buy their own insurance. ...

  Elizabeth Edwards, the wife of former Senator John Edwards, recently pointed out that both she and Mr. McCain could be left uncovered by Mr. McCain’s plan because she has cancer and he has had melanoma. Stung by such criticism, Mr. McCain is trying to develop a way to cover people with health problems while still taking a generally market-based approach to solving the health care crisis. ...

  For people who currently get health insurance through their jobs, Mr. McCain’s plan would give them a tax credit that they could put toward buying a different, and potentially less expensive, health insurance plan tailored to their needs — and allow them to keep that health plan, and their doctors, even if they switch or lose their jobs. But Democrats and some experts said the proposal might lead some employers to stop offering health insurance, and questioned whether the tax credit would cover the cost of private insurance.

  Unlike Mr. McCain, of Arizona, Senators Barack Obama of Illinois and Hillary Rodham Clinton of New York would make it illegal for health insurance companies to deny an applicant because of health status. They argue that such regulation is needed to end discrimination against those with pre-existing medical conditions.

  Mr. McCain’s speech here implicitly acknowledged some of the shortcomings of his free-market approach. But rather than force insurers to stop cherry-picking the healthiest — and least expensive — patients, Mr. McCain proposed that the federal government work with states to cover those who cannot find insurance on the open market. With federal financial assistance, his plan would encourage states to create high-risk pools that would contract with insurers to cover consumers who have been rejected on the open market. ...

  Some health care experts question whether those tax credits would offer enough money to pay for new health insurance plans. The average cost of an employer-funded insurance plan is $12,106 for a family, according to the Kaiser Family Foundation, a health policy group. Paul B. Ginsburg, the president of the Center for Studying Health System Change, a nonpartisan research organization financed by foundations and government agencies, said, “For a lot of people, the tax credits he’s talking about would not be enough to afford coverage.”

• Robert Wood Johnson Foundation: Squeezed: How Costs for Insuring Families are Outpacing Income. Excerpt: This article reveals how the cost of family health insurance nationwide is increasing dramatically for employees without anywhere near an equivalent increase in family income. If this trend continues, more workers are likely to become uninsured because of the expense.
• Henry J. Kaiser Family Network Foundation: Employer-Sponsored Health Insurance Premiums for Family Coverage Rose 10 Times Faster Than Income, Report Finds. Excerpts: According to the report, what workers paid toward premiums for family coverage increased 34.6% from $1,921 in 2001 to $2,585 in 2005, while median family income rose 3.1% from $40,818 to $42,068 during the same period (Washington Post, 4/29). The report also found that the percentage of health insurance premiums covered by employees increased to 24.1% in 2005 from 23.2% in 2001 (Park, Arkansas Democrat-Gazette, 4/29). In addition, the number of people with private coverage dropped by about 6% from 2001 to 2005, while the number of private-sector employers that offered health insurance declined by 0.8%, the report found (St. Paul Pioneer Press, 4/28). Premium increases contributed to 2.4 million fewer U.S. residents with private health coverage in 2005 than in 2001, according to the report.
• Wall Street Journal: HSA Users Find Hassles Amid Savings. Upfront Medical Expenses, Paperwork Surprise Holders Of High-Deductible Insurance. By M.P. McQueen. Excerpts: High-deductible insurance plans paired with health-savings accounts -- so-called HSAs -- are a centerpiece of Republican presidential candidate John McCain's platform, even as the Democrats aim for universal health care. But new scrutiny of the plans, and the experience of people who have begun using them, are highlighting a number of challenges HSAs face in truly winning over consumers.

  A report released Wednesday by the Government Accountability Office, the investigative arm of Congress, found that HSA users were much wealthier than people covered by other types of plans, based on 2005 tax data. "HSAs clearly are attractive to higher-income people who are looking for tax shelters. But they aren't the answer for providing adequate health-insurance coverage for the average American," says Rep. Henry Waxman (D., Calif.), one of the congressmen who requested the report. ...

  Self-employed attorney Jonathan Stein, 34, of Elk Grove, Calif., got an HSA in 2005. Because he is responsible for paying the entire bill, he didn't go to the doctor for a recent bout of flu and doesn't get annual physicals despite a family history of heart disease and cancer. "My doctor and I fight about that when I do see her because she wants me to come in every year," Mr. Stein says. "If it was covered by insurance I'd probably go." ...

