Publications

Achieving Domestic Partner Benefits (1999)

On average, employment based benefits, such as health, dental, vision, life insurance, and pension coverage, comprise approximately forty percent of an employee’s total compensation package. For many years, most employers providing health and dental benefits, in particular, have offered optional coverage for employees’ spouses and children. Only in recent years have employers begun to offer benefits to the domestic partners of employees. In 1982, the New York City weekly paper, The Village Voice, became one of the first employers to offer domestic partner health benefits to its Gay and Lesbian employees. Today, hundreds of private sector employers, offer domestic partner benefits to same-sex, and sometimes opposite-sex, partners Approximately 64 states and municipalities have passed domestic partnership laws and about 69 colleges offer domestic partner benefits. While coverage may be limited to a leave policy to care for a sick partner or attend a funeral, many employers extend health coverage to an employees’ partners, and sometimes to their partners’ children.

Why should an employer offer domestic partner benefits?

The typical American family has changed. In 1960, married couples with children comprised almost three-quarters of all U.S. households in 1960. Today, about 50% of all households are married couples with children. Many of these new "families" are comprised of same-sex and opposite-sex couples. This shift in family make-up, as well as the increasing emphasis on family and equality issues, is causing employers to include domestic partner benefits to employees as part of a benefit package. Employers may be particularly sensitive to this issue during these times of low unemployment. Offering domestic partner benefits to unmarried partners is one way to attract and retain quality employees.

Winning domestic partner benefits

The first step toward winning domestic partner benefits may be bargaining for anti-discrimination language in the union’s collective bargaining agreement. Negotiating contract language to prohibit discrimination on the basis of sexual orientation may open the door to winning "no cost" benefits, such as the right to use sick leave to care for a partner. This then sets the ground work for subsequent negotiations to include benefits that have dollar costs attached.

Following are some issues in fighting for domestic partner health benefits:

  • Definition of Benefits

    The first step is to provide the employer with a definition of benefits that the union is seeking and how those benefits compare with the benefits already available to married spouses. Typically the union would propose that Gay and Lesbian employees’ partners are offered the same benefits with the same cost sharing provisions as are spouses and other legal dependents of employees. For example, if the employer contributes the full premium payment for spousal health coverage, full payment should be made on behalf of an employee’s domestic partner (although the value of coverage will be taxable to employees). Likewise, if the employer’s plan covers the children of employee’s spouses, it should cover the children of domestic partners, at the same cost. Health plan enrollment for domestic partners should coincide with the enrollment periods for traditional spouses. While domestic partners do not have a legal right to Consolidated Budget and Reconciliation Act (COBRA) coverage, there is no prohibition for the employer offering such coverage. COBRA requires employers to offer continued health coverage to qualified beneficiaries following certain qualifying events.

  • Eligibility for Benefits

    Another issue involves the proposed eligibility criteria for domestic partnership. While there is no standard definition of a domestic partnership, most employers require the employee and the partner be each other’s sole domestic partner, be at least 18 years of age, be not legally married to another person, and not be related to each other in a way that would prohibit marriage. Some employers require that domestic partners be financially responsible for each other’s welfare or at least financially interdependent. In lieu of signing for full financial responsibility of another, financial interdependence can be proven by submitting copies of joint financial obligations such as a lease, mortgage, or credit card bill.

    Though data for this area is still limited, the Society for Human Resource Management found that employers that offer domestic partner benefits tend to offer them to both same and opposite-sex couples. This applies to the public sector, as well. Most jurisdictions with domestic partner benefits provide those benefits to all partners meeting the eligibility requirements, be they heterosexual or same sex. Limiting benefits to only one group could lead to equal protection claims, particularly in the public sector. Today more than 3,400 employers offer domestic partnership benefits.

  • Residency Requirements

    Some employers may require partners seeking benefits to reside together in order to curb potential abuse. However, employers and insurers have learned that these concerns are unfounded. Workers must pay taxes on the value of the benefits that their partner receives, which creates an obvious disincentive for abusing the benefits. Also, when the domestic partner benefit is only offered to same sex couples, employees must self-identify themselves as Gay or Lesbian. Some employees are reluctant to make this identification.

