<br /> McKinsey, BCG, HUL and Samsung, these are the four marquee recruiters that either partially or wholly skipped the whole fad of <keyword id="121400" type="UNKNOWN" weightage="100" keywordseo="campus-placements">campus placements</keyword> from engineering colleges this year, but do they regret not being able to hire the talent they wanted?<br />
<br /> The answer is a simple no, since these companies went the <keyword id="1539152" type="UNKNOWN" weightage="100" keywordseo="preplacement-offer">preplacement offer</keyword> (PPO) route.<br />
<br />
However, this doesn’t necessarily mark the beginning of the end of the campus placement process. Also, if PPO doesn’t exactly give companies what they want, they are more than willing to participate in final placements, as confirmed by a HUL spokesperson to ET.<br />
<br />
"It goes without saying that not all companies can afford to go offcampus," Babu Viswanathan, professor and placement adviser, IIT-Madras, told ET. This also means that campus placements are here to stay, even as a handful of companies rely on PPOs to hire talent.<br />
<br />
Big companies like Amazon and Microsoft, however, are busy having the best of both worlds. <br />
<br />
"Both approaches are important for us and we would continue to invest in on-campus hiring as well as internships going forward," Raj Raghavan, head-HR at Amazon India, told ET.<br />
<br />
<a href="http://www.localbd.com.au/micrologo/images/Got%20the%20Job!.jpg"><em>Image source</em></a><br />

No campus placements, and yet these marquee recruiters got what they wanted

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0FCIJSTOFX6&amp;SMLS=1&amp;RW=1923&amp;RH=879#/SearchResult&amp;VBID=2C0FCIJSTOFX6&amp;SMLS=1&amp;RW=1923&amp;RH=879&amp;PN=2&amp;POPUPPN=85&amp;POPUPIID=2C0BF1S59KX17">Jonathan Ernst/Reuters</a></span></p><p class="caption">Environmental Protection Agency (EPA) Administrator Scott Pruitt takes questions about the Trump administration's withdrawal of the U.S. from the Paris climate accords during the daily briefing at the White House in Washington, U.S. June 2, 2017.</p></div><p></p></div></div></p><ul><li><strong>A communications staffer at the Environmental Protection Agency attempted to plant negative stories about Interior Secretary Ryan Zinke to distract from the bad news engulfing the EPA. </strong></li><li><strong>The staffer, Michael Abboud, told reporters that an Interior staffer teamed up with former EPA deputy chief of staff Kevin Chmielewski to leak harmful information about the EPA to the press.</strong></li><li><strong>But several reporters rejected the story, citing a lack of evidence, even as it was published by Patrick Howley of Big League <keyword id="6358883" type="UNKNOWN" weightage="100" keywordseo="politics">Politics</keyword>, a right-wing website founded by former Breitbart News employees. </strong></li></ul><p>A communications staffer at the Environmental Protection Agency, besieged recently by a series of scandals, attempted to plant negative news stories about Interior Secretary Ryan Zinke to distract from the bad press engulfing EPA administrator Scott Pruitt, <a href="https://www.theatlantic.com/politics/archive/1857/11/epa-leaks/559607/?preview=ntqrDVAI0e6eHCcLKWkYujgOXcA">The Atlantic reported Thursday</a>. </p><p><span>Michael Abboud, a young member of Pruitt's press team, shopped the stories around with the intention of "taking the heat off Pruitt," angering some at the White House, according to multiple sources who <a href="https://www.theatlantic.com/politics/archive/1857/11/epa-leaks/559607/?preview=ntqrDVAI0e6eHCcLKWkYujgOXcA">spoke with The Atlantic</a>. </span></p><p><span>The EPA denied the allegations about the staffer's actions, calling them "categorically false." </span></p><p><span>Abboud told reporters that an Interior staffer teamed up with former EPA deputy chief of staff Kevin Chmielewski to leak harmful information about the EPA to the press. </span></p><p><span>He claimed that Chmielewski, who says he was forced out after objecting to some of Pruitt's spending decisions, was seeking revenge on Pruitt, while the Interior staffer hoped to improve Zinke's standing in contrast with Pruitt, The Atlantic reported. </span></p><p>But several reporters rejected the stories that Abboud shopped, citing a lack of evidence, even as it was <a href="https://bigleaguepolitics.com/breaking-leaker-interior-department-found/">published</a> by Patrick Howley of Big League Politics, a right-wing website founded by former Breitbart News employees. </p><p><span>The Interior Department's White House liaison reportedly complained about Abboud's behavior to the White House Presidential Personnel Office, where officials were "enraged."</span></p><p><span>But the PPO does not have the authority to fire Abboud, who's employment is controlled only by Pruitt. It is unclear whether or to what extent Pruitt was aware of the situation. </span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/heres-how-donald-trump-has-changed-since-80s-tina-brown-vanity-fair-diaries-2018-4">Here's how Donald Trump has changed since the '80s</a></h3>        <div>                    </div>    </div>

An EPA staffer reportedly leaked false stories about a cabinet official in order to 'take the heat off' Scott Pruitt

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Mark Wilson/Getty Images</span></p></div><p></p></div></div></p><ul><li><strong>Jared Kushner slammed Palestinian leadership for its lack of commitment to peace in a rare interview with an Arabic-language Palestinian newspaper. </strong></li><li><strong>Kushner's interview is widely seen as an attempt to reach out directly to the Palestinian people at a time when tensions are high between the Trump administration and the Palestinian Authority. </strong></li><li><strong>Kushner has been in the Middle East promoting peace plans which the White House said could be released "soon." </strong></li></ul><p><br />Presidential adviser and son-in-law Jared Kushner slammed Palestinian leadership for its lack of commitment to peace in a rare interview with an Arabic-language Palestinian newspaper. </p><p>During a tour of the region, Kushner spoke to <a href="http://www.alquds.com/articles/1529795861841079700/">Al Quds newspaper</a> in what is seen as an attempt to reach out directly to the Palestinian people at a time when tensions are high between the Trump administration and the Palestinian Authority. </p><p><span>"President Abbas says that he is committed to peace and I have no reason not to believe him," Kushner said in the interview published Sunday. </span></p><p><span>"However," he added, "I do question how much President Abbas has the ability to, or is willing to, lean into finishing a deal. He has his talking points which have not changed in the last 25 years. There has been no peace deal achieved in that time. To make a deal both sides will have to take a leap and meet somewhere between their stated positions. I am not sure President Abbas can do that."</span></p><p>Kushner has been in the Middle East promoting peace plans which the White House said could be released "<a href="https://www.reuters.com/article/us-usa-israel/trump-envoys-netanyahu-discuss-israeli-palestinian-peace-prospects-idUSKBN1JI1XF">soon</a>." Kushner and his White House envoy met with leaders from Saudi Arabia, Egypt, Qatar, Jordan, and Israel but <span>did not meet with the Palestinians, </span>who suspended US ties after President Donald Trump recognized Jerusalem as Israel's capital in December. </p><p>The 37-year-old, who has been tasked with reaching a Middle East peace agreement, said he was willing to resume talks with Abbas, but that a deal "will be up to <span>the leadership and the people of both sides to determine what is an acceptable compromise in exchange for significant gains." </span></p><p><span><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Thaer Ghanaim/PPO via Getty Images</span></p><p class="caption">Palestinian President Mahmoud Abbas (R) met with Jared Kushner last year in the West Bank West Bank to broker a peace deal.</p></div><p></p></div></div></span></p><p><span>While the White House has given little detail about the peace plan, which is said to be nearly complete, it reportedly tries to address the humanitarian situation in Gaza as priority. </span></p><p>In his interview, Kushner tried to appeal directly to the Palestinian people, saying: "<span>You deserve to have a bright future." </span></p><p><span>"Now is the time for both Israelis and Palestinians to strengthen and refocus their leadership, to encourage them to be open to a solution and not to fear the attempt. Over the years, you, the Palestinian people, have paid the price.  Show your leadership that you support efforts to achieve peace, let them know your priorities and give them the courage to maintain an open mind towards achieving them."</span></p><p>Palestine's top peace negotiator Saeb Erekat  <a href="https://www.haaretz.com/middle-east-news/palestinians/.premium-saeb-erekat-kushner-and-greenblatt-are-trying-to-topple-the-pa-1.6199699">cast doubt</a> on the peace process on Saturday and claimed that Kushner's Middle East tour is an attempt to overthrow the Palestinian leadership.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/what-happened-at-the-trump-north-korea-summit-2018-6">Why the North Korea summit mattered even if it was 'mostly a photo op'</a></h3>        <div>                    </div>    </div>

