Into the Mainstream?: Employers Examine Domestic Partnership Benefits

By Savasta, Marc A. | Risk Management, September 1997 | Go to article overview

Into the Mainstream?: Employers Examine Domestic Partnership Benefits


Savasta, Marc A., Risk Management


This examination of an emerging trend in employee benefits is based on a research paper by Marc A. Savasta, an undergraduate at Temple University in Philadelphia.

The paper was one of two that received a 1997 Edith E Lichota Award, presented annually by RIMS to encourage and recognize research efforts that have practical application to risk management and employee benefits.

In December 1996, the directo- of contract administration for the (City of Philadelphia's Office of Housing applied for leave benefits to care for her partner of 17 years. Usually, this would not be reason for attention, but her partner is a woman. Although her claim is pending, it conforms with Philadelphia mayor Ed Rendell's controversial executive order offering city benefits to the partners of gay employees.

Once unheard of, situations like this are becoming more common as increasing numbers of public and private organizations are making domestic partner benefits available to employees to address perceived inequities among their employee populations-that is, benefits offered to their married versus non-married employees. Often, organizations offer domestic partner benefits because they want to be perceived as leaders in all aspects of their business dealings.

This issue presents a challenge for employers interested in implementing benefits packages for employees who are outside the mainstream-either not marriage partners or not legally permitted to wed. The U.S. Census Bureau estimates that 8.4 million people are involved in such relationships.

According to the Society of Human Resource Management, 63 percent of the 145 companies it surveyed had a formal policy against discrimination based on sexual orientation, and 2 percent of these companies extended health benefits to domestic partners. A study conducted by the International Society of Certified Employee Benefit Specialists found more than 200 entities in the United States that offer domestic partner benefits.

Most attention on this issue focuses on samesex couples, yet according to a study by Paul Sullivan, a senior research consultant in Aon Consulting's research and training services unit in Newburyport, Massachusetts, two-thirds of domestic partner benefit recipients are heterosexuals who outnumber gays and lesbians and are less reluctant to reveal their sexual orientation in a work environment.

Constitutional Questions

An important question affecting domestic partner benefits is the legal status of same-sex partnerships. Traditionally, organizations offer benefits to employees and their spouses or legal dependents, but same-sex partnerships do not enjoy the legal sanctions necessary to expedite plan offerings. The most recent response to this problem has been addressed in Hawaii, which became the first state to recognize same-sex marriages in 1996. The Hawaiian State Supreme Court's ruling in Baehr v. State of Hawaii, that the state cannot refuse to recognize same-sex marriage unless it can show a "compelling interest" for doing so, is being challenged, but benefits consultants think the ruling represents a turning point. "I think that there's a reasonable likelihood that [the State Supreme Court] will sanction same-sex marriages in Hawaii," says Dennis Coleman, an attorney and principal with Kwasha Lipton in Fort Lee, New Jersey.

Does a risk manager need to pay attention to an issue if it is not legally enforceable? Perhaps not, but if the measure is approved in Hawaii, the U.S. Constitution, which compels every state to give "full faith and credit" to the public acts of other states, could affect employers' policies nationwide. An employer might be "forced to cover a same-sex spouse from a marriage performed in Hawaii because failure to do so would be a violation of its own state's law forbidding employment discrimination based on sexual orientation," says a team of Aon Consulting researchers.

Defining a Family

An important consideration for risk managers to examine is the changing definition of the term "family. …

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