  Bill Greene, 61, a retired surgeon in Myrtle Beach, S.C., looked into opening an HSA at a full-service brokerage, but he says the fees were too high, including $50 transaction fees per trade, and fund choices were limited. Dr. Greene searched online and decided to open an account at Sovereign Bancorp Inc. because it charged lower fees and offered some no-load mutual funds. A Merrill Lynch spokesman says the brokerage currently is waiving its maintenance fee of $50 to $100 for new HSAs. As for transaction fees, he says, "as a full-service provider, we feel that fees are commensurate with services."

• Bloomberg News, courtesy of the Arizona Daily Star: Health-plan details elude most Americans. 55% in survey fuzzy on critical aspects of coverage. By Justin Blum. Excerpts: Fifty-five percent of U.S. health-plan members don't fully understand "critical details" of their insurance coverage, including prescription benefits, how to find the right doctor and appeal-coverage denials, a survey found. ...

  "Health care is very complicated in our country, and the process of accessing it is very complicated," David Stefan, executive director of J.D. Power's health-care practice, said in an interview. "When you get materials from a plan, they're written to be complete and, in some cases, almost legal-like agreements, and they can be very hard for members to understand."

• Physicians for a National Health Program: An Open Letter To The Candidates On Single Payer Health Reform. Excerpts: America's health care system is failing. It denies care to many in need and is expensive, error-prone, and increasingly bureaucratic. The misfortune of illness is often amplified by financial ruin. Despite abundant medical resources, care is often inadequate because of the irrationality of our insurance system. Yet our political leaders seem intent on reprising failed schemes from the past, rejecting the single payer national health insurance model that is the sole hope for affordable, comprehensive coverage.

  Leading Republicans propose tax incentives to encourage the uninsured to buy coverage, but these subsidies fall far short of the cost of adequate insurance. For cost control, they suggest high co-payments and deductibles. Yet these selectively burden the sick and poor, discourage preventive and primary care, and have little effect on costs, since seriously ill patients - who account for most health spending - quickly exceed their deductibles and are in no position to forego expensive care.

  Most leading Democrats offer a mandate model for reform. Under this model, the government would require people (or their employers) to buy private coverage, while offering an expanded Medicaid-like program for the poor and near-poor. ...

  Mandates and tax incentives can add coverage only by increasing costs. They augment the role (and profits) of private insurers, whose overhead is four times Medicare's, and whose efforts to avoid payment impose a costly paperwork burden on doctors and hospitals. The cost cutting measures often appended to such reforms - computerization, care management and medical prevention - have repeatedly failed to yield savings.

  In contrast, single payer reform could realize administrative savings of more than $300 billion annually - enough to cover the uninsured, and to eliminate co-payments and deductibles for all Americans. It would also slow cost increases by fostering coordination and planning.

  Political calculus favors mandates or tax incentives, which accommodate insurers, drug firms and other medical entrepreneurs. But such reforms are economically wasteful and medically dangerous. The incremental changes suggested by most Democrats cannot solve our problems; further pursuit of market-based strategies, as advocated by Republicans, will exacerbate them. What needs to be changed is the system itself.

  We urge our political leaders to stand up for the health of the American people and implement a non-profit, single payer national health insurance system.

• Huffington Post: The True McCain Health Plan: Wealth Transfer From Voters to Corporations. Excerpts: How would this transfer of wealth take place under the McCain plan? First, its important to note that most under-65 Americans with health coverage receive that coverage through their employers. The employers who provide health benefits aren't small businesses - they're medium to large companies. While these companies receive a tax break for providing coverage, it isn't enough to cover their costs.

  What would the McCain plan do for them? First, it would destroy the employer-based system by eliminating tax breaks for companies that offer health care. As a result, nobody would have employer coverage anymore. Since businesses are paying far more in premiums than they're been getting in tax breaks, they'll save an enormous amount of money. But unlike Sen. Ron Wyden's plan, for example, the McCain plan would not require these employers to give this sudden windfall back to their employees as salary increases. America's businesses would enjoy a huge reduction in expense without being asked to give anything back.