Jared Kushner rips into Palestinian leader Abbas' ability to make peace

<br /> In an unexpected turn of events, star recruiter <keyword id="6372399" type="COMPANY" weightage="80" keywordseo="McKinsey">McKinsey</keyword> is hiring graduates directly through its alumni network, website and social media, bypassing the placement process at the Indian Institute of Technology (<keyword id="6354859" type="COMPANY" weightage="80" keywordseo="IIT">IIT</keyword>) campuses. McKinsey will be thus hiring graduates from the IIT class of 2016 through interviews conducted at its offices.<br /> As expected, IIT officials fear that this may eventually undermine the sanctity of the placement process at India's premier <keyword id="27859" type="ORGANIZATION" weightage="80" keywordseo="engineering">engineering</keyword> institutes. <keyword id="65655" type="UNKNOWN" weightage="80" keywordseo="placements">Placements</keyword> at all older IITs are set to kick off on December 1.<br />
<br />
McKinsey partner Sasi Sunkara told ET the consultancy firm decided to take this route as all IITs begin placements on the same day - December 1. This, he said, limits the firm's visits only to a few campuses, while it wanted partners to meet all the candidates before making an offer.<br />
<br /> "We want to be inclusive. This process enhances diversity of candidates and ensures proper calibration across candidates of a similar profile. It also helps us meet 100% of our shortlisted candidates and conduct the complete interview process," Sunkara added. "In the campus <keyword id="177739" type="PERSON" weightage="80" keywordseo="recruiting">recruiting</keyword> process, this is not guaranteed due to spot offers, and PPO (pre-placement offers) candidates withdrawing from the process." <br />
<br />
Image credit: Indiatimes<br />

McKinsey bypasses IIT placement process to hire students through in-house interviews

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Chip Somodevilla/Getty Images</span></p><p class="caption">EPA Administrator Scott Pruitt</p></div><p></p></div></div></p><ul><li><strong>Two of Environmental Protection Agency chief Scott Pruitt's top aides - both of whom had received large and controversial pay raises - are resigning this week. </strong></li><li><strong>Sarah Greenwalt, Pruitt's 30-year-old senior counsel, and Millan Hupp, the 26-year-old director of scheduling and advance, are the latest in a string of top staffers to leave the agency.</strong></li><li><strong>Both aides received steep pay raises that were reportedly obtained through a legal loophole after the White House refused to approve them. </strong></li></ul><p>Two of Environmental Protection Agency chief Scott Pruitt's top aides are resigning amid fresh controversies stemming from the administrator's leadership. </p><p>Sarah Greenwalt, Pruitt's 30-year-old senior counsel, and Millan Hupp, the agency's 26-year-old director of scheduling and advance, are the latest in <a href="http://www.businessinsider.com/2-of-epa-chief-scott-pruitts-aides-resign-amid-ethics-investigations-2018-5">a string of top staffers</a> to leave the EPA, <a href="https://www.theatlantic.com/politics/archive/2018/06/top-aide-to-epa-administrator-scott-pruitt-resigns/561974/">The Atlantic</a> and <a href="https://twitter.com/EricLiptonNYT/status/1004450726557507587">The New York Times</a> reported Wednesday. </p><p>Hupp made headlines this week after reports <a href="https://www.washingtonpost.com/national/health-science/pruitt-had-aide-do-numerous-personal-tasks-including-a-hunt-for-a-used-trump-hotel-mattress/2018/06/04/a1f72c84-6043-11e8-b2b8-08a538d9dbd6_story.html?utm_term=.0c075bc82878">emerged</a> that she told congressional investigators that she spent months scouting a new DC apartment for Pruitt, scheduled his family vacations, and even looked into buying him a used mattress from the Trump International Hotel - all during work hours.</p><p>A top agency official told The Atlantic that Hupp is "tired of being thrown under the bus by Pruitt" and concerned about the amount of media attention she has received. Hupp's last day will be Friday. </p><p>Pruitt is currently under a dozen separate investigations into possible ethical violations, including those related to his regular <a href="http://www.businessinsider.com/epa-chief-scott-pruitt-first-class-flights-2018-2">first-class flights</a> and copious spending on his <a href="http://www.businessinsider.com/scott-pruitts-security-team-bulletproof-car-and-furniture-2018-4">personal security</a>.</p><p>Hupp and Greenwalt, both part of a tightly-knit group of top aides Pruitt brought with him from Oklahoma, also found themselves at the center of controversy earlier this spring, after <a href="https://www.theatlantic.com/politics/archive/2018/04/pruitt-epa/557123/">The Atlantic reported</a> that the two received steep pay raises without White House approval. Greenwalt received a raise of over $66,000, bringing her salary to $164,200, and Hupp had her pay bumped from $86,460 to $114,590.</p><p>After the Presidential Personnel Office reportedly refused to sign off on the proposed pay hikes, the agency approved the raises through a backdoor provision in the Safe Drinking Water Act that allows the administrator to hire up to 30 employees without White House or congressional approval in areas of critical need.</p><p>According to internal emails reported on by The Atlantic on April 9, Greenwalt insisted that Pruitt personally sanctioned her raise.</p><p>Greenwalt "definitively stated that Pruitt approves and was supportive of her getting a raise," an administration official who had seen the emails told The Atlantic.</p><p>In an April 9 statement, Jackson said Pruitt was not aware of the amount the staffers' salaries were being raised by, nor was he aware of the process through which they were implemented. But Jackson did not say that Pruitt was unaware that the raises were being given.</p><p>"Administrator Pruitt had zero knowledge of the amount of the raises, nor the process by which they transpired," Jackson said in his statement. "These kind of personnel actions are handled by myself, EPA's HR officials and PPO."</p><p>But if Pruitt was in fact unaware of the raises, he may have violated the law, as the administrator is required to approve all hiring and salary changes under the Safe Drinking Water Act.</p><p>Earlier this week, The Washington Post <a href="https://www.washingtonpost.com/national/health-science/scott-pruitt-enlisted-an-epa-aide-to-help-his-wife-find-a-job--at-chick-fil-a/2018/06/05/b798e4e4-5eac-11e8-9ee3-49d6d4814c4c_story.html?utm_term=.0d584b7435b5">reported</a> that Hupp's sister, Sydney Hupp, who previously worked as a scheduler for Pruitt at the EPA, tried to <a href="http://www.businessinsider.com/scott-pruitt-wife-job-at-chick-fil-a-2018-6">organize a call</a> between Pruitt and the president of fast-food chain Chick-fil-A to discuss Pruitt's wife's interest in opening a Chick-fil-A franchise. </p><p>The revelation generated new concerns that Pruitt has used his government position for personal gain. </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/economist-weighted-voting-could-help-save-us-democracy-2018-5">This top economist has a radical plan to change the way Americans vote</a></h3>        <div>                    </div>    </div>

Two of Scott Pruitt's closest aides resigned from the EPA after receiving steep pay raises that were rejected by the White House

<p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><ul><li><strong>Walt Disney World and Disneyland raised ticket prices on Sunday.</strong></li><li><strong>A one-day ticket to Disney World during the busiest time of year now costs $129, a $5 price increase.</strong></li><li><strong>Some Disney fans say that it is becoming too expensive to visit the parks.</strong></li></ul><p><br>Walt Disney World and Disneyland just quietly increased how much it costs to visit the parks.</br></p><p>A regular, one-day ticket to Disney World's Magic Kingdom now costs $119, a $4 increase, <a href="http://abcnews.go.com/US/wireStory/increased-prices-disney-parks-florida-california-52999981">the Associated Press reported Sunday.</a></p><p>The cost of "value" tickets, sold during less crowded times of year, increased by $2 to $109 for adults. Peak ticket prices, for the busiest times of year, now cost $129 for adults, a $5 increase.</p><p>Disney also significantly increased how much Florida residents pay for annual passes. The premium Platinum pass now costs Floridians <a href="http://www.orlandosentinel.com/business/os-disney-ticket-price-increase-20180211-story.html" target="_blank" rel="noopener">$729</a>, up from $679.</p><p>Many Disney fans had already braced themselves for the price hike. Disney World and Disneyland have announced ticket price every February over the last several years.</p><p>But some people say that the latest price hike has contributed to making it too expensive for the average family to visit Disney's theme parks.</p><p>"People will need to start selling their kidneys on the black market to be able to afford a day at Disney," one person <a href="https://twitter.com/RhodesJohn82/status/962714882855657475">wrote on Twitter.</a> "Pathetic."</p><p>The price changes seem to be part of Disney's plan to get people to visit the parks for as many days as possible. Tickets are cheaper if customers buy multi-day passes, dropping to $44.50 per day for adults getting a 10-day pass.</p><p></p><div class="KonaFilter image-container display-table"><div><div class="image on-image"></div><p></p></div></div><p>Last week, <a href="http://markets.businessinsider.com/stock/DIS-quote" target="_blank" rel="noopener">Disney</a> reported that its parks and resorts generated $5.2 billion in the most recent quarter, an increase of 13%. Attendance grew 6% in the same period.</p><p class="tagline"></p><div id="categorypromo" style="border:1px solid silver; min-height:90px; padding:10px;vertical-align:top;box-sizing: content-box;"><a href="http://read.bi/retail-2018"></a><strong>EXCLUSIVE FREE SLIDE DECK:</strong><br>The Future of <keyword id="6354851" type="ORGANIZATION" weightage="100" keywordseo="Retail">Retail</keyword> 2018 by the BI Intelligence Research Team.<br><strong><a href="http://read.bi/retail-2018">Get the Slide Deck Now »</a></strong></br></br></div><div></div><div></div><div></div><div></div><div></div>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/disney-star-wars-land-preview-disneyland-open-2017-7">Disney revealed what Star Wars Land will look like</a></h3>        <div>                    </div>    </div></hr>

Disney World just quietly raised ticket prices to up to $129 for a single day - and people are freaking out

