Gay Partners Gain Health-Care Coverage

While gay marriage is a current hot-button issue for politicians, business leaders have been wrestling for years over whether to offer health coverage to their employees' domestic partners.

As employers look into the benefits and costs of covering domestic partners, more and more of them are saying yes — not due to a court order or political pressure but because they think it makes good business sense.

Since last year, 34 of the 500 biggest U.S. public companies have started the coverage, bringing the total up to 210, according to the Human Rights Campaign, a Washington, D.C.-based gay and lesbian lobbying group. In addition, the group counts 6,811 privately owned companies that now offer domestic partner benefits either to same-sex couples or to both same-sex and opposite-sex (unmarried, heterosexual) couples.

"Companies are doing it because it helps attract and retain good employees," says Kim Mills, the Campaign's education director. "Twenty years ago this was a new radical idea. Companies said, 'We can't afford to do it.'" Now, she says, companies can't afford not to.

"Employers have to pay attention to trends and movements in society," says Stephen Ziobrowski, a tax and employee benefits lawyer at Day, Berry & Howard in Boston (the firm added domestic partner benefits in 1995.) "If every employer in your field is offering these benefits, you don't want to be the last one to offer it. If you are perceived as having gone against the grain on an issue that 20 years from now will seem open-and-shut to a new generation, it doesn't look so good in hindsight."

Should Your Firm Sign Up?

Take a look at who has already. New York's alternative newspaper, the Village Voice, was the first employer in the United States to offer domestic partner benefits in 1982. The trend accelerated throughout the 1990s, with big, hip, consumer companies such as Apple Computer, Nike and Gap among the early adopters.

Some of the big names adding coverage in 2003 are much more culturally mainstream: Anheuser-Busch, Best Buy, Lexmark International and Sears, Roebuck. In 2004, General Electric, Eli Lilly, Staples, and United Parcel Service added coverage.

In the "Work Life" section of the Human Rights Campaign's Web site, under domestic partner benefits, the group lists major companies and public sector employers who are on board. It also rates companies based on other issues of importance to gays and lesbians, such as whether the company covers sexual orientation in its anti-discrimination policy and whether the company has a support group for gays and lesbians.

Costs Low for Biz, High for Couple

The benefits come at a small cost.

Covering same-sex couples raises overall health insurance costs by less than 1 percent, while covering both same-sex and opposite-sex couples increases costs by up to 3 percent, says Mills. Enrollment rates are low, 1 percent to 2 percent of total employees — closer to 2 percent if the company's definition of domestic partner includes opposite-sex couples, not just same-sex couples.

The tax law helps keep enrollment low. If you add a domestic partner to your policy, you must pay income taxes on the portion of the premium for your partner that your employer pays. (By contrast, you aren't taxed on benefits for a legal spouse or children.) So if your partner has insurance through his or her company, it's probably best to keep the two separate policies. But if your partner doesn't have his or her own insurance, and is looking to buy insurance on the open market, you're better off adding him or her to your plan.

One thing that may add to the costs is keeping track of and complying with the ever-changing state of the law. Federal law is clear that same-sex marriages do not fly.

However, same-sex domestic partners can enter into civil unions in Vermont. As of May 17, they will be able to marry in Massachusetts as a result of a ruling by that state's Supreme Court. A wide-ranging domestic partnership law goes into effect in California on Jan. 1, 2005, and New Jersey passed a law in January granting medical benefits, insurance and other legal rights to same-sex couples.

It's not clear yet whether these state laws require employers to provide benefits, says Ziobrowski. And once companies extend health benefits to domestic partners, must they also offer such other benefits as tuition assistance, relocation expenses, adoption expenses and health club memberships on an equal basis?

Some companies extend domestic partner benefits to one area, like bereavement leave, as a test, says Ilse de Veer, a benefits consultant with Mercer Human Resource Consulting. And lately, some companies have been amending their traditional pension plans to offer pre-retirement survivor benefits to domestic partners, she says.

Meanwhile, some states are digging in their heels with conservative policies. Ohio passed a law this year to preclude giving domestic partner benefits to state employees. The Virginia Bureau of Insurance does not allow Virginia-based companies to offer domestic partner health insurance benefits to same-sex couples (although companies that are self-insured can do so).

Despite the conflicting laws, Mills says her group is working with lots of companies who want to add benefits. Others, which take the "wait-and-see" approach, do so at their own risk.

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