  In return, individuals and families would be given tax breaks to go out and buy their own health coverage, but without the buying power of larger employers. So here's what's likely to happen in the real world under the McCain plan, based on what we've learned so far:

  1. If a family gets a $5,000 tax break but the typical family premium is $12,000, they'll either pay $7,000 out of pocket or go without coverage.
  2. People with pre-existing conditions won't be able to get private coverage.
  3. McCain will encourage the states to take on people with pre-existing conditions by creating "high-risk pools."
  4. But high-risk pools at the state level haven't worked very well. So people with pre-existing conditions will either go without insurance, remain uninsured, or state taxes will skyrocket to cover their costs. That means even more money out-of-pocket for individuals, in the form of higher state taxes.
  5. Cost controls on premiums are sketchy. That means the $12,000 average premium will probably go up, too.

  The end result? More out-of-pocket expenses for individuals, terrible difficulties obtaining coverage if you have a pre-existing condition, and an enormous financial break for larger American businesses.

New on the Alliance@IBM Site:

• Spotlight: As the Alliance@IBM CWA Local 1701 begins its Spring membership drive you need to know some hard facts.

  The Alliance has been losing members due to retirement, job loss and employee financial difficulties. This web site receives an average of 40,000 visitors a month.

  Tough economic times are obvious; however, we simply can not go on or take employee advocacy to higher levels if we don't build our dues paying membership. It is not just this web site: It is an office and an organization that is at stake. Our staff of 1 full time, 1 part time and volunteers/members are dedicated to building this organization; but it is up to YOU to see that we are able to keep the office open and the organization financially viable. We need to become financially independent--We can not continue to rely on being financed by non-IBM CWA members. IBM employees need to support their own organization!

  Frankly if IBM employees do not see the value of this employee organization then the future of our work is in jeopardy.

  Please consider joining the Alliance@IBM as a member for only $10 a month--the cost of a few Starbuck's coffees. Your dues and involvement help the Alliance with the following:

  • Organizing employees and challenging IBM on policies and practices detrimental to employees and retirees.
  • Exposing job cuts.
  • Helping employees to deal with redeployment and replacement training.
  • World wide media source for IBM employee issues.
  • Legal references and current labor law information.
  • Political action on employee issues.
  • Stockholder proposals and actions.
  • Working with International IBM employee Unions to develop worldwide responses to IBM employee issues.
  • Working with Federal, State, and Local officials to make sure IBM employees, IBM retirees and communities find information and remedies for toxic exposures from IBM sites.
  • Union privileges and benefits through Alliance@IBM's membership that are offered through the Union Plus /Privilege program.

  We also have the expense of keeping an office up and running: Rent, Office supplies, fax, phones internet access and mailings of organizing materials; such as newsletters, flyers and brochures.

  We believe Alliance@IBM has, by its very existence; given IBM Corporate Mgmt pause, during their anti-employee actions.

  The bottom line is that if we are NOT here, then IBM Corporate Management has the field. There will be some who say that employees do not want representation through an employee organization or a union. Now is the time: Prove them wrong or prove them right.

• From the Job Cuts Status & Comments page
  • Comment 4/29/08: Regarding IBM unit to add 600 Charlotte jobs. The only reason the blue pig announced these new jobs in Charlotte is because they feared a huge protest and were attempting to soften the impact. In less then a year these new jobs will no longer be in existence. Lets get real, does the mortgage industry need 600 more people processing loans while foreclosures are at an all time high and other similar facilities are laying off?.-blue&bitter-
  • Comment 4/30/08: Well, IBM did it. They announced today that BP is changing it's contract for finance & accounting outsourcing. They are going to"insource" jobs back to BP and send the remainder overseas. This will take place over a 3 year period and affect about 400 people. Now that we know the contract with BP will no longer be serviced by IBM America - they have talked about RA's for some. Can anyone tell me what a typical severance package looks like? Is it X pay for X years of service? Is it a kick in the rear and send you on your way? -tulsa_member-
  • Comment 5/01/08: -Tulsa_member- Don't quote me on this, but I believe that when I was RA'd from IBM, I got 2 weeks pay for each year of service with a maximum of 26 weeks. In addition, you will get paid for your unused vacation time. So, if you have the option as my manager gave me, go back and change any vacation time taken to floating holidays where possible to maximize your last check. One other thing, they take taxes out of your final check, so that will reduce your total. -left_last_year-
  • Comment 5/01/08: Ref: -tulsa_member- BP is changing it's contract ....... IBM did it? Or BP finally got fed up and did it to IBM? How many other "deals" like that are in the works...? -Neal Watkins-
  • Comment 5/01/08: I don't know who initiated it but I believe more of the pressure came from BP to insource more of the work & then use cheap overseas labor for the rest. -tulsa_member-
  • Comment 5/01/08: Today, May 1st, the Malaysia Admin Hub went LIVE. And we should be happy about this. It was e-mailed out in the GLOBAL ADMIN (what a joke) newsletter as a big RAH RAH announcement. Um hello that is MY JOB. Rumor has it the majority of admin and admin managers have 2 years before their jobs are outsourced to India or some other"emerging" country. Funny though how Sam and the other SVP's will be keeping their 1-1 support - do as I say not as I do seems to be their motto. With the new Admin model of support all IBM is doing is creating mediocrity. -Disgusted @ IBM-
  • Comment 5/02/08: I'm a current IBM employee in an odd situation. I found out months ago that my position was to be eliminated as part of a division's restructure. I actually want to be resource-actioned/given a package as many of my poorer performing peers have received over the years. I've been advised by a former manager never to request a package directly (I guess it's grounds for immediate dismissal), however my new manager has essentially indicated that there may be no packages offered per leadership meetings she's attended, ever, so my team mates and I have been encouraged to seek out and find another position within IBM.