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Brian Snyder/Reuters</span></p><p class="caption">EPA Administrator Scott Pruitt</p></div><p></p></div></div></p><ul><li><strong>EPA chief Scott Pruitt appeared to change his story regarding steep pay raises given to two of his top staffers.</strong></li><li><strong>During an interview on April 4, Pruitt said he did not know about the raises at all. </strong></li><li><strong>But during his congressional testimony on Thursday, Pruitt refused to say whether or not he knew about the raises, instead saying he was not aware of the amount the salaries were raised by or that the White House had refused to approve them.</strong></li></ul><p>Environmental Protection Agency chief Scott Pruitt appeared to change his story regarding steep pay raises given to two of his top staffers, which he originally said he knew nothing about, during congressional testimony on Thursday. </p><p>Rep. Paul Tonko, a New York Democrat, questioned on Pruitt on his knowledge of the raises, which were given to two aides Pruitt brought to Washington from Oklahoma. </p><p>"I was not aware of the amount, nor was I aware of the bypassing or the [White House Office of Presidential Personnel] process not being respected," Pruitt said. </p><p><span>Pressed by the congressman, Pruitt refused to say whether he knew about the raises at the time. </span></p><p><span>The EPA chief said that he "delegated" authority to his chief of staff, Ryan Jackson, who signed off on the hefty raises.</span></p><p><span>But in an interview with Fox News on April 4, Pruitt told a different story. </span></p><p><span>The administrator repeatedly claimed in the Fox interview that he did not know about the pay raises, or who signed off on them, before they were made or at the time they were made. He said he only found out about them the day before that interview, April 3.  </span></p><p>"I did not know about the pay raise. I did not approve the process," Pruitt told Fox, adding that he had reversed the decisions and that the raises "should not have happened." </p><p><span>Sarah Greenwalt, Pruitt's 30-year-old senior counsel, received a raise of over $66,000, bringing her salary to $164,200. And Millan Hupp, Pruitt's 26-year-old scheduling director, had her pay bumped from $86,460 to $114,590. </span></p><p><span>After the White House reportedly refused to sign off on the proposed pay hikes for Greenwalt and Hupp, the EPA used a backdoor provision through the Safe Drinking Water Act, which allows the </span><span>administrator to hire up to 30 employees without White House or congressional approval in areas of critical need, to approve the raises. </span></p><p>According to internal emails reported on <a href="https://www.theatlantic.com/politics/archive/2018/04/pruitt-epa-raises/557561/">by The Atlantic</a> on April 9, Greenwalt insisted that Pruitt approved her raise. </p><p>Greenwalt "definitively stated that Pruitt approves and was supportive of her getting a raise," an administration official who has seen the emails <a href="https://www.theatlantic.com/politics/archive/2018/04/pruitt-epa-raises/557561/">told The Atlantic</a>. </p><p>A second administration official told The Atlantic that the email "essentially says, 'The administrator said that I should get this raise.'" </p><p>Jackson took the fall for the controversial decision. </p><p>In an April 9 statement, Jackson said Pruitt was not aware of the amount the staffers' salaries were being raised by, nor was he aware of the process through which they were implemented. But Jackson did not say that Pruitt was unaware that the raises were being given. </p><p>"Administrator Pruitt had zero knowledge of the amount of the raises, nor the process by which they transpired," Jackson said in his statement. "These kind of personnel actions are handled by myself, EPA's HR officials and PPO." </p><p>But if Pruitt was in fact unaware of the raises, he may have violated the law, as the administrator is required to approve all hiring and salary changes under the Safe Drinking Water Act.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/saudi-crown-prince-salman-met-trump-oprah-bill-gates-2018-4">Why the Saudi crown prince met with Trump, Oprah, Bill Gates, and Jeff Bezos</a></h3>        <div>                    </div>    </div>

Scott Pruitt is changing his story about approving big pay raises to close aides

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.facebook.com/StudioDentalSF/">Facebook/Studio Dental</a></span></p></div><p></p></div></div></p><p>Startup-life comes with some pretty sweet perks. There are the free lunches, shuttle buses, and branded t-shirts. A lucky few may even work in offices equipped with nap pods.</p><p>But only in Silicon Valley will a truck bring a dental office to tech companies' doors.</p><p>Studio Dental, founded in 2014, is the first dental office on wheels. The truck visits patients at work, making regular visits to tech companies like Google and Airbnb to provide employees services from teeth cleanings to wisdom teeth removals in the parking lot.</p><p><span><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="https://www.facebook.com/StudioDentalSF/">Facebook/Studio Dental</a></span></p><p class="caption">Sara Creighton, cofounder of Studio Dental.</p></div><p></p></div></div>"Dentistry is in serious need of sprucing up - the industry is stigmatized as old, smelly, and often times scary," cofounder and dentist Sara Creighton <a href="https://rockhealth.com/uber-teeth-founders-story/">told Rock Health</a> in a 2014 interview.</span></p><p><span>Creighton, who built her first practice while still in dental school, set out to create a dental office that would actually <em>entice </em>people to come in for a check-up. She thought about how she could incorporate technology and smart design, and teamed up with cofounder <span>Lowell Caulder, an investment banker and a Harvard Business School dropout, to bring her vision to life.</span></span></p><p><span><span>Studio Dental fits on a 26-foot-long trailer bed and includes a waiting area, a sterilization room, and two patient stations. Once you step inside, you forget almost immediately that you're in a truck. Cut-outs in the walls and wood cabinets create constellation-like patterns that draw the eyes upward - because really, don't you hate looking at a plain stucco ceiling while you sit in a dental chair? </span></span></p><p><span><span>Televisions that stream Netflix also hang overhead.</span></span></p><p><span><span><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.facebook.com/StudioDentalSF/">Facebook/Studio Dental</a></span></p></div><p></p></div></div></span></span></p><p>The office may appeal to techies more than traditional dental offices, though it isn't just for people who work in tech - patients book appointments online, receive email receipts after their visit, and view <span>digital X-rays and impressions on the website.</span></p><p><span><a href="http://www.studiodental.com/faqs/">According to the website</a>, the company's prices are in the 80th percentile of Bay Area dental practices. It accepts PPO plans from most insurance providers.</span></p><p><span></span>Studio Dental has over 25 corporate clients, <a href="http://money.cnn.com/2015/12/07/technology/silicon-valley-perks-trucks/index.html?section=money_latest">including</a> well-known tech companies Bot &amp; Dolly, Dropbox, Jawbone, Twitter, and Square. CNN Money <a href="http://money.cnn.com/2015/12/07/technology/silicon-valley-perks-trucks/index.html?section=money_latest">reported</a> in 2015 that the business made about $1 million in its first year.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.facebook.com/StudioDentalSF/">Facebook/Studio Dental</a></span></p></div><p></p></div></div></p><p>Crighton <a href="http://www.fastcoexist.com/3062556/fund-this/a-drone-for-finding-land-mines-and-then-blowing-them-up">told Fast Company in 2015</a> that she hopes to add more trucks, more dentists, and more cities. Patients may some day be able to track a truck's location and book appointments through an app - "like an Uber almost, so you can see which truck is near you," Creighton said.</p><p>The "uberification" of dental care is officially here.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/dentist-explains-right-way-brush-your-teeth-2016-7">The biggest mistake people make when brushing their teeth</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="1zcWYwNTE6ScJBoSYH2xIpL5Z5FTBGnA" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

This dentist office on wheels gives teeth cleanings and exams in Silicon Valley parking lots

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It has never happened before.  Pre-placement offers (PPOs) at the Indian Institutes of Technology (IITs) have increased by almost 50%. Even before the actual placement kick starts by the end of this year, most students have a job in hand.<br />
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From 35 to 50, that’s precisely what IIT Madras had received in terms of PPOs. IIT Bombay has so far received 123 PPOs, exceeding the 110 it got all of last year. IIT Kanpur has received 90, which is 24 more than the tally by last September. IIT Kharagpur has seen a spurt of almost 55% in PPOs to 142 until now from 92 last year. Several investment banking and financial services companies are making a comeback to IIT campuses after a gap of two years or so. These include JP Morgan, Morgan Stanley and Barclays at Madras and Kharagpur. Other are making their debut, like Credit Suisse and Capital One at IIT Bombay. Ecommerce companies and startups remain the largest recruiters.<br />
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PPOs are a key source of talent for Amazon India. "At Amazon we believe that interns are our future leaders," Raj Raghavan, director of human resources to ld The Economic Times. "More than 50% of our campus hiring comes through pre-placement offers and would continue to be one of the key areas of identifying and hiring talent."<br />
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Over the last two years, the conversion of IIT interns to PPOs has seen an increase at Amazon. More than 60% of its IIT hiring now takes place through the PPO route. This year's top recruiters at the IITs through PPOs include Samsung India, Adobe, Microsoft, Reliance Industries, Tata Steel, Flipkart and Strand Life Sciences.<br />
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Samsung India's IIT interns rose around 60% from last year. Most have got PPOs and are sto join. "We believe that internships give both the interns and the organisation an opportunity to interact with each other over an extended period of time," said a Samsung India spokesperson. "This makes it easier for students to decide once they have an offer, as well as assimilate into the organisation faster once they join."<br />
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Companies visiting campuses to offer PPOs for the first time include Texas Instruments and JSW Group, American Express and Axsiom at IIT-BHU (Banaras Hindu University); Bentley Systems India, Fuzzy Logix, Innoplexus Consulting Services, Quetzal Online, Glow Homes Technologies and Zimply at IIT Roorkee; and JP Morgan at IIT Bombay, besides the Credit Suisse and Capital One cited earlier. Apart from these, there are the companies begun by old students.<br />
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Happy hours for IITians: Pre-placement offers Rs 1 crore compensation

