

Health care: Microsoft ending 100% coverage for employees - cwan
http://www.techflash.com/seattle/2010/10/health_care_microsoft_employees_to_share_in_their_costs_in_2_years.html

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zach
_"We can confirm that Microsoft has begun to evolve its employee health care
benefit," the company said in statement._

Wow, way to make it sound more ominous, corporate PR person. You could have
just said you were knocking your benefits down a peg, but no, it's only the
beginning of Microsoft's benefits turning into... well, what? Something much
less generous, I guess.

Here I thought Microsoft was just bowing to the enormous costs of health
benefits, but with that turn of phrase, it seems like Microsoft has some kind
of new attitude.

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ajg1977
An out of pocket maximum of $1k ($2.5k for families) is still a very good
deal.

Bottom line - If you're generally healthy it won't make that much of a
difference. If you or a family member require expensive care, or you're
unfortunate enough to be in a serious accident, you'll still be very glad
you're covered by MSFT.

~~~
DougWebb
If you're generally healthy and have health costs < $1000/yr, then this could
mean going from 100% coverage to 0% coverage, depending on how they set it up.
Still a great deal for accidents, though, compared to what most people have.

~~~
enjo
An out of pocket maximum is generally not the same as a deductible. My wife
and I have a similar plan now. It's $1500 (I think) maximum, but we still only
pay the routine $20 co-pay for normal visits... $75 for emergency room.

I don't think we've ever actually spent more than $100 out of pocket over and
above the monthly premiums. If something went terribly wrong, however, that
cap would mean we'd owe at most $1500/yr. That worked out well for my father
when my mom had cancer. 4 years of treatment totaling WELL over $1M, and I
think he paid like $3500 total.

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larsberg
This may have an impact on recruiting senior hires. It didn't come up often,
but when recruiting folks with families and getting on in years -- especially
with pre-exiting conditions -- this benefit helped close people who had salary
and stock package offers from other companies that I couldn't match. It's
really hard to argue with 100% coverage for even things like autism treatment
and visits to naturalists/homeopathic-care, which was quite unusual at the
time.

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woan
I don't know any other companies this generous even after the change in two
years.

~~~
ahi
Microsoft is generous with their employees, but stingy when it comes to
defining "employee".

~~~
bhiggins
Microsoft is also great at dodging taxes.

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eclark
The healthcare coverage was something that drew me in when I started work at
Microsoft. It showed a pretty serious level of respect to their employees.

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lkrubner
I wonder why they would make this announcement now? Why not a year ago, or a
year in the future? My first guess would be there margins are slipping, or
they expect there margins to be thinner in the next few years. Thus, they are
starting to look for some minor cost savings.

~~~
jf
The announcement was timed to coincide with Microsoft's Open Enrollment period
- which opens in November.

~~~
lanstein
Nope, the changes don't take effect for two years.

~~~
Empact
If you're switching to an HSA and anticipate good health in the near term, you
could benefit from switching early and saving the unused portion of
Microsoft's contribution to the HSA in your account, or otherwise contributing
and allowing it to appreciate as savings.

So yes, it could be helpful information for future planning.

------
lanstein
Incidentally, how is it that Mary Jo Foley has her name spelled wrong on her
blog heading?? (with a hyphen)

[http://www.zdnet.com/blog/microsoft/microsoft-to-tweak-
emplo...](http://www.zdnet.com/blog/microsoft/microsoft-to-tweak-employee-
benefits-and-more-news-of-the-week/7609?tag=mantle_skin;content)

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InclinedPlane
While MS's health care coverage had been very "generous" previously, make no
mistake: this is a pay cut for every MS employee.

~~~
cartano
I am already on an HSA so this actually is a pay increase for me.

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fizx
I've heard of people who've worked at microsoft for exactly their chosen
childbearing years. It's equivalent to 2x+ salary, and a nice paragraph on the
resume.

~~~
tptacek
Help me understand this math? We've had 2. They're expensive (and ours were
both complicated births), but 2x?

~~~
fizx
The maternity leave was ridiculously long. So not so much 2x salary, but they
worked 1/2 time.

