Welcome to IBM Employee News and Links

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

• Plan Sponsor: Studies Suggest $45B Taxpayer Cost from Dropoff of Employer Health Coverage. Excerpts: Two new studies presented by the Commonwealth Fund suggest that falling rates of employer-sponsored coverage are placing an increasing burden on taxpayers, public health insurance programs, and workers themselves - particularly low-wage earners.

  The report "Who Pays for Health Care When Workers are Uninsured" states that ultimately, the lack of employer-based coverage generates public costs in the form of taxpayer bills to fund public insurance programs or uncompensated care. According to the report, the share of costs paid by public sources has remained roughly constant, but the total cost to taxpayers has increased substantially since 1999 to a total of $45 billion for publicly paid care. ...

  In the second report, “The Widening Health Care Gap Between High- and Low-Wage Workers,” the authors say increasingly fewer low-wage workers are eligible for public insurance programs or can afford to purchase private insurance. The report also says low-wage workers are less likely than high-wage workers to work for companies offering health coverage.

• Taking Note, A Century Foundation Group Blog: Debating the Road to Universal Coverage. By Maggie Mahar. Excerpt: This week, I have been mulling over The American Prospect’s May 2008 Special Report: The Path to Universal Health Care At first glance, it might seem that the eight articles in the report take eight different roads to reform. But I’m glad to see agreement on many pivotal points.
• New York Times Magazine: Entitled to What? By Roger Lowenstein. Excerpt: Not surprisingly, John McCain’s platform is well to the right of the Democrats’. He favors bringing entitlement spending down rather than bringing revenues up. And he has made it clear that he is open to cutting Social Security benefits. His boldest stroke is on health care, where he would offer a universal tax credit but in return make employer plans taxable to the recipient. In other words, if your company has a health plan, you would have to pay taxes on the value it provides. This would pierce the illusion that health care is “free” and, it is said, discourage spending. This is Adam Smith 101: if health-care recipients pay more of the cost, they will order fewer M.R.I.’s and replace fewer knees.
• Detroit Free News: The candidates' health care proposals.
• Kaiser Daily Health Policy Report: U.S. Manufacturers Spend Twice as Much as Foreign Competitors on Health Care, Report Finds. Excerpt: U.S. manufacturers that offer health insurance to employees spend an average of $2.38 per worker per hour on health care, substantially more than the amount spent by foreign competitors, according to a report released on Tuesday by the New America Foundation, the Los Angeles Times reports. According to the Times, the report "provides support for the now-familiar lament of employers -- that rising health care costs are eating into the corporate bottom line."

  Len Nichols, policy director for the foundation and author of the report, said that foreign manufacturers have lower health care costs because they operate in nations with more efficient health care systems that are financed by the government.

• Plan Sponsor: Lack of Health Care Weighs Heavily on Decision to Retire. By Rebecca Moore. Excerpt: According to a press release on the analysis conclusions, employees who rely on their employers for health care coverage and do not expect to receive employer-provided health benefits in retirement are 16.5 percentage points less likely to retire in any given year than workers with access to health care coverage through another source. Other health insurance sources that allow an employee to decide to retire, according to the data, include a spouse's health insurance plan, public health insurance, COBRA coverage, or employer-sponsored retiree health insurance.
• CCH Internet Research Network: Employee Contributions For Health Care Are Nearly One-Month’s Salary. Excerpt: Employees’ median annual contribution for family health care coverage is now $3,120, a 15% increase from 2007 and a 22% increase from 2006, according to Aon Consulting’s 2008 Benefits and Talent Survey. This annual contribution represents nearly one-month’s salary, based on the median household annual income of approximately $48,000, Aon noted. In comparison, the 1,100 U.S.-based organizations responding to the survey experienced approximately 10% annual health care cost increases since 2006.

  Aon found that employees’ median monthly contributions in 2008 averaged $66 for employee-only coverage, $160 for employee-plus-one or employee-and-child coverage, $186 for employee-plus-children coverage, $189 for employee-plus-spouse coverage, and $260 for family coverage. Employer contributions averaged $326 for individual coverage, $574 for employee-plus-child coverage, $628 for employee-plus-one coverage, $633 for employee-plus-spouse coverage, $641 for employee-plus-children coverage, and $863 for family coverage.