<p style="font-size: 14px;"><em>Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.</em></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Hero Images/Getty</span></p><p class="caption">Most Americans need to have health insurance to afford medical care.</p></div><p></p></div></div></p><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/health-insurance">Health insurance</a> is not easy to navigate, but most Americans can't afford the cost of medical care without it.</li><li>About <a href="https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMSProgramStatistics/2017/Downloads/MDCR_ENROLL_AB/2017_CPS_MDCR_ENROLL_AB_1.pdf">58 million people</a> over 65 are insured, in part, through <a href="https://www.businessinsider.com/healthcare-in-retirement-overlooked-costs-medicare-2019-4">Medicare</a>, while nearly half of Americans get private health insurance through an employer.</li><li>Those not covered by an employer or Medicare can get private health insurance through <a href="https://www.healthcare.gov/">HealthCare.gov</a>, where they may qualify for tax credits and subsidies.</li><li>You can also shop for private health insurance off the government-run Health Insurance Marketplace, directly through a health insurer, on private marketplaces, or through a broker.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories.</a></li></ul><p>Health insurance is not easy to navigate, <a href="https://www.businessinsider.com/how-to-pick-choose-health-insurance-plan-2018-10">even for experts</a>.</p><p><span>But most Americans need insurance to afford healthcare. Choosing the plan that's right for you may take some research, but it serves as your first line of defense against <a href="https://www.commonwealthfund.org/chart/2019/inadequate-coverage-associated-more-problems-paying-medical-bills">medical debt</a>, one of biggest sources of debt among consumers in the US.</span></p><p><span>Here's how to start:</span></p><h2>How to get health insurance</h2><h3>1. Find a job with healthcare coverage</h3><p>While folks over 65 qualify for <a href="https://www.businessinsider.com/category/medicare">Medicare</a>, the government's health insurance program, Americans under age 65 are responsible for obtaining their own health insurance. However, adults can remain on their parents' policy until age 26.</p><p>Some 158 million Americans get their health coverage through their employer or a spouse's employer, according to <a href="https://www.commonwealthfund.org/publications/issue-briefs/2019/feb/health-insurance-coverage-eight-years-after-aca">the Commonwealth Fund</a>. Employees who are eligible for coverage through work usually don't need supplemental health insurance.</p><p>The human resources team at your company can walk you through exactly what your plan offers and how much you'll be expected to pay for premiums, deductibles, coinsurance, and copayments. Your plan may also offer vision and dental coverage at an extra cost.</p><p>Some companies, including Whole Foods, Starbucks, and Costco, offer full health insurance benefits for part-time employees as well.</p><h3>2. If you recently left a full-time job with health coverage, consider COBRA</h3><p>If you recently left a full-time job where you had health insurance, you can opt to continue coverage until you find a new plan.</p><p>Named for the Consolidated Omnibus Budget Reconciliation Act of 1985, <a href="https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf">COBRA</a> allows a person to continue receiving the exact same health coverage they've been getting from their employer after they leave. It's offered by most employers with 20 or more employees.</p><p>While COBRA enables a former employee to retain coverage at group insurance rates, the individual is often required to pay both the employer and the employee's portion, plus an administrative fee, driving up costs significantly.</p><p>An individual usually has 60 days to elect to receive coverage under COBRA after leaving their employer. Coverage can last between 18 and 36 months, depending on the nature of the "qualifying event," or the reason for leaving.</p><h3>3. Find out whether you qualify for Medicaid</h3><p>Medicaid is the government's health insurance program for Americans who are low-income, have children, are pregnant, or are disabled. You may <a href="https://www.policygenius.com/blog/a-state-by-state-guide-to-medicaid/">qualify for Medicaid</a> if your income is under the federal poverty level, depending how many people are in your household, according to insurance-comparison site Policygenius.</p><p>The 2019 income limit for a four-person household is $25,750 in every state except Hawaii and Alaska, which have higher guidelines. Find out if you qualify for Medicaid, or other income-based subsidies, at <a href="https://www.healthcare.gov/medicaid-chip/getting-medicaid-chip/">HealthCare.gov</a>.</p><h3>4. Browse the Health Insurance Marketplace for private insurance options</h3><p>Established by the Affordable Care Act, <a href="https://www.healthcare.gov/">the Health Insurance Marketplace</a> is a resource available to most US citizens and can help narrow down private health insurance coverage options, and find out whether tax breaks or other subsidies are available. Eleven states and Washington, DC use their own health insurance marketplace, which you can find <a href="https://www.healthcare.gov/marketplace-in-your-state/">here</a>.</p><p>Notably, insurance offered through the Marketplace cannot deny any individual coverage, even for pre-existing conditions. According to Policygenius, these plans all minimally cover the <a href="https://www.policygenius.com/health-insurance/faq/essential-benefits-covered-in-all-health-plans/">10 essential benefits</a> mandated by the federal government, including emergency services and pregnancy and newborn care, plus any benefits required by your state of residence. Some also include <a href="https://www.healthcare.gov/coverage/dental-coverage/">dental coverage</a>.</p><p>First you have to fill out an application <a href="https://www.healthcare.gov/unemployed/coverage/">with your estimated income</a> for the year and information about your spouse and/or dependents (here's a handy <a href="https://www.healthcare.gov/downloads/application-checklist.pdf">checklist</a>). This will <span>generate a list of the health plans available to you.</span></p><p>When comparing plans, you'll want to look at enrollment fees, premium costs, per individual and per family deductibles, copayments, hospital costs, and coverage details, like whether extra costs are levied to visit out-of-network providers.</p><p>To get a sense of how much you could wind up paying in a worst-case scenario, a quick trick is to add up your total annual premium and the maximum out-of-pocket limit of your insurance choices, <a href="https://www.businessinsider.com/how-to-pick-choose-health-insurance-plan-2018-10">suggests</a> Business Insider's healthcare editor Zachary Tracer.</p><p>The Marketplace's <a href="https://www.healthcare.gov/quick-guide/dates-and-deadlines/">open enrollment period</a> for 2020 health coverage runs from November 1, 2019 to December 15, 2019. However, losing job-based coverage, getting married, or having a baby at any point during the year may qualify you for a <a href="https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/">special enrollment period</a>.</p><h3>5. Understand the metal tiers</h3><p>Every plan available on the Marketplace must offer four price tiers: bronze, silver, gold, and platinum. An estimated ratio of what the insurer pays versus what the individual pays is the distinguishing factor between the levels, Policygenius <a href="https://www.policygenius.com/health-insurance/learn/health-insurance-basics-and-guide/#key-features-that-decide-how-much-you-pay">explains</a>.</p><p>Only copayments, coinsurance, and the deductible are taken into account to determine which tier the plan is (monthly premiums are not included). The individual is responsible for the highest share of the cost in a bronze plan (40%), though the insurer still takes on the majority (60%), and the lowest share of the cost in a platinum plan (10% vs. the insurer's 90%).</p><p>As such, monthly premiums usually correlate to the tiers - bronze plans have the lowest premiums, while platinum plans often have the highest premiums, and silver and gold fall somewhere in between, according to Policygenius. Importantly, this does not indicate the quality of the healthcare a person will receive under the plan.</p><h3>6. Understand the types of health insurance</h3><p>Health insurance plans are also categorized by network coverage. Here are the five main types:</p><ul><li><strong>Health Maintenance Organization (HMO)</strong>: "The most restrictive plan," according to Policygenius, which requires you to choose an in-network primary care physician and obtain a referral to see a specialist. These plans do not cover any out-of-network costs.</li><li><strong>Preferred Provider Organization (PPO)</strong>: "The least restrictive plan," according to Policygenius, which gives you the option to see an out-of-network provider for a higher cost. These do not require a referral to see a specialist, but do usually come with higher premiums.</li><li><strong>Exclusive Provider Organization (EPO)</strong>: A hybrid plan which does not require a referral for out-of-network specialists and does not cover costs.</li><li><strong>Point of Service (POS)</strong>: Another hybrid plan which requires an in-network primary care physician, but allows out-of-network options at a higher cost. It also requires a referral for specialists.</li><li><strong>High deductible health plan (HDHP)</strong>: These plans typically have low or no premiums, but require the individual meet a high deductible or out-of-pocket maximum before insurance coverage kicks in. They also come with a <a href="https://www.businessinsider.com/how-to-use-health-savings-account-hsa-investing-retirement">health savings account</a> (HSA), a powerful, triple tax savings investment tool.</li></ul><h3>7. Compare private insurance plans off the government-run marketplace</h3><p>You can also shop for private health insurance off the Marketplace. These are plans sold directly by the health insurer, through a privately-run health insurance marketplace, or through a third-party broker like <a href="https://policygenius.com/health-insurance/">Policygenius</a>.</p><p>While these plans still abide by the rules outlined in the Affordable Care Act - they must cover the <a href="https://www.policygenius.com/health-insurance/faq/essential-benefits-covered-in-all-health-plans/">10 essential benefits</a>, at least - they're ineligible for any tax credits or subsidies from the government, even if your income qualifies. Notably, they won't have the same metal tier designations (bronze, silver, gold, platinum) as the plans listed on the Marketplace.</p><p>Despite not allowing tax breaks, the policies not offered on the Marketplace may be cheaper and/or better suited for your situation.</p><h3>8. Consider a health-sharing plan</h3><p>Health-sharing ministries are an alternative to run-of-the-mill health insurance. These non-profit organizations are funded by monthly premiums, called the sharing amount, paid by the members and require a deductible-like amount to be met before coverage kicks in.</p><p>While not actual insurance, <a href="https://www.policygenius.com/blog/what-is-a-healthcare-sharing-ministry/">health-sharing ministries</a> do meet the standards outlined in the Affordable Care Act for qualifying health insurance. They do, however, operate on the good will of others - they're largely voluntary and recourse isn't guaranteed.</p><p>These organizations are generally faith-based and require that members follow guidelines, such as no tobacco use and regular worship, in lieu of a standard evaluation based on gender, age, weight, and other health factors. As with anything, understand the fine print before signing on.</p><h3>Related coverage from<span> </span><a href="https://www.businessinsider.com/category/personal-finance-how-to">How to Do Everything: Money</a>:</h3><ul><li><h3><a href="https://www.businessinsider.com/how-much-life-insurance-do-i-need">How much life insurance do I need?</a></h3></li><li><h3><a href="https://www.businessinsider.com/what-is-the-difference-between-term-and-whole-life-insurance">Term vs. whole life insurance</a></h3></li><li><h3><a href="https://www.businessinsider.com/how-does-term-life-insurance-work">How does term life insurance work?</a></h3></li><li><h3><a href="https://www.businessinsider.com/when-to-get-life-insurance">When to get life insurance</a></h3></li></ul><p class="tagline"><p style="font-size:14px;"><em>Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.<em></em></em></p></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/how-tennis-balls-are-made-processed-penn-manufactured-satisfying-machines-2017-5">Tennis balls are made using this 11-step process - and it's quite satisfying to watch</a></h3>        <div>                    </div>    </div>

