Covering the Unmarried Family: Insurance benefits for domestic partnerships

According to Darren R. Coffman, president of Benefits Unlimited Inc. such coverage – for unmarried individuals in a committed relationship whether it is same-sex or heterosexual – is rarely requested.

“We do predominantly group health, and I do get that question asked of me during enrollment periods but only occasionally,” Coffman said.

Requests for domestic partnership coverage, however, are on the rise nationwide for both same-sex and heterosexual couples, and Fortune 500 businesses have taken note. According to the Human Rights Campaign Foundation, 51 percent of Fortune 500 corporations offered domestic partnership benefits in 2006. The number of Fortune 500 companies offering the benefits has more than doubled to 254 since 2000.

The majority of domestic partnership policies offered in the Springfield region are through large, global employers such as Kraft, Clear Channel Communications or The Gap, but they’re not prevalent with local firms.

Dean Orem, vice president of human resources with EFCO Corp. said the issue of domestic partner benefits hasn’t yet come up with the company’s 1,600 employees.

“I’ve had no requests, and I’ve had no questions,” Orem said. “It’s kind of a moot point with us, at least until someone has a need or decides to ask.”

That was the situation at Brown Derby Stores Inc., which has 150 employees. The company recently switched dental plans, according to Human Resources Director Kelli R. Fleck. During a meeting with employees to address changes in dental coverage, she said, the issue of domestic partner benefits was raised.

“One of our employees asked the representative about covering domestic partner benefits,” Fleck said. “I was shocked and surprised when the representative said, ‘Yes, we do.’”

Recognizing domestic partnerships

Coffman said issues with proving relationships and establishing their termination make domestic partnerships tricky to insure. There are no standard legal recognitions as in marriage or divorce.

Another difference is that under federal law, domestic partner benefits are paid post tax as well, which creates what Brown Derby’s Fleck calls “a little more paperwork.”

“The benefit for the employee is pretax and the benefit for the partner is post tax,” she added, “so it is a little bit more administration.”

Seven states – California, Connecticut, Hawaii, Maine, Massachusetts, New Jersey and Vermont – and the District of Columbia have laws granting varying degrees of recognition and rights to domestic partnerships according to the Human Rights Campaign Foundation.

This patchwork of rules and rights further complicates the insurance issue.

Coffman said while several insurers offer domestic partnership coverage in other states, that same coverage might not be offered in Missouri.

Columbia avoided that hurdle by being self-insured. The Missouri city rolled out domestic partnership benefits to its employees in January.

According to Margrace Buckler, the city’s director of human resources, Columbia joins the county of Jackson and the cities of St. Louis and Kansas City in offering these benefits as government employers in Missouri.

The city of Columbia has 1,191 employees, and Buckler said nine have enrolled for domestic partner benefits. The enrollees, she added, are split about evenly between same-sex and heterosexual partners.

“We’ve had several people, both heterosexual and same-sex partners, thanking the city for doing this,” Buckler said. “We did have a public hearing on it where we went through it. Nobody got up and spoke against it.”

In addition to providing a level of fairness, Buckler expects the benefit to aid in recruiting.

Benefits

Brown Derby’s Fleck agrees that benefits can make or break a deal when candidates are considering a new job.

“For example, another company may offer you more base income, but when you weigh all the pros and cons of benefits, that can be the deciding factor,” she said.

According to a study of domestic partner benefits by M.V. Lee Badgett from the Williams Institute at the UCLA School of Law, people in domestic partnerships are much more likely to be uninsured than people in married relationships. While 20 percent of people in same-sex partnerships are uninsured, 32 percent of people in heterosexual partnerships are uninsured.

Uneven implementation of domestic partner benefits contributes to the discrepancy.

For example, The Gap Inc. only offers domestic partner benefits to same-sex couples.

Columbia offers the benefits to all employees, regardless of sexual preference.

“That’s just a policy decision, really,” Columbia’s Buckler said. “We had the request to do both and that’s what we did.”

Branson resident Jon-Murray Stacey took advantage of domestic partnership coverage in his same sex-relationship for five years in the mid-1990s. He obtained benefits through Old Navy, a division of The Gap Inc. Though he is no longer working for the company, he said he did not know about the disparity between same-sex and heterosexual domestic partner benefits.

“I’m surprised by that,” Stacey said. “For us, it was just one less thing to worry about. It should be the same for everyone.”

Defining Domestic Partnerships

For insurance purposes, a domestic partnership is generally recognized as a financially interdependent, committed and exclusive relationship between adults. Proof through shared accounts and cohabitation or an affidavit is typically required.

Source: Employee Benefit Research Institute, Washington D.C.[[In-content Ad]]