    In spite of these arguments, some insurers and employers insist on joint residency of domestic partners. If the employer or insurer will not adjust their position on this issue, the union should fight for a policy that waives the requirement if one of the partners is temporarily living separately, but intends to return on a permanent basis. This may occur because of work assignments or other obligations.

  • Proof of Partnership

    Historically, married employees and Gay and Lesbian employees with domestic partners are not treated equally when it comes to proof of eligibility for benefits. Employers typically extend health coverage to spouses on the basis of a verbal declaration of eligibility. However, most employers and/or insurers require more proof of a domestic partnership. Typically, the employee must submit a signed declaration or affidavit of eligibility. Some employers even require the document to be notarized. Employers may accept other proof, such as joint bank account statements, mortgages, or other similar bills, or may require that such items be submitted along with the signed affidavit. Some states and cities have domestic partner registries. Where these are available, partners are usually required to register.

  • Termination of Coverage

    Most employers require an employee to notify the health plan administrator within a specified time period (usually 31 days) if the domestic partnership ends, the partner dies, or the partner no longer meets the eligibility criteria. Once coverage is terminated, typically there is some specified time period that must pass before a new domestic partner of an employee is eligible for benefits.

  • Cost of Coverage

    Some employers believe the inclusion of domestic partners in the group health plan will substantially increase plan costs. Experience does not support this assumption. In fact, employers offering domestic partner health coverage have found that the cost is equal to, and in some cases lower than, the cost of covering the population at large. One factor in keeping costs down is low domestic partner enrollment. Typically, less than three percent of eligible employees sign up for domestic partner benefits. This figure drops to less than one percent if the benefit is offered only to same-sex partners. Some very expensive health problems, such as premature births, are more common in the population at large than among couples in domestic partnerships.

  • Tax Consequences of Providing Domestic Partner Health Insurance

    There are no tax consequences for the employer. However, the Internal Revenue Service requires that the employee pay income taxes on the "fair market value" of the portion of the premium for the domestic partner’s coverage that is paid by the employer. The IRS has not defined fair market value, but it could be interpreted to mean the difference between the cost of single coverage and that for domestic partner coverage, less any amount paid by the employee.

Success Stories

  • New York City

     In the early 1990's, AFSCME Council 37, New York City, won domestic partner benefits, such as bereavement leave and health insurance coverage, through bargaining and executive orders. In 1998, Council 37 effectively lobbied for the passage of legislation that made registered domestic partners, both heterosexual and same-sex, equal to married spouses under all New York City government rules and policies.

  • Philadelphia

    AFSCME Council 47, Philadelphia, began offering domestic partner health benefits to its members several years ago through the union's health and welfare trust fund. The Council's experience led to city legislation, passed in May 1998, that extended health and pension benefits to the partners of Gay and Lesbian city workers. The legislation included provisions allowing city employees to assign pension benefits to anyone, including Gay and Lesbian partners.

  • Seattle

    The City of Seattle, where AFSCME Council 2 represents library workers, custodians, truck drivers, and other service workers, passed a 1999 ordinance requiring private contractors with city contracts exceeding $33,000 to provide domestic partnership benefits at the same level provided to employees with legally married spouses. The ordinance affects contracts awarded after September 30, 2000. Seattle city employees won domestic partner benefits in 1990.

  • Washington State

    With AFSCME Council 28's aggressive efforts to end discrimination against Gay and Lesbian employees, the Washington State Public Employees Benefits Board voted to extend health care benefits to same-sex domestic partners of state workers, effective January 1, 2001.

  • Connecticut

    Connecticut and the State Employees Bargaining Agent Coalition, including AFSCME Council 4, which negotiates pension and health benefits for 43,000 public sector workers, went to arbitration over domestic partnership benefits. The arbitrator's February, 2000 ruling, requires the state to offer health benefits to state employees in committed same-sex relationships.

For more information on domestic partner benefits, contact the Department of Research and Collective Bargaining Services at (202) 429-1238 or e-mail research@afscme.org.

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