Domestic Partner Benefits Gaining Acceptance

02/27/07

Ford, IBM, and 160 of the Fortune 500 provide them. So do the states of California, New York, and Washington—and even the Episcopal Church.

What do these organizations provide? Benefits for employees’ domestic partners—persons they live with but aren’t married to. It’s a growing phenomenon.

Is providing domestic partnership benefits (DPBs) right for your company? That’s a decision you’ll have to make based on the nature of your workforce, region, customers, and values.

Who’s It For?
First myth to dispel: DPBs are for the gays in your workforce. While some companies and organizations limit benefits to gays only—reasoning that heterosexual couples have the option to marry—many organizations open up the program to nonmarried heterosexual couples. In their view, the policy simply reflects reality—that committed people are living together, getting married later in life, and sometimes not tying the knot at all.

Why Do It?
Reasons for adopting DPBs programs vary, but one stands out: It makes business sense. Some companies, for example, were losing excellent job candidates to companies that offered DPBs until they offered them as well. Others discovered that DPBs keep some employees happier, more productive, and loyal. Some companies with many gay customers found it an effective way to show affinity with them.

Reasons Against
The reasons for not extending benefits to domestic partners center around three issues:1. “It’s Too Expensive.” Most studies show DPBs add as little as 1 percent to the cost of health insurance, and usually no more than 3 percent. That’s mostly because only 0.5 to 2.5 percent of the workforce will take you up on the offer. Why? Many domestic partners already have insurance, and some employees don’t want to “come out of the closet” to sign up for benefits.
2. “People will boycott us.” It happens. The conservative American Family Association has boycotted Disney for its DPBs and other policies and practices it finds offensive. It hasn’t had much effect.
3. “It’s immoral.” For some, it is. And even if senior management decides the benefits of DPBs outweigh the costs, a few employees will likely choose to work elsewhere.

Issues to Consider
For those of you considering DPBs, here are a few things to consider:

What benefits to include. DPBs aren’t just about health insurance. Most organizations offering them provide the same range of benefits any spouse or dependent would be entitled to, like use of a company health facility, extension of family leave policies to the employee, financial assistance for adoption or childcare, etc.

How to verify domestic partnership. How do you know a couple is truly committed and not just taking advantage of the policy? Ask them to sign an affidavit. Californians can use the Declaration of Domestic Partnership. Some things organizations ask employees and partners to declare include:

Each is the other’s sole domestic partner, and they share a residence.

They are at least eighteen and not married to anyone else.

Their commitment to each other is similar to marriage.

They have lived together at least twelve months.

They own a substantial asset together

Taxes. The IRS has ruled that DPBs are taxable, which means your employee must pay income taxes on the dollar value of the partner’s benefits. This can deter some employees from using DPBs.

For detailed information on DBPs, try the Human Rights Campaign at www.hrc.org. To view sample affidavits and other policies, type “domestic partnership benefits” into your favorite search engine.