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Wednesday, April 23, 2008 10:37 am

A matter of equity

Why extending domestic partner benefits to employees makes sense

Untitled Document As soon as this October, Arizona may become the 15th state to provide domestic-partner benefits to state employees. Such benefits have become the logical extension of many employers’ anti-discrimination policies. “Domestic partnership” is a term used in local government, by employers, and by the insurance industry to denote two people whose lives are interconnected in such a way as to make their affairs interdependent. Still, some common misconceptions remain.
The first misconception: Domestic partners don’t have families to support. No matter how one chooses to translate or manipulate the term “marriage,” one thing is certain: The American family has changed drastically throughout history. For example, consider those eligible for domestic partner benefits through the state of Illinois: more than 30,000 same-sex couples. They live throughout the state, have partners who depend upon each other financially, and actively participate in the Illinois economy. Twenty-two percent of same-sex couples in Illinois are raising, on average, two children — the same as married couples. However, same-sex couples with children in Illinois have fewer economic resources to provide for their families than their married counterparts. Although married and unmarried families may operate similarly, unmarried partners and their families are not as financially secure. The second misconception: Domestic partners and their families receive the same benefits as married spouses and their families. Married workers who receive family health-insurance benefits get double benefit: untaxed coverage for their spouses and children. A worker with an unmarried domestic partner is doubly penalized: Employers typically do not provide coverage for domestic partners (only 22 percent of employers cover same-sex partners, and 28 percent cover opposite-sex domestic partners). Even when partners are covered, the partner’s coverage is taxed as income to the employee. Because the Internal Revenue Code is subject to the Defense of Marriage Act, the IRS must translate “spouse” to mean a person of the opposite sex for all federal purposes. In short, when an employer provides an employee the same health-insurance coverage for the domestic partner or his or her dependents, the fair market value of that coverage, including the employee’s pretax contributions, is considered “imputed income.” As of December 2007, employees with partner health benefits were paying, on average, $1,069 a year more in taxes than married employees with the same coverage. Also, more retirees are learning that there are a number of disparities in the health care and pensions they and their loved ones get.
The third misconception: This is strictly a “gay issue.” More than 6 million unmarried couples are now living together. In 2000, 39 percent of opposite-sex unmarried couples had children younger than 18 years living in the home, as did 25 percent of same-sex couples. The American family continues to rapidly transform beyond the traditional model. There are political, economic, and philosophical reasons that many people choose a domestic partnership over matrimony, yet some employers exclude such coverage for heterosexual couples because they have a legal right to marry. In response, coverage for opposite-sex couples is increasing because of legal decisions considering such exclusions discriminatory. Many seniors who are widowed, as well as people of all ages with serious disabilities, do not marry for fear that marriage will cause them to lose pension survivor benefits or government subsidies. Other seniors are fearful that a new marriage will upset estate plans for their adult children. Critics arguing against fair compensation insist that rule changes undermine the institution of marriage, burden the state with added costs, mock the Legislature’s policymaking role, and tear down the sociopolitical structure of our country. Those privy to the practicalities of 21st-century public policies offer the following rationale for offering domestic-partner benefits: (1) Social and economic justice (equal pay for equal work): Health and retirement benefits should be a major part of every employee’s compensation package. (2) Employee recruitment and retention: Offering competitive and inclusive benefits helps attract the most qualified candidates. (3) Costs are negligible. For both private and public entities, the cost of providing benefits has been a primary concern, but costs are far less than anticipated. The actual number of people using these benefits has been modest, and the fiscal risks associated with these individuals are no greater than those of spouses. The bottom line is that employees deserve compensation based on merit and productivity, not on federally mandated features irrelevant to job performance. Given that the title “domestic partner” is the only option certain unmarried individuals are granted at this time and because this country is still lagging behind others in how we protect our families, we have an obligation to extend the same benefits to these families that are by default extended to married couples’ families.

Ashley Krstulovich, research and publications coordinator for the State University Annuitants Association, will discuss domestic-partner benefits at 6 p.m. today (Thursday, April 24) at Brookens Auditorium, on the University of Illinois at Springfield campus.
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