AOL is making a change in the way it distributes 401(k) matching contributions to employees because Obamacare has resulted in an "additional $7.1 million expense for us as a company," Chairman and CEO Tim Armstrong told CNBC on Thursday.
Starting in 2014, AOL will distribute the 50 percent company match on up to 6 percent of employees' pre-tax income in a lump sum after the end of the year, instead of paying the benefit throughout the year as it had done previously.
That means workers who leave AOL before Dec. 31 won't get the year's company match at all.
"For employees leaving to go to other employers, not matching those programs was probably the last thing on the list for us in terms of employee benefits that we wanted to keep," Armstrong explained in a "Squawk Box" interview. "I have a townhall meeting today [Thursday] with all the employees and I'm going to bring this up and talk about it."
He said the company had to make this difficult decision, so current employees won't be asked to cover new costs related to the Affordable Care Act.
First published February 6 2014, 7:22 AM
Matthew J. Belvedere
Matt Belvedere is a veteran journalist at the intersection of where live television news programs and the Internet meet â€” developing and managing an online and social media presence for CNBC's flagship morning show, "Squawk Box."
... Expand Bio
Following years of cable and major market live TV news production, Belvedere started in 2007 the award-winning video department at usnews.com, the website of U.S. News & World Report. He also managed online strategies there at a time when the magazine was transitioning to a digital first organization.