    I just want to leave the company (I have another source of income). I certainly don't want to leave without getting a package (I've been at IBM long enough that we're talking about 26 weeks of pay which would be given up if I simply resigned). I definitely don't want to be given a new role within IBM which my manager has recently implied she will seek out for each of us. How should I proceed?

    Can IBM indeed stick me with a position for which I no longer can work from home with zero travel - to get me to resign? Can my IBM manager force me to take another position within the company at all? The whole situation just stinks as I truly sense the division leaders are going to try to stick it to me rather than just provide a package. Are they bluffing? Any advice? -wantapackage-

    Alliance reply: Are you a member of the Alliance? Why should we continue to post these questions and answers from IBM employees who don't even support the organization that hosts this web site? To all posters: Times are changing for this web site. We have encouraged you all to join and the vast majority of you haven't. We are considering having these comment sections for the use of our members only.

  • Comment 5/03/08: To wantapackage, This is a new management trend to abuse employees even more, thanks to the fact we aren't united. They use this technique to bully senior employees to leave without paying them a dime.

    I have a friend in the same situation whom I have persuaded to look at the Alliance. This week. He's been in the company 33-34 years, a Band 10 seller in GTS Americas services sales. He was advised by his manager that he was getting a 90 day performance package because he hadn't made his numbers in 4Q and 1Q. He stated this verbally, and the employee acknowledged it and told the manager he'd retire. They even agreed on a date, the first of May.

    The first of May came, and the package notice did not appear and worse yet, the manager didn't even show up on two conference calls that day with my friend that the manager had required he attend. My friend has decided that if they won't pay him severance to leave, he won't leave no matter what they throw at him. If he leaves without severance, he won't sign anything so he can walk over to a competitor the next day, who have already given him some offers.

    I don't understand the management of IBM anymore. They are out to screw any employee or customer that stands in their way and bend any laws or accounting rules they can get away with to fool the investors. No severance, no signatures and walk to your competitor for a job the next day. -Fooled and Misled-

• General Visitor's Comment page:
  • Comment 4/25/08: SO management ought to be concerned enough to start treating its employees as assets and not as trash. The word is out about the kind of sweatshop SO has been running, the abysmal pay, the insane work demands, the stifling bureaucracy that prevents common sense and the total disrespect executives have for the troops. Is it any wonder that anyone who can, runs away from IBM SO as fast as possible? Why get sucked into that morass if you have alternatives. -Frank-
  • Comment 4/29/08: At IBM East Fishkill NY, Our facility group was told by our manager the he had to cut overtime by 10% because of poor projected first quarter earnings. Our former non-exempt working schedule was monday-friday, with an elective for working a weekend at a premium, about once a month. Now, to cut our department overtime we are being told that the weekend you work you must code your time card as a scheduled weekend worked; and to take off two days during the following weekend. Basically instead of getting paid for 64 hours.