• BusinessWeek: Is Your Kid Covered? Insurers make big profits from college students, but some families are left with huge bills. By Ben Elgin and Jessica Silver-Greenberg. Excerpts: In fall 2006, Ralph Giunta Sr. decided to buy his son Ralph Jr. a practical birthday gift: health insurance. The father, who owns a small financial-services company that lacks an insurance plan, phoned Palm Beach Community College, where his son was on the dean's list. The Lake Worth (Fla.) school recommended a policy provided by MEGA Life and Health Insurance, whose student business was acquired in late 2006 by giant UnitedHealthcare. Giunta wrote a check for $1,044 for one year. "They assured me he was well covered," he says. ...

  Ralph Giunta Jr. knew something was wrong in March, 2007, when the photography major and avid skateboarder felt pain in his legs and feet. Then 19, he lost all feeling in his lower extremities and was rushed to the hospital. The diagnosis: Guillain-Barré's syndrome, a rare disease of the nervous system that typically causes temporary paralysis. His father's anxiety was compounded upon learning more about the insurance he had purchased. Even with "major medical" coverage, the plan reimbursed only $22,800 of the $206,325 bill for 19 days of intensive care.

  In the end, Ralph Jr. recovered, but the Giuntas owed $265,000 in hospital and doctor bills. As he juggles maxed-out credit cards and loans from friends to make minimum payments on medical debts, Ralph Sr. admits he didn't read the UnitedHealthcare plan closely. "I thought, well, the college is offering it," he says. "Why would it be a bad plan?"

  More than half of the insurance plans recommended by colleges offer benefits of $30,000 or less, according to a survey published in March by the General Accounting Office, an arm of Congress. Many plans have further limits that prevent payout of even modest maximums. While two-thirds of the country's more than 17 million college students have coverage from a parent's employer or their own job, many of the rest may be vulnerable if they suffer a serious illness or accident. With premiums and restrictions increasing under employer-provided plans, a growing number of parents are shifting children to college-sponsored coverage. But "when a student gets gravely sick, $30,000 in benefits is unrealistically low," says Alan Sager, a professor at Boston University's School of Public Health. ...

  In some cases, universities have comfortable relationships with carriers that reimburse the schools a small percentage of student premiums to cover administrative expenses. This raises questions about whether schools ought to serve as what amounts to a broker. The University of Alaska system receives 5% of premiums collected through its plan. With $2.3 million in premiums expected this academic year, the payment would come to about $115,000, according to a copy of the contract provided by the system. The Kansas Board of Regents receives 1.5% of its students' premiums to cover costs of administering the plan "or other uses as determined by the Board," according to its contract. That could mean a reimbursement of about $100,000 for 2007-08. ...

  The vigorous health of most college students helps make insuring them a lucrative niche, according to industry consultants. Most insurance companies, even if publicly traded, don't break out separate financial results for their student-oriented policies. But some schools disclose an indication of the profitability of policies sold to their students: the so-called benefits ratio. This shows the percentage of premiums returned to customers in the form of benefit payouts. Large health insurers typically have overall ratios of about 80%, meaning 20% of premiums goes to profits and administrative costs.

  In several cases where BusinessWeek (MHP) was able to obtain benefits ratios from colleges or universities, the percentage was well below 70%. Anything below 75% ought to be grounds to negotiate a better deal, according to Eric Engstrom, president of Keeling & Associates, a consulting firm in New York. At Palm Beach Community College, the benefits ratio for the spring semester of 2008 was 42.6%, according to reports provided to the school by UnitedHealthcare.

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 5/06/08: Hi, I guess I am one of the freeloaders. I watch the website because it gives me valuable information on what IBM is doing which helps me plan my career options. I don't join the union because I am an Australian, not an American. Having the website open means that you can gather intelligence on IBM activities from people who may be unable to post in the new world. It also is a vehicle to hold what IBM does up to public scrutiny, which in turn, may have *some* moderating effects on what IBM does. Big companies like IBM are now bigger than small governments. The union movement could be a balancing force, but only if it operates internationally. To my knowledge, there is no viable union presence in the Australian operation. We are in the same position as Americans, with IBM jobs being moved from here to lower cost centres. Until there are effective unions in the BRIC countries, we are all going to struggle. I know my perspective doesn't pay your bills, but hopefully it gives you another point of view on the best use of your website. -Fingerbun-

    Alliance reply: We very much appreciate your point of view and your obvious support of our effort. Thank you for watching us from across the ocean. We have known for some time that we have friends and supporters in other countries. We are connected to the IBM Workers international Solidarity and have been, for some time. We are now carrying their web pages on our web site: http://www.allianceibm.org/iwisindex.htm also this page: http://www.allianceibm.org/unions.htm We will be contacting you and will try to provide specific information to you that we hope will be of some help in your workplace. Thanks again for your comments. We appreciate them.