------
natmaster
When you're taxed heavily by the government for having 'premium coverage', it
kind of gives you the incentive to make the coverage crappier.

~~~
marclove
Nice try, but the the excise tax on "premium" plans doesn't go into effect
until 2018. So if their only motivation was taxes, they'd have waited.

Furthermore, I'm not losing any sleep about the government taxing only the
portion of the value of a health plan that exceeds $27,500/yr -- in other
words, the first $27,500 remains tax-free -- when the average employer-
sponsored health plan is valued at $13,375/yr (2009). And here's what a
$20,400/yr plan looks like:

 _For the secretaries and environmental engineers, game wardens and van
drivers who work for the state of New Hampshire, surgery is free, even at
Boston’s top teaching hospitals if it’s necessary. So are MRIs, CT scans, and
X-rays._

 _Pregnant women pay nothing for prenatal care; alcoholics aren’t billed for
short stints in rehab. Seeing a therapist costs just $10, as many as 20 visits
a year, and prescription drugs top out at $30 for a three-month mail-order
supply. New Hampshire state employees get $450 annually toward gym
memberships, if they go regularly, or $200 toward their own treadmill - and
there’s a $150 annual reimbursement for yoga classes, diabetes clinics, and
nutritional counseling._

[http://www.boston.com/news/nation/washington/articles/2009/0...](http://www.boston.com/news/nation/washington/articles/2009/07/04/healthcare_overhaul_could_limit_tax_breaks_on_benefits/)

Yea, cry me a river if well-paid employees now have to buy their own
treadmills or pay for their own rehab.

~~~
larrywright
So if a company (or state government in your example) wants to provide health
care benefits to be competitive in the marketplace, they should be penalized
for that?

Additionally, your statement about "well-paid employees" doesn't seem to fit
with the article you quoted. Secretaries and van drivers aren't generally
highly paid positions.

~~~
marclove
_So if a company (or state government in your example) wants to provide health
care benefits to be competitive in the marketplace, they should be penalized
for that?_

I don't accept your premise that taxes = penalization.

Employers who pay their employees $35,000/yr have to pay more in federal taxes
than if they paid their employees $34,000/yr. I don't consider that a penalty
either. Its progressive taxation.

 _Additionally, your statement about "well-paid employees" doesn't seem to fit
with the article you quoted. Secretaries and van drivers aren't generally
highly paid positions._

"Well-paid employees" referred to Microsoft employees.

The government positions (secretaries & van drivers) mentioned in the article,
I would agree, probably aren't highly paid. They have a great health plan
because of the unions that represent them and fight for those benefits. If
they were non-union, they'd probably have much crappier health plan options.

But as the article said, the value of their plan is $20,400/yr. The excise tax
is on whatever amount exceeds $27,500/yr. So they, and the state government
they work for, will not be subject to any new taxes under the Health Care and
Education Reconciliation Act of 2010.

The reason I quoted the article was to show how great a $20,400/yr health plan
is. Just imagine the benefits you'd get from a $27,500+/yr health plan. The
people who have plans that expensive, most of them executives and other highly
paid employees, are not hurting and I could care less if they have to go with
a slightly less lavish plan that doesn't cover things like rehab, treadmills
and gym memberships or choose to pay what amounts to income taxes on the
portion that exceeds $27,500/yr.

~~~
d2viant
_I don't accept your premise that taxes = penalization.

Employers who pay their employees $35,000/yr have to pay more in federal taxes
than if they paid their employees $34,000/yr. I don't consider that a penalty
either. Its progressive taxation._

The two aren't mutually exclusive. Just because it's called "progressive
taxation" doesn't mean it isn't penalizing. I consider any tax at all
penalizing. It's the exact reason politicians raise taxes when they want to
discourage certain activities or lower them when they want to encourage more
of a certain activity.

~~~
marclove
_I consider any tax at all penalizing._

Heh, so all taxes should be abolished because the government shouldn't be
penalizing us for making money, right?

~~~
d2viant
I suppose if your goal was to let people keep as much money as possible, then
sure -- don't tax them on anything. However, voters have accepted a certain
amount of self-inflicted pain in exchange for services that the private sector
can't or won't provide. However, generally speaking I don't believe the
government is a particularly efficient means of reallocating society's
capital, I'd rather give entrepreneurs in the private sector the chance to do
it better.

~~~
marclove
Yea, those crazy voters...engaging in a little self-masochism because they
want things like police officers, firefighters, armed forces, potable water,
roads, education, and social security.

In general, I agree that the private sector can do better than the government
in many areas. The problem is, when it comes to health care coverage they
haven't, not when the #1 cause of bankruptcy in the United States is medical
bills.

Furthermore, entrepreneurs still have the chance to do it better. Nothing in
the health reform bill prevents them from doing so. So if you think you can do
better d2viant, more power to ya. There are tens of millions of Americans with
no health care coverage who are waiting for your better & more efficient
solution.

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aaronbrethorst
Goodbye last conceivable reason to ever go back to Microsoft.

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shasta
Wow, this is a gonna be a $2.5K pay cut for us, straight up. We used to take
our kids to the doctor whenever they were showing signs of sickness - fever,
cough, runny nose, skinned knees. Now we're going to have to weigh whether
they're sick enough to shell out $20 to take them to the doctor. And I guess
this is the end of lollipop Tuesdays.