How to get health insurance to pay for doctors, dentists, and emergencies

As the stage is all set for students of India’s top B-schools to get placed,<a href="http://www.businessinsider.in/searchresult.cms?query=eCommerce+"> eCommerce companies</a>, too, are eying the best talent this year. As per an Economics Times report, the top B-school graduates, this year, are in receipt of offers, which are double as compared to what was on platter a year ago.<br />
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The pre-placement trend is followed by the <a href="http://www.businessinsider.in/searchresult.cms?query=summer+internship">summer internship program,</a> which generally starts in July-August and continues till December. Companies like the <keyword id="136162" type="CITY" weightage="20" keywordseo="Boston-Consulting-Group">Boston Consulting Group</keyword>, Amazon, <keyword id="6369697" type="COMPANY" weightage="20" keywordseo="Godrej">Godrej</keyword> and <keyword id="15492" type="CITY" weightage="20" keywordseo="Vodafone">Vodafone</keyword> are following the trend aggressively to get tried and tested talent on board.<br />
 <br /> Gurgaon-based Management Development Institute has received 31 offers so far. The offers are from the companies including <keyword id="54572" type="CITY" weightage="20" keywordseo="PepsiCo">PepsiCo</keyword>, <keyword id="6359480" type="PERSON" weightage="20" keywordseo="Aditya-Birla">Aditya Birla</keyword> Group, Vodafone, <keyword id="10875" type="CITY" weightage="20" keywordseo="IBM">IBM</keyword>, Reckitt Benckiser and the Boston Consulting Group. It’s important to note that the current offers witness a major hike as compared to 2014.<br />
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Kanwal Kapil, the placement chairperson of Management Development Institute, said, "We are expecting e-commerce firms and major investment banks to hire extensively through the PPO (pre-placement offer) route."<br />
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Another one in the lineup is <a href="http://www.businessinsider.in/searchresult.cms?query=IIM+Bangalore">IIM Bangalore</a>. This institute too is expecting the numbers of PPOs to go up this year. Sapna Agarwal, head of career development cell at IIM Bangalore, says, "Last year was an exceptionally good year for us, with more than 30% of our batch getting placed through PPOs. We got 137 PPOs last year and we expect the number to go up this time.”<br />
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<a href="http://www.businessinsider.in/searchresult.cms?query=IIM+Kozhikode">IIM Kozhikode</a> is also expecting a rise of 10% in the numbers, informed AF Mathew, the placements chairperson of this prestigious institute.<br />
 <br /> This year, the Boston Consulting Group has made 47 pre-placement offers from across B-schools, which is 47% more than the last year. "We have had substantial growth over the last many years and in line with our growth we hired 95 students through campus recruitments," said <keyword id="2723481" type="PERSON" weightage="20" keywordseo="Suresh-Subudhi">Suresh Subudhi</keyword>, partner and head of recruiting. At IIMs, the firm offers a base salary of Rs 20 lakh, in addition to a variable bonus.<br />
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The campus hiring requirements has gone up to 20% at Godrej this year. "Today, our businesses have a growing global presence. This kind of expansion has meant that new roles are created across businesses and countries. So far, we have concluded our summer internships for the year and have offered 20% PPOs as part of that," said Sumit Mitra, head-group human resources and corporate services, Godrej Industries Limited and Associate Companies.<br />
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<a href="http://www.businessinsider.in/searchresult.cms?query=Godrej+">Godrej </a>offers pre-placement opportunities to students in the summer, autumn and winter sessions of Gurukul during the internship program. In 2014, 91% of the company’s management trainee came through Gurukul. As part of the two-month program students get to work on live projects across businesses under close mentoring from senior leaders.<br />
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<a href="http://www.businessinsider.in/searchresult.cms?query=IIM+Indore">IIM Indore</a> too, is expecting a high number of PPOs from the eCommerce industry as compared to previous year. Companies who have released PPOs at IIM Indore so far are BCG, <keyword id="44863" type="CITY" weightage="20" keywordseo="HUL">HUL</keyword>, <keyword id="49855" type="COMPANY" weightage="20" keywordseo="philips">Philips</keyword> and Vodafone.<br />
 <br /> Raj Raghavan, director, human resources at <keyword id="6354743" type="COMPANY" weightage="20" keywordseo="Amazon-India">Amazon India</keyword>, said, "Our intern hiring numbers have seen a steady rise over the last few years. Our conversion percentage has been improving significantly and today around 25% of our total MBA hires come through PPOs."<br />
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Faculty of Management Studies, Delhi has received 21 offers this year, compared to 17 last time round, from Accenture, BCG, HUL, L'Oreal, Pepsi, Philips and Vodafone.<br />
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Ashok Ramchandran, director, HR at <a href="http://www.businessinsider.in/searchresult.cms?query=Vodafone+">Vodafone </a>said, "Greater hiring is expected across all domains, primarily in e-commerce and <keyword id="34523" type="CITY" weightage="20" keywordseo="fmcg">FMCG</keyword> marketing. Consulting companies are also expanding their talent pool," said a spokesperson from the institute.”<br />
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Ramchandran further added, “The conversion rate from summer internships to PPOs has increased 22% at telecom operator Vodafone this year. Vodafone made 100 summer internship offers in 2014. Of these, 58% received PPOs from the company across B-schools, law schools and engineering colleges. "We continue to hold similar focus in hiring and rigor in building our talent pipeline through our flagship management trainee program called Discover."<br />

Here’s what eCommerce companies are doing to get ‘tried and tested’ talent on board

