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Obamacare May Also Mean No More Employee Parking Spots

Could it be that corporate executives are among the biggest “winners” in the implementation of Obamacare? We don’t just mean health insurance company executives, either. We mean executives everywhere, from Delta to AOL to UPS, who now get to eliminate the employee benefits they’ve long targeted while blaming, vaguely, “Obamacare.” Thanks, Obama—really, you’ve been a big help!

The most high profile and bizarre example thus far has been the AOL saga of the past week. CEO Tim Armstrong recently announced that because “Obamacare is an additional $7.1-million expense for us as a company,” the company was deeply disappointed to have to announce that it would be making cuts to the . . . employees 401(k) program? Okay, sure.

The sneaky little plan would be to cut benefits by basically maintaining those benefits but not letting employees . . . have them. Instead of matching employee contributions to 401(k) plans per pay-period, it would match them in one lump sum, at the end of the calendar year. For the math to work, then, AOL is basically saying that it expects (hopes, even!) some employees leave before December 31, so the company will never have to make the matching payments owed to them. It would also deprive workers from realizing market gains on their plans in real-time. How many MBAs did it take to come up with this obvious swindle?

Armstrong eventually screwed up, though, by continuing to talk after he had served up the neatly opaque “Because of Obamacare.” On an internal call with employees, he explained rising company costs this way:

“Two things that happened in 2012,” Armstrong said. “We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”

For starters: the man who originally said “Obamacare” was responsible for its rising health benefit costs then refers specifically to two highly expensive cases of payouts that would be highly expensive with or without Obamacare. Secondly, what does he mean “we” paid a million dollars for each case? Don’t they offer insurance plans so that the insurance companies are the ones shelling out for these costs, as is the point of insurance?

And then, of course: is he really blaming two people who had the gall to use their insurance to save their children’s lives for a decision to scale back unrelated 401(k) benefits company-wide? This is the point where illogic and disingenuousness converge with plain old cruelty. Deanna Fei, a mother of one of those “distressed babies,” took offense at this obviously offensive statement and wrote about it for Slate:

Some commentators have questioned the implausibility of “million-dollar babies.” I have no expertise in health care costs, but I have a 3-inch thick folder of hospital bills that range from a few dollars and cents to the high six figures (before insurance adjustments). So even though it’s unlikely that AOL directly paid out those sums, I don’t take issue with Armstrong’s number.

I take issue with how he reduced my daughter to a “distressed baby” who cost the company too much money. How he blamed the saving of her life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting.

And so Armstrong has decided to reverse the 401(k) cut. And to think, if he’d just said “Obamacare” and left it at that, he probably could’ve gotten away with it.

Deanna Fei wasn’t an AOL employee—her husband, Peter Goodman, works for the Huffington Post, and so his spouse is covered on the plan. Coincidentally, this would make them a perfect case for benefit cuts that are popular among other companies and institutions blaming “Obamacare.” Both UPS and the University of Virginia have announced that they will no longer provide spousal coverage, though UPS will only do that if the spouses are eligible for health care through their own employers.

The major flaw with blaming Obamacare for rising health care costs, though, is that those costs were already rising, and companies were already in supposedly stressed financial positions. In some cases, Obamacare may throw some extra fees on top as it’s implemented, but it’s hardly the thing that got them into this position. From NBC News:

Ania Kransiewska, a senior director at the Corporate Executive Board Company, said she did not want to downplay the challenge companies have, but “we have seen this before UPS and before the Affordable Care Act.

“Costs were going up by such a high amount anyway . . . the Affordable Care Act costs are just icing on the cake,” she said. “Most companies, even if they were to repeal this legislation tomorrow, would still have this cost problem.”

Amy Bergner, managing director of PricewaterhouseCoopers’ Human Resource Services Practice, said companies will pay more in premiums and surcharges, as well as higher administrative costs associated with enrolling workers and their dependents. “Many employers recognize that workforce management goes beyond this issue,” she said.

A recent Kaiser Family Foundation/Health Research & Educational Trust survey found that while healthcare costs are still climbing, the rate of increase has slowed to 4 percent, bringing the average premium of employer-provided insurance to $16,351 for family coverage.

“Obamacare” offers executives a chance to cut those benefits they’ve long thought of cutting but held back because they didn’t want to play the villain. As Paul Waldman writes at The American Prospect, “Tim Armstrong and thousands of other employers like him are doing everything they can to convince workers that their stagnant wages and shrinking benefits aren’t the fault of the people who actually set those wages and benefits,” but instead the fault of Obamacare, this crazy thing that’s out of their control. Those poor, poor distressed babies.