    Now, with a two day- week day leave of absence, you are getting paid for 48 hours. A numbers game!! Everyone in our group is outraged! We were also told by our manager that he has spoken to HR and his tactic was perfectly legal .. While Sam can spend his weekend with his family and get a 11 million dollar incentive ... -pay cuts-

    Alliance Reply: Basically, as we have said many many many times; IBM can do just about anything they want with your work schedule because you are an "At Will Employee". You don't have any written agreement with IBM regarding this situation or any other for that matter. Sad to say that IBM has more 'games' to play against the employees than Alliance@IBM has members. If only employees would organize and turn those numbers around in their own favor. A contract is the only way to defeat all of these IBM "At Will Employee" abuses.

  • Comment 4/30/08: "At IBM East Fishkill NY, Our facility group was told by our manager the he had to cut overtime by 10% because of poor projected first quarter earnings." But IBM had a "wonderful" 1st quarter this year. Across most of the divisions there were significant increases in profit, sales, net income, etc. Even today I read were IBM increased it's dividend. The moderator is correct - IBM needs to unionize so that when IBM profits, then it's reflected in worker's salaries. They fed you the line of a poor 1st quarter because they knew you wouldn't fight back. -Tulsa_member-
  • Comment 4/30/08: I work for GBS Application Services (Division 6C). We have a mandatory 21% OT policy (no OT pay). Our work week is 48.5 hours due to the large bench they have been carrying in 2007 and all of this year (2008). I only work 40 hours but charge 48.5. My pay increases don't equal 21% each year (I got a 3% bonus last year). Is anyone else working these types of work weeks? It doesn't make any sense. -Anonymous-
  • Comment 5/01/08: Excuse me, but isn't it like -illegal- to charge more hours than you actually work? -Seven Oh Ninety-
  • Comment 5/02/08: Where are the comments regarding the recent stockholders meeting and picketing etc etc -Anonymous- Alliance reply: A report on the meeting and activities will be sent to Alliance members and subscribers. If you are neither, you will not see it.
  • Comment 5/02/08: Many of us are greatly afraid to join even though we fully support your organization. Fear is the sole reason why your membership drive did not vacuum active IBM employees of which brings up a question, how could we be assured not to lose our jobs by joining your organization? -Alliance responded to Sparta 300-

    Alliance reply: You have more to fear from IBM firing you during a resource action or your job gets offshored even without joining the Alliance. Our President Linda Guyer is an IBM employee. Also our Vice president Earl Mongeon and our treasurer Jim Mangi. They have been active and public in the Alliance since 1999. At the recent stockholder meeting 2 chapter reps and current employees were also there. These employees have chosen to be public in their activities. There are others around the country as well. You do not have to be a public member if you choose not to. Your name as a member is held in confidence. IBM will not get it.

    We obviously encourage employees to be public because that is how we prove that IBM employees are fed up with the situation inside IBM. IBM will claim there is no problem because IBM employees don't speak out.

    IBM wants you to be afraid. It is the perfect means of control; but remember, it is your legal right to be a member of the Alliance and to help us organize. It is time to shed the fear and join with others that have. In addition we need to tell all of you that if we don't build membership and gain more dues this organization will fade away and then there will be no organization to speak and organize on behalf of IBM employees.

• Pension Comments page
• Raise and Salary Comments
  • Comment 04/25/08: Salary = 15% less (not a salary cut, a "pay remix"); Band Level = 08; Job Title = I/T Specialist pay cut test dummy; Years Service = who cares; Hours/Week = gotta be at least 45 now to break even; Div Name = Global Services; Location = anywhere USA; Message = -Need Advice-: IBM managers apparently NEVER ASKED or QUESTIONED HR when given job responsibility worksheets concerning their employees for the managers to fill out last year to target which of their employees should be made non-exempt and hourly and given the 15% base pay cut (IBM to call this a "pay remix" is worse than an insult to those affected by it). You figure if these managers AT LEAST challenged IBM HR by asking their employees what they ACTUALLY DO ON THE JOB instead of telling IBM HR through the worksheet what they THINK their employee does and respected their employee then perhaps the dastardly actions IBM took could either have been averted or minimized.

    IMHO, those folks who got settlement checks from the Rosenburg vs. IBM case made it real easy for IBM management to fill out the job scope worksheets to screw the employee. IBM did not do damage control due to the settlement: IBM took retribution out on those employees to say IBM complies with the FLSA by instituting the 15% base pay cut. If IBM didn't take retribution with the "pay remix" then they would have not considered a 15% base pay cut to those targeted.