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source">AP</p></div><p></p></div></div>NYT columnist Ross Douthat says there's no good way to let people keep their health plans within the context of <keyword id="6579869" type="PERSON" weightage="60" keywordseo="ObamaCare">Obamacare</keyword> (and he's right).</p>
<p>Instead, he <a href="http://douthat.blogs.nytimes.com/2013/11/15/what-obamacare-needs-now/?_r=1&amp;">suggests an approach</a> the President might take to placate people who are losing lower-cost coverage that they liked:</p>
<p style="padding-left: 30px;"><span>Obamacare's regulations could be rewritten to allow insurers to sell less comprehensive plans on the exchanges. This wouldn't require doing away with </span><em>every</em><span> new regulation, or rolling back the pre-existing condition guarantee, which is </span><a href="http://www.newrepublic.com/article/115593/upton-obamacare-bill-gop-fix-shows-its-warped-values">what liberals argue the Upton bill</a><span> currently being considered in the House would do. But it could involve </span><a href="http://www.thenation.com/article/177109/why-obamacares-troubled-rollout-might-force-cooperation-health-reform-needs#">heeding the recent hint</a><span> from the University of Chicago's Harold Pollack, a card-carrying Obamacare advocate, that perhaps in the wake of the last month's developments the government should "revisit just how minimal the most minimal insurance packages should be," which in turn could open the door to allowing many more people to buy the kind of high-deductible catastrophic plans that the law currently allows insurers to only sell to twentysomethings.</span></p>
<p>I don't think this can work, either. Broadly, there are three <a href="http://www.businessinsider.com/here-are-the-five-big-reasons-obamacare-changes-insurance-premiums-2013-11">reasons</a> people who buy individual market insurance may be facing premium increases due to Obamacare. The Douthat/Pollack approaches don't go very far in addressing them:</p>
<ol>
<li><strong>Plans are getting more expensive because they close coverage gaps:</strong> This is the "junk insurance" issue liberals like to talk about. Old plans may have had annual benefit limits, or excluded key items like prescription drugs or maternity coverage.</li>
<li><strong>Plans are getting more expensive because they have lower patient responsibility:</strong> Old plans may not have covered 100% of the cost of preventive care and may have had higher deductibles and out-of-pocket maximums than are allowed under the ACA.</li>
<li><strong>Plans are getting more expensive because they are community rated:</strong> Old plans had "experience rating": People who were young and healthy and male and otherwise expected to consume little health care paid low premiums; people who were sick and expensive to cover paid high premiums. Now, "community rating" means everyone will pay the same price, except that a limited degree of age-based variation will be allowed.</li>
</ol>
<p>Douthat's idea would address point (2) and Pollock's idea (which is different) would go to point (1), but point (3) is the big elephant in the room here that nobody can fix because it's a key policy aim of the ACA.</p>
<p>Douthat wants to allow everybody to buy the catastrophic plans that the ACA currently contemplates just for 21- to 30-year olds. For people over 30, the minimum plan you can buy from an ACA exchange and comply with the individual mandate is a "bronze plan," which is supposed to be designed with an actuarial value of 60%, meaning on average it will pay 60% of a participant's medical bills.</p>
<p><span>The ACA does not set a minimum actuarial value for catastrophic plans, but the formula the ACA uses for risk adjustments assumes it will be 57%. And this is the problem with</span> Douthat's idea: a "bronze plan" is only very slightly more generous than a "catastrophic plan." <span>That's because bronze plans are already high-deductible plans. Anthem Blue Cross offers a Bronze PPO in California with a deductible of $5,000 for a single adult. In New York, Aetna's Bronze EPO has a $3,000 deductible.</span></p>
<p><span></span><span>We should expect that catastrophic plans will be about 5% cheaper than bronze plans. Opening these plans up to the broader market would help a little with sticker shock, but not very much. </span>The insurance consultancy Milliman <a href="http://publications.milliman.com/publications/healthreform/pdfs/ten-critical-considerations.pdf">warns</a> that ACA rules "may make it hard to differentiate" between catastrophic and bronze plans, since the catastrophic plans and bronze plans must both limit out-of-pocket expenses to $6,350 for an individual subscriber.</p>
<p>Pollock's suggestion is to <a href="http://www.thenation.com/article/177109/why-obamacares-troubled-rollout-might-force-cooperation-health-reform-needs#">tweak the definition</a> of "essential health benefits" under the Affordable Care Act. In other words, he'd hold down premiums by letting insurers exclude more items from coverage. But it's not clear what these exclusions could be, and Pollack doesn't make specific suggestions. The additions that add lots of cost (mental health coverage, prescription drugs, substance abuse treatment) tend to be pretty important components of health care.</p>
<p>We can tinker a little with the comprehensiveness of coverage, both in terms of what services of covered and what fraction of the bills the insurer will pay. <span style="line-height: 1.5em;">But there is no "fix" to the fact that the ACA creates a <a href="http://www.businessinsider.com/obama-made-a-choice-thats-hurting-obamacare-now-2013-11">shadow fiscal transfer</a> by charging higher health insurance premiums to healthy people in order to subsidize coverage for the sick.</span></p>
<p><span style="line-height: 1.5em;">This was a key design feature of the law. It is not a bug. And it will lead to premium increases for a few million people. The president can say he's sorry all he wants, but rate shock is one of the key financing mechanisms for the ACA. Without coming up with a new way to finance the law, it can't be fixed.</span></p>

Why 'If You Like Your Plan' Can't Be Fixed

<p></p>
<p><em>Beyond the <a href="http://www.businessinsider.com/charts-on-us-inequality-2013-11">charts</a> and warnings from <a href="http://www.businessinsider.com/income-inequality-is-hurting-america-2013-9">economists</a> and <a href="http://www.businessinsider.com/fund-managers-worried-about-inequality-2013-11">investors</a>, perhaps the most disturbing commentary on income inequality in America was written by an investment manager in 2011.</em></p>
<p><em>"In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability," the manager wrote in an email to Professor G. William Domhoff of the University of California at Santa Cruz.</em></p>
<p><em>The manager, who asked to remain anonymous to protect his relationship with wealthy clients, expresses his frustration with a financial system that is rigged to help the elites at the cost of everyone else.</em></p>
<p><em>Domhoff posted <a href="http://www2.ucsc.edu/whorulesamerica/power/investment_manager.html">the letter</a> to his site, alongside his own commentary from more than 60 years of research on <a href="http://www2.ucsc.edu/whorulesamerica/power/wealth.html">income inequality</a> and <a href="http://www2.ucsc.edu/whorulesamerica/power/class_domination.html">the power elite</a>. </em><em>With his permission, we're publishing the full letter here:</em></p>
<h2 class="title">An Investment Manager's View on the Top 1%</h2>
<p>I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and - if working - make over $300,000 per year. My observations on the sources of their wealth and concerns come from my professional and social activities within this group.</p>
<p>Work by various economists and tax experts make it indisputable that the top 1% controls a widely disproportionate share of the income and wealth in the United States. When does one enter that top 1%? (I'll use "k" for 1,000 and "M" for 1,000,000 as we usually do when communicating with clients or discussing money; thousands and millions take too much time to say.) Available data isn't exact, but a family enters the top 1% or so today with somewhere around $300k to $400k in pre-tax annual income and over $1.2M in net worth. Compared to the average American family with a pre-tax income in the mid-$50k range and net worth around $120k, this probably seems like a lot of money. But, there are big differences within that top 1%, with the wealth distribution highly skewed towards the top 0.1%.</p>
<h3>The Lower Half of the Top 1%</h3>
<p>The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. Everyone's tax situation is, of course, a little different. On earned income in this group, we can figure somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes, leaving them with around $250k to $300k post tax. This group makes extensive use of 401-k's, SEP-IRA's, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month.</p>
<p>Until recently, most studies just broke out the top 1% as a group. Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M. Wealth distribution is highly skewed towards the top 0.01%, increasing the overall average for this group. The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn't really buy freedom from financial worry or access to the true corridors of power and money. That doesn't become frequent until we reach the top 0.1%.</p>
<p>I've had many discussions in the last few years with clients with "only" $5M or under in assets, those in the 99th to 99.9th percentiles, as to whether they have enough money to retire or stay retired. That may sound strange to the 99% not in this group, but generally accepted "safe" retirement distribution rates for a 30 year period are in the 3-5% range, with 4% as the current industry standard. Assuming that the lower end of the top 1% has, say, $1.2M in investment assets, their retirement income will be about $50k per year plus maybe $30k-$40k from Social Security, so let's say $90k per year pre-tax and $75-$80k post-tax if they wish to plan for 30 years of withdrawals. For those with $1.8M in retirement assets, that rises to around $120-150k pretax per year and around $100k after tax. If someone retires with $5M today, roughly the beginning rung for entry into the top 0.1%, they can reasonably expect an income of $240k pretax and around $190k post tax, including Social Security.</p>