• General Visitor's Comment page:
  • Comment 5/03/08: I was on assignment to IBM Germany in the early 80's and was , therefore, covered by the union that was in place then. I think it worked well. Overtime was always approved by the union (Betriebsrat) but it seemed that the union was always concerned about work-Life balance. Our (big) project went live - on schedule I guess. I was not in the union discussions but it seemed to be a good partnership between Company and Union. -Neal Watkins-
  • Comment 5/04/08: -ibm30plus- Most IBMers still are loyal to IBM, and would like to see a long term benefit to themselves and the company. I can't speak for most IBMers, but I\'d guess our site has fewer than 10% who feel that way. Everyone I talk to has a reason for still being at IBM, but they profess to despise the company and will leave as soon as they find something better. Management seems okay with that, so long as people don\'t leave faster than our products can be offshored. -irRational-
  • Comment 5/04/08: Quote: "I work for GBS Application Services (Division 6C). 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." You better not be billing any government contracts this way. If you are, IBM will be severely fined and those employees responsible will be immediately terminated. I hope the government is being diligent and frequently auditing IBM's billing practices on government contracts. -No_way_jose-
  • Comment 5/05/08: H-1B's, offshoring, pay cuts and the like will not disappear until as long as it represents money in the pockets of our management. Do the math. If a firm has 25,000 employees on H-1Bs or can otherwise "save" $10,000 on each, that equals $250,000,000 that management can use to increase their pay and not impact the bottom line. Businesses have become a mechanism to transfer wealth, rather than system of value add. -Calc-
  • Comment 5/07/08: It would be GREAT to work with people who didn't spend 75 percent of their time worrying about losing their jobs. Back in the 70"s and 80"s we worked together and helped each other and the general success of the team was paramount . It was a great work environment and we all looked forward to coming to work.

    The only way we will ever get that great work environment back is to unionize. Then WE have a contract that frees us from wasted time worrying about job loss. Management can stop wasting time scheming how to screw us out of money and benefits to make themselves look good and concentrate on focusing the team against the competition to make profits and stocks soar. As everything, salary and benefits wise, will be negotiated by trained professionals on both sides. The results should be fair and equitable to IBM and its employees and be fairly administered so even more savings; as we wont need outsourced administrators trying to explain the convoluted benefits package no one really understands.

    I do not know if modern IBMers could work in that environment though. Earning respect from the quality of your work instead of the sharpness of your backstabbing knife. Being able to trust your peers to protect you and themselves without a second thought because anything else is detrimental to the work environment. Respect for each other is what made things work so well back then. IBM called it respect for the individual. It did not flow from IBM. It was the employees respecting each other and if IBM wanted respect they had to give it also.

    That respect can live again in a union. The biggest difference between a union negotiator and a CEO is a union negotiator will make concessions and accept a pay cut if times are really bad . A CEO won't. And in fact, will manipulate numbers to maximize his/her own bonus and raises. Which is worse for a business? The Greedy CEO who wants to take take take without really performing, of course! -Exodus 2007-

  • Comment 5/07/08: US Project Managers beware as it coming this way! Ron Atkins, VP of ITD Transition/Transformation, is moving forward with the Global Resourcing program they have been planning behind closed doors. They are not hiring more US full time or sub-contractor employees, but instead want to start using offshore PM's based in other (cheaper labor) countries to work on US projects. It's just to help out with workload since we are so busy ;-) TIME TO CONSIDER JOINING THE ALLIANCE! -Just another IBM serial #-
  • Comment 5/07/08: I would hate to see the message board closed to non-members. I still think it's a good vehicle for getting more people to join. The Alliance could, however, limit comments to union members only. -Exodus2006-

    Alliance reply: The message board and the comments are the same thing. If we closed the message board to non-members, then the comments would be limited to union members, only. Our existing members have been concerned about our 'giving away the store' for some time. Especially when they see the membership decline because of layoffs.

    You are right about the web site being a good vehicle to getting more employees to join. The point is, we need funding to continue that effort. Our dues paying members are the union. When new members join and pay $10 per month, they are helping to continue our effort and their own. There is a huge responsibility to be shouldered; if we all carry some of the weight, we can move forward quicker, toward a number of sign-ups that can make a huge difference when the time comes to vote.

    Organizing is a very difficult. Especially when the economy is plummeting and the working people become egregiously affected. The days of IBMers being 'safe' from the economic woes of layoffs and downsizing have been over since 1990. The new IBM has opened the door of opportunity to its employees to form a union and bring some protection and sanity to this whole process. The most necessary ingredient is the non-management employees; standing up for each other and weathering the ups and downs of 'Globalism'.