    1st QTR 2008 IBM again reported RECORD IBM PROFITS yet IBM says they CAN\'T AFFORD to not do the base pay cut to only 7600 or so employees in totally unconscionable. IBM also wanted to recover as much as they could from the $65M settlement as well by the 15% base pay cut. ASK IBM upper management and executives about this and see if you get this as the honest answer.

    So if you think any of the IBM management involved in your position change will be forthcoming to let you know they know if you took an I/T Specialist band 08 job from a band 08 Project Manager job that you might be affected by something like this means you will probably get the typical IBM non-response from management since they have been instructed by IBM HR to keep their ears and mouths shut.

    Basically without a contract you are now screwed. Join the Alliance if you haven't already to stop the injustices happening as we speak in IBM and all future injustices we haven't experienced yet but could surely be coming our way soon! -Anonymous-

  • Comment 04/25/08: Salary = 78,000; Band Level = 7; Job Title = PM; Years Service = 9; Hours/Week = 45; Div Name = 07; Location = Denver, CO; Message = To -spiderman- : While I feel bad for those employees impacted in the article, I don't think they should be feeling that low. When was the last time anyone here got a raise in the upper single digits? I haven't gotten more than a 2% raise any year in the last 4 years, and that's if I got a raise at all. -Anonymous-
  • Comment 04/26/08: Salary = 49k; Band Level = 4; Job Title = SSR; Years Service = 9; Hours/Week = 40; Message = MADE 65K LAST YEAR DUE TO OVERTIME. -TEXACANO-
  • Comment 04/27/08: To Spiderman- LMAO...I loved the article. The chickens are coming home to roost. Even though you can remotely manage data centers quite easily, you still have to have skilled personnel on the other end of the access line. They just love blaming everything on the subprime mess. This reminds me of what the American Indian women did to Custer after the battle of the Bighorn. They ran knitting needles through Custer's ears so that he would 'listen' in the afterlife, because he was not listening to them while he was alive. We little American indians have tried to tell the IBM execs that outsourcing is NOT working, but they do not listen. Now customers want little more than IBM's floorspace. That is why the U.S. orders are down. IBM has decimated the skilled workforce and now they do not have enough people with the skills to implement their hardware. So customers blame it on the hardware. Perhaps we can send Sam Palmisano a pair of knitting needles after the demise of a once great company. -just1waiting-
  • Comment 04/30/08: Salary = 60500; Band Level = 6; Job Title = Consultant; Years Service = 1; Hours/Week = 40; Div Name = 5; Location = Ohio; Message = Started at $58,500, raise after 4 months, after one year of service, promoted one 1 year later, 20% raise (off $60,500) to $72,600. No complaints, this is my first job out of college. -C Mart-
  • Comment 05/02/08: Location = DC Area Message = For those folks who appealed their reclassification - My understanding is that the Department of Labor web site clearly states what they view as job attributes which qualify a position as exempt from overtime rules. Below is the URL for jobs in the computer field... http://www.dol.gov/esa/regs/compliance/whd/fairpay/fs17e_computer.pdf As you'll see on this web page, there's no indication that a Project Manager role qualifies as exempt; the exempt positions are mostly programming and system design jobs. -An Upset and Concerned IBM Employee-
  • Comment 05/03/08: Salary = 90+k; Band Level = 8; Job Title = Senior IT Specialist; Years Service = 30 years; Hours/Week = 48; Div Name = IGS; Location = Pok; Message = I was notified last week that my appeal was granted and that I would be returned to exempt and my salary returned retroactively. My personnel files has now been updated, but I am still waiting for the pay to be returned. In my dept. there were 12+ that were reclassified. So far as I have heard, I was the only one that was moved back to exempt level. Everyone else was told no. Not sure what the magic words are or why some do and others don't. the logic escapes me, but would love to hear how many other successful appeals occurred. **an Anonymous 15% Lucky this week**
• PBC Comments
  • Comment 4/06/08: PBC's what a joke!!!!. -Gone4Good-
  • Comment 4/06/08: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 2700; Prior Yr Bonus = 2400; Message = I want a real annual evaluation based on my manager's knowledge of what I do. I have seen my manager (whose office is one floor above me) once in the last 12 months. We speak briefly on the phone once a quarter if that. She has never taken the time to get out of her office to do a walk thru of all the areas for which I am responsible. Thus has no first hand knowledge of the custom contract I support. This PBC process is bogus and a cop out for management. PBC's are really an essay contest where the employee is graded on how well he/she writes. I have worked for a number of employers thru the years and IBM has the worst management style imaginable. -Gone4Good-
  • Comment 4/10/08: to -Gone4Good- In the past I have just cut and pasted my scorecard the manager sent out monthly. Not a single word and got a 2+so it is not even an essay contest. -Exodus 2007-
• International Comments