<p>While income and lifestyle are all relative, an after-tax income between $6.6k and $8.3k per month today will hardly buy the fantasy lifestyles that Americans see on TV and would consider "rich". In many areas in California or the East Coast, this positions one squarely in the hard working upper-middle class, and strict budgeting will be essential. An income of $190k post tax or $15.8k per month will certainly buy a nice lifestyle but is far from rich. And, for those folks who made enough to accumulate this much wealth during their working years, the reduction in income and lifestyle during retirement can be stressful. Plus, watching retirement accounts deplete over time isn't fun, not to mention the ever-fluctuating value of these accounts and the desire of many to leave a substantial inheritance. Our poor lower half of the top 1% lives well but has some financial worries.</p>
<p>Since the majority of those in this group actually earned their money from professions and smaller businesses, they generally don't participate in the benefits big money enjoys. Those in the 99th to 99.5th percentile lack access to power. For example, most physicians today are having their incomes reduced by HMO's, PPO's and cost controls from Medicare and insurance companies; the legal profession is suffering from excess capacity, declining demand and global outsourcing; successful small businesses struggle with increasing regulation and taxation. I speak daily with these relative winners in the economic hierarchy and many express frustration.</p>
<p>Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%. In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.</p>
<h3>The Upper Half of the Top 1%</h3>
<p>Membership in this elite group is likely to come from being involved in some aspect of the financial services or banking industry, real estate development involved with those industries, or government contracting. Some hard working and clever physicians and attorneys can acquire as much as $15M-$20M before retirement but they are rare. Those in the top 0.5% have incomes over $500k if working and a net worth over $1.8M if retired. The higher we go up into the top 0.5% the more likely it is that their wealth is in some way tied to the investment industry and borrowed money than from personally selling goods or services or labor as do most in the bottom 99.5%. They are much more likely to have built their net worth from stock options and capital gains in stocks and real estate and private business sales, not from income which is taxed at a much higher rate. These opportunities are largely unavailable to the bottom 99.5%.</p>
<p>Recently, I spoke with a younger client who retired from a major investment bank in her early thirties, net worth around $8M. We can estimate that she had to earn somewhere around twice that, or $14M-$16M, in order to keep $8M after taxes and live well along the way, an impressive accomplishment by such an early age. Since I knew she held a critical view of investment banking, I asked if her colleagues talked about or understood how much damage was created in the broader economy from their activities. Her answer was that no one talks about it in public but almost all understood and were unbelievably cynical, hoping to exit the system when they became rich enough.</p>
<p>Folks in the top 0.1% come from many backgrounds but it's infrequent to meet one whose wealth wasn't acquired through direct or indirect participation in the financial and banking industries. One of our clients, net worth in the $60M range, built a small company and was acquired with stock from a multi-national. Stock is often called a "paper" asset. Another client, CEO of a medium-cap tech company, retired with a net worth in the $70M range. The bulk of any CEO's wealth comes from stock, not income, and incomes are also very high. Last year, the average S&amp;P 500 CEO made $9M in all forms of compensation. One client runs a division of a major international investment bank, net worth in the $30M range and most of the profits from his division flow directly or indirectly from the public sector, the taxpayer. Another client with a net worth in the $10M range is the ex-wife of a managing director of a major investment bank, while another was able to amass $12M after taxes by her early thirties from stock options as a high level programmer in a successful IT company. The picture is clear; entry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. I find it questionable as to whether the majority in this group actually adds value or simply diverts value from the US economy and business into its pockets and the pockets of the uber-wealthy who hire them. They are, of course, doing nothing illegal.</p>
<p>I think it's important to emphasize one of the dangers of wealth concentration: irresponsibility about the wider economic consequences of their actions by those at the top. Wall Street created the investment products that produced gross economic imbalances and the 2008 credit crisis. It wasn't the hard-working 99.5%. Average people could only destroy themselves financially, not the economic system. There's plenty of blame to go around, but the collapse was primarily due to the failure of complex mortgage derivatives, CDS credit swaps, cheap Fed money, lax regulation, compromised ratings agencies, government involvement in the mortgage market, the end of the Glass-Steagall Act in 1999, and insufficient bank capital. Only Wall Street could put the economy at risk and it had an excellent reason to do so: profit. It made huge profits in the build-up to the credit crisis and huge profits when it sold itself as "too big to fail" and received massive government and Federal Reserve bailouts. Most of the serious economic damage the U.S. is struggling with today was done by the top 0.1% and they benefited greatly from it.</p>
<p>Not surprisingly, Wall Street and the top of corporate America are doing extremely well as of June 2011. For example, in Q1 of 2011, America's top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries. Somewhere around 40% of the profits in the S&amp;P 500 come from overseas and stay overseas, with about half of these 500 top corporations having their headquarters in tax havens. If the corporations don't repatriate their profits, they pay no U.S. taxes. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%, most Americans struggled. In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced. Major U.S. corporations are currently lobbying to have another "tax-repatriation" window like that in 2004 where they can bring back corporate profits at a 5.25% tax rate versus the usual 35% US corporate tax rate. Ordinary working citizens with the lowest incomes are taxed at 10%.</p>
<p>I could go on and on, but the bottom line is this: A highly complex set of laws and exemptions from laws and taxes has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.</p>
<h3>Addendum from the investment manager (not Domhoff), added January 2012</h3>
<p>A few blogs and emails have disagreed with the views presented in this article. I'll address two of them here:</p>
<ol>
<li>
<p>A New York Times article (Economix, 1/17/12) agrees that the threshold for being in the top 1 per cent in household <em>income</em> is about $380k but states that, based on Fed data, the 1% threshold for <em>net worth</em> is $8.4M. The figure I use is around $1.5M and comes from the IRS. The Fed uses a simple formula based on assets and liabilities at a broad level of analysis with little detail. Using Fed data, about 8% of US households have a net worth exceeding $1M and the median net worth of the top 10% of US families is $1.569M. The IRS uses the estate multiplier technique to calculate the data, a more complex measure based on tax returns, capitalization of earnings power, and other factors. The estate multiplier technique has been around for decades, is more widely used, and in the opinion of many, is the more accurate number. Where the true threshold is located is impossible to determine with accuracy, but my observations in managing money support the lower number or something close to it.</p>
</li>
<li>
<p>One reader opined that my analysis regarding the bottom half and top half of the top 1% is incorrect and that many business people can amass $20M. Based on my experience with at least a thousand high net worth folks over the last couple of decades, I disagree. The folks in the top 0.5% and particularly the top 0.1% are in my experience very likely to have been the recipients of largesse in the investment industry or banking industry, and this includes those at the top of corporations where compensation is tied to options and stock or those who have careers near the top of the banking and investment industry. There are exceptions, of course.</p>
<p>Let's make the assumption that someone who has an income in the top 1% would reasonably be expected to retire in the top 1%. Everybody's tax situation is a little different, depending upon the state they live in and the deductions they can make. Someone making $380k gross will likely pay about a third of that in Federal and State taxes, leaving about $250k after taxes. Generally, someone making $380k will want to live fairly well, certainly not at the level of the average dual working couple with an income around $55k. Let's say they spend $150k/year, hardly a high end budget in most of the US. That leaves about $100k per year to invest. It is unlikely that even with investment success they are going to amass $10M or $20M by the end of their careers. This fits my observations working with many physicians in many different specialties, and it is generally getting harder to make money in medicine than in the past. Older physicians are retiring today with around $3M to $8M, with just a few above that. Younger physicians are making between $200k and $400k annually - with a few specialties above that - and their typical annual investment contributions run between $50k and $100k.</p>
<p>The bottom line here is that I think it is very difficult to create a net worth in excess of $10M from income alone. Yes, sports stars, entertainers, and some business people do -- but they are rare. Those with a higher net worth tend to acquire most of their net worth from capital gains, not income that has been saved and invested. Large capital gains tend to come when private businesses are acquired by private or public companies with stock or when executives are paid directly by options or stock. Wall Street and the banking industry are frequently involved, either directly or indirectly.</p>
</li>
</ol>