  • Comment 5/08/08: If you are one of the few remaining employed by IBM in the US, it's time to join Alliance now and make a difference. Word on the street is more cuts by end of 08 to complete their master plan. Make a difference and join up now! -Anonymous-
  • Comment 05/08/08: -Anonymous-: You are so right !! If you're in ITS/SSO, prepare for 80 - 85% of the work to be off-shored by the end of the year. This is their master plan, and there is no stopping it. -miss understanding-
  • Comment 05/09/08: I sat on the fence for 2 years waiting for things to get better at IBM and/or for Alliance membership to start showing significant gains. Well, things continue to get worse at IBM (hard to believe things could get worse but they do) and Alliance membership will never grow unless people decide to start taking action rather than sitting on their hands and letting IBM continue to slap them around. I’m proud to say I took the plunge and became a member this week. Ever since I signed up, I’m sleeping better at night, knowing that I’ve at least done something to stand up for myself and to try and put a stop to this insanity. Take my advice, sign up and you’ll sleep better at night as well. -IBM Slave-
  • Comment 05/10/08: So over 7,000 employees had their salary cut by 15 percent, yet I don't think Alliance membership has increased by that amount. What's wrong with you people that haven't signed up yet? Are you just going to continue to take it? Are you just going to grumble about it but do nothing? Make a stand!! It's better to light a candle than curse the darkness. I've lit my candle, how about you? -Wondering Aloud-
• Pension Comments page
  • Comment 5/10/08: I was one of the 7600 reclassified as non-exempt. I am still in the same job position now that I was in when the pension was not frozen which was before this year. Shouldn't my OT worked from last year and before be accrued to my pension since I was incorrectly classified as exempt since IBM reclassified me as non-exempt? OT is pensionable earnings correct? BTW, I was told by my management to only code 40 hours on my labor claim despite the OT I worked last year and before. So IBM probably wanted this to make their profts and also screw me out of OT pensionable benefits. BTW, I joined the Alliance. I'm tired of how I am treated by IBM. -Anonymous-
• Raise and Salary Comments
  • Comment 05/04/08: In the last 2 weeks, we have had our OT limited to 6 hours per week. Previously (before the salary cut), I worked 55 hour weeks. I am now working the 46 hour week and just not getting all of my work done. Has anyone else had this happen? Wondering if it is just my org or IBM across the board. -JustMe-
  • Comment 05/07/08: Salary = 62K before 53K after; Band Level = 6; Job Title = IT Specialist; Years Service = 5; Hours/Week = 50; Div Name = 29; Location = MN; Message = I heard that of the 48 people that appealed their remix in my 2nd line org, only two were approved. I know several of the people affected (truthfully) presented their case based on answers that would lead to an exempt answer using the FLSA Computer-related occupation questionnaire. -Anon-
  • Comment 05/07/08: Salary = 58500; Band Level = 6; Job Title = IT Architect; Years Service = 3; Hours/Week = 40; Div Name = ITS; Location = Midwest; Message = Stupid Non-Exempt Thing -JonAnon-
• PBC Comments
  • Comment 5/09/08: Prior Yr PBC = 2; This Yr PBC = 3; This Yr Bonus = 0; Prior Yr Bonus = 2500; Message = I appealed and lost. Provided written documentation on my deliverables. They said I was convinced I delivered, but didn't like how I delivered. HR says I am encouraged to leave if I get one more. I said this is a rat-race and I won't run, HR's response, walk the line or this is not the place for you. Stop. Think. I think I am an individual with reasonable intelligence, but it's not what works here (or seems to). I still don't get the how part, but does it matter ? One thing to keep in mind. this is not a products company anymore, but a services company. Just another CapGemini or EY. They are not in the league of PwC, Goldman Sachs etc. Words come time mind, but let's be professional. Joined the Alliance. -RS
• 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:

• "Cheapskates" by "phooey69". Full excerpt: 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.

• "A familiar pattern" by "civilliberty". Full excerpt: I remember working on a client's account. Everything was pegged back to the cost of managing the account, down to the last cent. Though, as an IT professional, I wanted to give the customer the best possible advice and add value in my role this was time and again forbidden me because of cost (and we are really talking pennies here, maybe only $200-$300) - forget about the client relationship and good will and being professional. Managers don't reward professionalism , only those that stick relentlessly to budget regardless of the customer experience. It's good to see clients wising up to IBM's exorbitant cost regime and abysmal quality. It's only a matter of time before everyone will be smelling roast pork.