Vault Message Board Posts:

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:

• "Any tips?" by " rockandhardplace". Excerpts: Hi, another Big Blue escapee here. I have moved out of consulting completely and am now in what might be called an understudy for a customer project manager role. It's a small step up from the resume-killing roles that Big Blue had been putting me in ever since I got drafted straight out of college.

  The company I'm currently working for has offshored work to India in the past, and due to less than satisfying results(surprise, surprise), are starting to shop around. Can anyone share their experiences on working with offshore companies from other countries? Specifically, Vietnam, China and the Philippines?

  In the past, I have briefly worked on a project involving setting up a call-centre in the Philippines. I found the workers to be courteous, hard-working and communicated in English very well. Customers loved them. However, the only issue was that they could be too accommodating sometimes. Many training sessions involved trying to get across the concept of "scope creep" and which customer demands need to be escalated to change requests that require careful impact analysis. Promising customers the universe then being unable to deliver and/or causing further system instability = BAD! Overall, my experience with them was good and I have put them forward as a possible contender. Do any of you have any pros & cons regarding offshoring software development & support to the Philippines?

  As for India, my experience with them both in Big Blue and outside of it has consisted a lot of the following:

  • Phase 1: Everything is working somewhat smoothly
  • Phase 2: A few weeks or months down the line, the competent ones leave for a better opportunity. I've had onshored team members brag to me during lunch that they've moved companies 2 to 3 times now. Big Blue is not that big a deal to them. Managers are gobsmacked that comparatively low-paid Indians are also capable of trading up but assume that there's more where they came from.
  • Phase 3: We are forced to work with the bottom of the barrel while continuing to futilely seek skilled people. Offshore bosses think that we can't hear them coaching their employees on the 'correct' things to say during phone interviews.
  • Phase 4: Project progress going backwards. Expensive contractors called in. Some are worth what they charge, but more than a few aren't.
  • Phase 5: Project muddles through, after client begrudgingly gives the green light to several follow-up projects to clean up the mess of the first one. Contractors and offshore companies greedily eye the extra work. Client sometimes too lazy to shop around and allow it to go ahead.

  I have suggested taking on and training college grads, but as a previous thread in this board has mentioned already, many grads these days don't seem bright and/or motivated enough to tie their own shoelaces! I have pointed out that one of the star employees here is a grad that they hired 2 years ago, and who is motivated to stay with the company as this is his preferred city to live in. But people like him are getting quite rare. Looking forward to hearing your thoughts!

• "Look for Low Cost Areas in the States" by "Frank_Reality". Excerpts: Consider some of the low cost states in flyover country in the US. States like North Dakota, South Dakota, Montana, Wyoming, Nebraska and Idaho. Low taxes, lower cost of living, which means lower salaries, lower benefit costs and less competition for employees, while the residents of these states have strong work ethic (read high productivity) and strong English skills. They're also relatively in sync with time zones (unlike India and China).

  By the way, the business my wife is in hired two Filipino staff members - they literally sponsored their immigration and they have worked out just great.

  Now, as for China and Vietnam and any other rapidly developing nation, the issue of keeping good workers will be a problem as long as demand overwhelms the supply of talent. And not only is this a retention issue, it's also a cost issue - if you want to keep the best, you'll have to keep the pay competitive.

  Second, I think you'll see a lot of the same issues with India in terms of a very thin pool of great talent and large pool of inexperienced or otherwise unprepared persons.

  Last, a) there is no free lunch, b) you get what you pay for and c) you only scream once when you buy quality.

