Domestic Partner Benefits
Employers compensate employees through more than just wages and salary by providing benefits such as health insurance and dental care. The traditional benefits structure includes an employee's opposite-sex spouse and children. An ever-growing number of employers, including the majority of Fortune 500 companies, further extend these benefits to lesbian, gay, bisexual and transgender employees and their families by including an employee's same-sex partner or spouse and the partner/spouse's children.
Same-sex partners are two individuals who are in a long-term committed relationship and are responsible for each other's financial and emotional well-being, but who may or may not be recognized as such by the laws of the state in which they live. Although some states recognize marriage equality for same-sex spouses, this is not the case in every state and among federal laws.
Employers can create their own definitions of "domestic partner" for the purposes of benefits eligibility. Typically, employers require that the partners are emotionally and financially interdependent, do not have a different domestic partner or spouse, have reached the age of consent and are not related. As more states recognize same-sex relationships, employers can begin to defer to these legal structures instead of their own definitions of domestic partners.
Most insurance carriers now offer domestic partner coverage. Even with most carriers now offering inclusive coverage, it is still important to review plans to determine the level of parity between spousal and partner benefits, and to identify any potential barriers to coverage.
- Definitions of domestic partner for benefits eligibility
- Cost of domestic partner benefits
- Writing a domestic partner benefits proposal
- Prevalence among private employers
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History of Partner Benefits
In growing numbers, both public and private employers across the country recognize partner benefits as an inexpensive option to attract and retain the best employees and to promote fairness and equality in the workplace.
- In 1982, the Village Voice, a weekly New York newspaper, became the first employer to offer domestic partner benefits to its employees’ same-sex partners.
- By 1990, nearly two dozen U.S. employers offered “spousal equivalent” benefits to their employees’ same-sex partners.
- By 2006, a majority of the Fortune 500 largest U.S. corporations provide health insurance for domestic partners of employees.
Partner benefits and the law
No laws prohibit a private-sector employer from offering partner health benefits, but federal and state laws do affect certain other benefits and the taxation of health and retirement benefits. Laws such as the federal Defense of Marriage Act of 1996 and constitutional amendments at the state level have been interpreted to prohibit partner benefits for public employees. Various federal and state laws affect the taxation of health insurance benefits, including Flexible Spending Accounts, Health Reimbursement Accounts or Health Savings Accounts, as well as family and medical leave and Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits continuation.
- Federal laws impacting domestic partner benefits
- Equal benefits ordinances
- Taxation of domestic partner benefits ("imputed income")
- State laws
Types of benefits & Spousal equivalency
Employers should evaluate their entire employee benefits packages for consistent treatment of partners as compared to spouses. In particular, employers should examine the following benefits, all of which can be extended to same-sex partners:
- Health benefits (medical, dental, vision, dependent coverage and COBRA benefits continuation)
- Other benefits (FMLA, bereavement leave, relocation/travel assistance, education and tuition assistance, adoption assistance, credit union membership, disability and life insurance, and employee discounts)
- Retirement benefits (retiree healthcare, pension plans and 401k's)
- Inclusion of partners in business events