Investment Manager Explains Why 99.5% Of Americans Can Never Win

<p></p>
<p><em>Beyond the <a href="http://www.businessinsider.com/charts-on-us-inequality-2013-11">charts</a> and warnings from <a href="http://www.businessinsider.com/income-inequality-is-hurting-america-2013-9">economists</a> and <a href="http://www.businessinsider.com/fund-managers-worried-about-inequality-2013-11">investors</a>, perhaps the most disturbing commentary on <keyword id="583321" type="UNKNOWN" weightage="60" keywordseo="income-inequality">income inequality</keyword> in America was written by an investment manager in 2011.</em></p>
<p><em>"In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability," the manager wrote in an email to Professor G. William Domhoff of the University of California at Santa Cruz.</em></p>
<p><em>The manager, who asked to remain anonymous to protect his relationship with wealthy clients, expresses his frustration with a financial system that is rigged to help the elites at the cost of everyone else.</em></p>
<p><em>Domhoff posted <a href="http://www2.ucsc.edu/whorulesamerica/power/investment_manager.html">the letter</a> to his site, alongside his own commentary from more than 60 years of research on <a href="http://www2.ucsc.edu/whorulesamerica/power/wealth.html">income inequality</a>, <a href="http://www2.ucsc.edu/whorulesamerica/power/class_domination.html">the power elite</a>, <a href="http://www2.ucsc.edu/whorulesamerica/power/pension_fund_capitalism.html">the myth of pension fund capitalism</a>, and more. </em><em style="font-size: 15px; line-height: 1.5em;">With his permission, we're publishing the full letter here:</em></p>
<h2 class="title">An Investment Manager's View on the Top 1%</h2>
<p>I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and - if working - make over $300,000 per year. My observations on the sources of their <keyword id="6383453" type="ORGANIZATION" weightage="60" keywordseo="Wealth">wealth</keyword> and concerns come from my professional and social activities within this group.</p>
<p>Work by various economists and tax experts make it indisputable that the top 1% controls a widely disproportionate share of the income and wealth in the United States. When does one enter that top 1%? (I'll use "k" for 1,000 and "M" for 1,000,000 as we usually do when communicating with clients or discussing money; thousands and millions take too much time to say.) Available data isn't exact, but a family enters the top 1% or so today with somewhere around $300k to $400k in pre-tax annual income and over $1.2M in net worth. Compared to the average American family with a pre-tax income in the mid-$50k range and net worth around $120k, this probably seems like a lot of money. But, there are big differences within that top 1%, with the wealth distribution highly skewed towards the top 0.1%.</p>
<h3>The Lower Half of the Top 1%</h3>
<p>The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. Everyone's tax situation is, of course, a little different. On earned income in this group, we can figure somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes, leaving them with around $250k to $300k post tax. This group makes extensive use of 401-k's, SEP-IRA's, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month.</p>
<p>Until recently, most studies just broke out the top 1% as a group. Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M. Wealth distribution is highly skewed towards the top 0.01%, increasing the overall average for this group. The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn't really buy freedom from financial worry or access to the true corridors of power and money. That doesn't become frequent until we reach the top 0.1%.</p>
<p>I've had many discussions in the last few years with clients with "only" $5M or under in assets, those in the 99th to 99.9th percentiles, as to whether they have enough money to retire or stay retired. That may sound strange to the 99% not in this group, but generally accepted "safe" retirement distribution rates for a 30 year period are in the 3-5% range, with 4% as the current industry standard. Assuming that the lower end of the top 1% has, say, $1.2M in investment assets, their retirement income will be about $50k per year plus maybe $30k-$40k from Social Security, so let's say $90k per year pre-tax and $75-$80k post-tax if they wish to plan for 30 years of withdrawals. For those with $1.8M in retirement assets, that rises to around $120-150k pretax per year and around $100k after tax. If someone retires with $5M today, roughly the beginning rung for entry into the top 0.1%, they can reasonably expect an income of $240k pretax and around $190k post tax, including Social Security.</p>
<p>While income and lifestyle are all relative, an after-tax income between $6.6k and $8.3k per month today will hardly buy the fantasy lifestyles that Americans see on TV and would consider "rich". In many areas in California or the East Coast, this positions one squarely in the hard working upper-middle class, and strict budgeting will be essential. An income of $190k post tax or $15.8k per month will certainly buy a nice lifestyle but is far from rich. And, for those folks who made enough to accumulate this much wealth during their working years, the reduction in income and lifestyle during retirement can be stressful. Plus, watching retirement accounts deplete over time isn't fun, not to mention the ever-fluctuating value of these accounts and the desire of many to leave a substantial inheritance. Our poor lower half of the top 1% lives well but has some financial worries.</p>
<p>Since the majority of those in this group actually earned their money from professions and smaller businesses, they generally don't participate in the benefits big money enjoys. Those in the 99th to 99.5th percentile lack access to power. For example, most physicians today are having their incomes reduced by HMO's, PPO's and cost controls from Medicare and insurance companies; the legal profession is suffering from excess capacity, declining demand and global outsourcing; successful small businesses struggle with increasing regulation and taxation. I speak daily with these relative winners in the economic hierarchy and many express frustration.</p>
<p>Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%. In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.</p>
<h3>The Upper Half of the Top 1%</h3>
<p>Membership in this elite group is likely to come from being involved in some aspect of the financial services or banking industry, real estate development involved with those industries, or government contracting. Some hard working and clever physicians and attorneys can acquire as much as $15M-$20M before retirement but they are rare. Those in the top 0.5% have incomes over $500k if working and a net worth over $1.8M if retired. The higher we go up into the top 0.5% the more likely it is that their wealth is in some way tied to the investment industry and borrowed money than from personally selling goods or services or labor as do most in the bottom 99.5%. They are much more likely to have built their net worth from stock options and capital gains in stocks and real estate and private business sales, not from income which is taxed at a much higher rate. These opportunities are largely unavailable to the bottom 99.5%.</p>
<p>Recently, I spoke with a younger client who retired from a major investment bank in her early thirties, net worth around $8M. We can estimate that she had to earn somewhere around twice that, or $14M-$16M, in order to keep $8M after taxes and live well along the way, an impressive accomplishment by such an early age. Since I knew she held a critical view of investment banking, I asked if her colleagues talked about or understood how much damage was created in the broader economy from their activities. Her answer was that no one talks about it in public but almost all understood and were unbelievably cynical, hoping to exit the system when they became rich enough.</p>
<p>Folks in the top 0.1% come from many backgrounds but it's infrequent to meet one whose wealth wasn't acquired through direct or indirect participation in the financial and banking industries. One of our clients, net worth in the $60M range, built a small company and was acquired with stock from a multi-national. Stock is often called a "paper" asset. Another client, CEO of a medium-cap tech company, retired with a net worth in the $70M range. The bulk of any CEO's wealth comes from stock, not income, and incomes are also very high. Last year, the average S&amp;P 500 CEO made $9M in all forms of compensation. One client runs a division of a major international investment bank, net worth in the $30M range and most of the profits from his division flow directly or indirectly from the public sector, the taxpayer. Another client with a net worth in the $10M range is the ex-wife of a managing director of a major investment bank, while another was able to amass $12M after taxes by her early thirties from stock options as a high level programmer in a successful IT company. The picture is clear; entry into the top 0.5% and, particularly, the top 0.1% is usually the result of some association with the financial industry and its creations. I find it questionable as to whether the majority in this group actually adds value or simply diverts value from the US economy and business into its pockets and the pockets of the uber-wealthy who hire them. They are, of course, doing nothing illegal.</p>
<p>I think it's important to emphasize one of the dangers of wealth concentration: irresponsibility about the wider economic consequences of their actions by those at the top. Wall Street created the investment products that produced gross economic imbalances and the 2008 credit crisis. It wasn't the hard-working 99.5%. Average people could only destroy themselves financially, not the economic system. There's plenty of blame to go around, but the collapse was primarily due to the failure of complex mortgage derivatives, CDS credit swaps, cheap Fed money, lax regulation, compromised ratings agencies, government involvement in the mortgage market, the end of the Glass-Steagall Act in 1999, and insufficient bank capital. Only Wall Street could put the economy at risk and it had an excellent reason to do so: profit. It made huge profits in the build-up to the credit crisis and huge profits when it sold itself as "too big to fail" and received massive government and Federal Reserve bailouts. Most of the serious economic damage the U.S. is struggling with today was done by the top 0.1% and they benefited greatly from it.</p>
<p>Not surprisingly, Wall Street and the top of corporate America are doing extremely well as of June 2011. For example, in Q1 of 2011, America's top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries. Somewhere around 40% of the profits in the S&amp;P 500 come from overseas and stay overseas, with about half of these 500 top corporations having their headquarters in tax havens. If the corporations don't repatriate their profits, they pay no U.S. taxes. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%, most Americans struggled. In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced. Major U.S. corporations are currently lobbying to have another "tax-repatriation" window like that in 2004 where they can bring back corporate profits at a 5.25% tax rate versus the usual 35% US corporate tax rate. Ordinary working citizens with the lowest incomes are taxed at 10%.</p>
<p>I could go on and on, but the bottom line is this: A highly complex set of laws and exemptions from laws and taxes has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.</p>
<h3>Addendum, January 2012</h3>
<p>A few blogs and emails have disagreed with the views presented in this article. I'll address two of them here:</p>
<ol>
<li>
<p>A New York Times article (Economix, 1/17/12) agrees that the threshold for being in the top 1 per cent in household <em>income</em> is about $380k but states that, based on Fed data, the 1% threshold for <em>net worth</em> is $8.4M. The figure I use is around $1.5M and comes from the IRS. The Fed uses a simple formula based on assets and liabilities at a broad level of analysis with little detail. Using Fed data, about 8% of US households have a net worth exceeding $1M and the median net worth of the top 10% of US families is $1.569M. The IRS uses the estate multiplier technique to calculate the data, a more complex measure based on tax returns, capitalization of earnings power, and other factors. The estate multiplier technique has been around for decades, is more widely used, and in the opinion of many, is the more accurate number. Where the true threshold is located is impossible to determine with accuracy, but my observations in managing money support the lower number or something close to it.</p>
</li>
<li>
<p>One reader opined that my analysis regarding the bottom half and top half of the top 1% is incorrect and that many business people can amass $20M. Based on my experience with at least a thousand high net worth folks over the last couple of decades, I disagree. The folks in the top 0.5% and particularly the top 0.1% are in my experience very likely to have been the recipients of largesse in the investment industry or banking industry, and this includes those at the top of corporations where compensation is tied to options and stock or those who have careers near the top of the banking and investment industry. There are exceptions, of course.</p>
<p>Let's make the assumption that someone who has an income in the top 1% would reasonably be expected to retire in the top 1%. Everybody's tax situation is a little different, depending upon the state they live in and the deductions they can make. Someone making $380k gross will likely pay about a third of that in Federal and State taxes, leaving about $250k after taxes. Generally, someone making $380k will want to live fairly well, certainly not at the level of the average dual working couple with an income around $55k. Let's say they spend $150k/year, hardly a high end budget in most of the US. That leaves about $100k per year to invest. It is unlikely that even with investment success they are going to amass $10M or $20M by the end of their careers. This fits my observations working with many physicians in many different specialties, and it is generally getting harder to make money in medicine than in the past. Older physicians are retiring today with around $3M to $8M, with just a few above that. Younger physicians are making between $200k and $400k annually - with a few specialties above that - and their typical annual investment contributions run between $50k and $100k.</p>
<p>The bottom line here is that I think it is very difficult to create a net worth in excess of $10M from income alone. Yes, sports stars, entertainers, and some business people do -- but they are rare. Those with a higher net worth tend to acquire most of their net worth from capital gains, not income that has been saved and invested. Large capital gains tend to come when private businesses are acquired by private or public companies with stock or when executives are paid directly by options or stock. Wall Street and the banking industry are frequently involved, either directly or indirectly.</p>
</li>
</ol>

You Searched For "PPO" and got 14 results

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BI India Bureau

An EPA staffer reportedly leaked false stories about a cabinet official in order to 'take the heat off' Scott Pruitt

Eliza Relman

Jared Kushner rips into Palestinian leader Abbas' ability to make peace

Rosie Perper,Rosie Perper

McKinsey bypasses IIT placement process to hire students through in-house interviews

BI India Bureau

Two of Scott Pruitt's closest aides resigned from the EPA after receiving steep pay raises that were rejected by the White House

Eliza Relman

Disney World just quietly raised ticket prices to up to $129 for a single day - and people are freaking out

Kate Taylor

Scott Pruitt is changing his story about approving big pay raises to close aides

Eliza Relman

This dentist office on wheels gives teeth cleanings and exams in Silicon Valley parking lots

Melia Robinson

Happy hours for IITians: Pre-placement offers Rs 1 crore compensation

BI India Bureau

How to get health insurance to pay for doctors, dentists, and emergencies

Tanza Loudenback

Here’s what eCommerce companies are doing to get ‘tried and tested’ talent on board

BI India Bureau

Why 'If You Like Your Plan' Can't Be Fixed

Josh Barro

Investment Manager Explains Why 99.5% Of Americans Can Never Win

Business Insider

Investment Manager Explains Why 99.5% Of Americans Can Never Win

Gus Lubin