• "Treat Your People With Respect" by "eyes-wide-open". Full excerpt: Yet another senior person leaves to a competitor, and IBM says menacing things, sends menacing letters. The person is feeling screwed. Can they not finish the thought sentence of "I will screw this person" with "they will tell their very close client contacts" and certainly avoid ever recommending the blue pig to anyone. Dumbies. Assholes. They are who they are and they deserve the culture they are in. Missing the bigger message: "if you treated your employees with professional respect, they wouldn't be clambering to leave". They get what they deserve
• "Leaving IBM soon - anything to not sign?" by "426_227". Full excerpt: I'm leaving in the next 2 or 3 weeks, and I'm wondering if I'll be asked to sign any forms that I am not obligated to sign? If there's anything they'll try and trick me with? It's sad, but I really don't trust IBM anymore. Any other tips are welcome. Should I roll over my meager pension to make sure it doesn't get taken from me in the future?
• "Only sign if there is a financial benefit" by " bluedngone". Full excerpt: IBM will present you with forms to sign about benefits, assets and non-disclosure. Only sign if you feel there is a financial benefit. They cannot without pay, pension or accrued vacation pay. But they can withhold if you don't return your assets. Don't lose your laptop or discover that it has fallen off a 10 story building. Leave in dignity as fast as possible.
• "No Severance, No Signature" by "ancientblueconsultant". Full excerpt: That's the rule of thumb. It is especially true of the "Reminder of Confidentiality". Don't sign anything, and I mean nothing. Even if they ask you to sign for a receipt for your badge or laptop, don't do it. They are adept and trying something at the last minute to try to trip you up. As to your money, yes, move it out. Although it may be cheaper to invest in IBM programs than on the outside, in a fast paced market you can lose your shirt because of the inherent delays in IBM savings program processes. Go somewhere where there are more options to invest in and more dynamic in allowing you to quickly and easily move investments in rapidly changing market conditions, which are becoming the norm.
• "Treat Your People With Respect" by "eyes-wide-open". Full excerpt: Yet another senior person leaves to a competitor, and IBM says menacing things, sends menacing letters. The person is feeling screwed. Can they not finish the thought sentence of "I will screw this person" with "they will tell their very close client contacts" and certainly avoid ever recommending the blue pig to anyone. Dumbies. Assholes. They are who they are and they deserve the culture they are in. Missing the bigger message: "if you treated your employees with professional respect, they wouldn't be clambering to leave". They get what they deserve
• "History + Autocratic Regime" by "ancientblueconsultant". Full excerpt: Unfortunately when you combine the history of an arrogant company culture and an autocratic self-assuring management that's what you get. The culture is reverting back to the early 90's late 80's when they just couldn't handle rejection or abandonment by any of the good slaves looking better opportunities.

  On a related point, I've heard rumblings that Strategic Outsourcing is having a real tough time convincing folks that have been outsourced on a deal to come over to the blue pig to get screwed some more before being let go as skills garbage. This is a real problem, because the pricing on an outsource is highly sensitive to having at least a good percentage of the outsourced client environment skilled personnel coming over to the blue pig as continuing slave labor for a little while during the transition part of the outsource contract.

  The problem appears to be that the blue pig doesn't seem to be able to prove convincingly that the majority of those folk that come over during transition get new careers in the pig and are happy to have been outsourced!

• "More chickens coming home to roost" by "Frank_Reality". Full excerpt: Not only is SO not retaining acquired personnel, SO is seeing voluntary attrition of legacy employees in some locations where other opportunities abound. SO is also experiencing clients specifying in their contracts that offshore labor NOT be used. Seems they dislike paying a premium price for abysmal quality and productivity. SO is also facing continued failures to meet contracted service levels and the millions of dollars in penalties IBM has had to pay. Not much to be happy about in SO.
• "Cheapskates" by "phooey69". Excerpts: According to the Merriam-Webster dictionary, the word "cheapskate" is defined as: "A miserly or stingy person, especially one who tries to avoid paying a fair share of costs or expenses."

  It's probably not a surprise to anyone on this forum that SO has run into problems. The "raison d'etre" in SO has always been COST CUTTING. Charge exorbitantly high fees to the clients, yet run the business as cheaply as possible.

  The cost-cutting mentality has infected the entire business. Every day, I deal with managers whose major (probably only) concern is that they don't get stuck with the bill. I'll bet everyone on this forum who works (or has worked) for IBM has dealt with them.

  This mentality has certainly affected customer relations. Employees working for customers don't want to work for IBM, because they know what's coming. The customers also know what's coming, because they bring in lots of lawyers, outsourcing consultants, etc. before signing any deal. The chickens are coming home to roost, indeed.