TO: Staff Advisory
Council
FROM the Fringe
Benefits Committee
Subcommittee: Kathryn Howard
(kjh2@po.cwru.edu),
David O'Malley (djo2@po.cwru.edu),
and Dan Dowhower (dpd3@po.cwru.edu)
DATE: January 28,
1999
SUBJECT: Report on
Domestic Partner Benefits at
CWRU
This document contains the following information to help you learn more about Domestic Partnership Benefits:
We ask that you review the University's non-discrimination statement and affirmative action statement prior to reviewing this document. As you can guess, the discussions around Domestic Partnership Benefits have been colorful, heated, and very positive and productive. Given our experiences as a committee, we fully expect that once you have reviewed this information you, too, will have many of the same questions, concerns, need for clarification, and emotions that we have experienced in the last six months. We invite you to contact any one of us, one-on-one or in a group discussion format, to discuss this very important topic.overview, a list of frequently asked questions, a detailed list of the activities of the SAC Fringe Benefit Committee surrounding this issue, evidence that Kaiser and QualChoice, two insurance carriers at CWRU, provide domestic partnerships, and a list of both the "sister or comparison" universities and a larger list of colleges and universities that provide domestic partner benefits. (Please note that many of these colleges and universities provide health benefits but differ with regard to extending tuition benefits to domestic partners).
Our hope is that by the April 1 SAC Council meeting we will be able to discuss and vote on a resolution that will, along with a faculty resolution and recommendation, be forwarded to President Pytte who will, in turn, present this information to the Board of Trustees. Thank you for your energy, time and consideration.
Overview of Domestic Partner Benefits
Fringe benefits such as health and life insurance, a pension, profit-sharing or a percentage of profits have long been a way for employers to compensate their workers, and for one company to gain a competitive advantage over another. Benefits constitute about 40 percent of a worker's total compensation and are no longer considered extras, according to the Society for Human Resource Management.However, such benefits are a privilege, not a right, of employment. Further, none of the 10 state laws prohibiting workplace discrimination based on sexual orientation mandate workplace benefits for "non-traditional" families. Neither do any state executive orders or local ordinances. And the Employment Non-Discrimination Act would not require such benefits either.
While most employers that offer benefits such as health insurance and dental care also make those benefits available to their employees' legal dependents, the idea of extending such benefits to the domestic partners of lesbian and gay employees is relatively new. In 1982, the Village Voice, a New York City weekly, became the first employer to offer domestic partner benefits to its lesbian and gay employees. By 1990, there were fewer than a half dozen U.S. employers that offered "spousal equivalent" benefits to their gay employees' families. In 1992, Lotus Development Corp. became the first publicly traded company to offer such benefits.
Today, there are hundreds
of companies offering
domestic partner benefits to
the same sex (and in some
cases, opposite sex)
partners of their employees.
According to one survey, as
many as one in ten
organizations offers
domestic partner benefits, a
trend that is expected to
grow as companies compete
for talented employees and
public support for workplace
equality grows. A recent
report by KPMG Peat Marwick
found that 13 percent of all
firms offer health benefits
to domestic partners of the
same sex.
Frequently Asked Questions About Domestic Partner Benefits:
Why should a company offer domestic partner benefits?Domestic partner benefits make good business sense. In the current competitive marketplace, where unemployment is running at less than 5 percent, companies need to attract and retain the best employees. Offering equal benefits to lesbian and gay employees is one way to get a competitive edge.
Aren't these benefits
expensive? What will they
mean to this company's
bottom line?
Most employers report no
significant increase in
costs. A survey by the
Society of Human Resource
Management released in
January 1997 found that 85
percent of respondents with
domestic partner benefits
experienced no increase in
their health care costs as a
result of having added them.
What about fears of
increased costs due to
HIV/AIDS claims?
Employers have not reported
any spiking of insurance
costs due to HIV/AIDS. In
1994, the U.S. government
estimated the lifetime cost
of caring with someone with
AIDS was $119,000. The cost
of a kidney transplant can
run as high as $200,000,
while the cost of caring for
a premature infant can run
between $50,000 and $1
million. Maternity benefits
and cancers continue to be
among the most expensive
insurable, treatable items.
How many workers will
sign up for these benefits
if they're offered?
Average enrollment in a
domestic partner benefits
plan will not exceed 1
percent of the eligible
population in any
organization that employs
between 100 and 100,000
employees. Likewise, average
total cost increase will
also not exceed 1 percent.
If made available to gay
employees only, these
percentages range from 0.4
percent to 0.7 percent.
Why isn't enrollment
higher?
Many gay and lesbian couples
are double income families
and receive health care
benefits where they work. In
workplaces without
non-discrimination policies
covering sexual orientation,
some workers might not feel
safe enough to "come out"
and ask for such benefits.
And these benefits are
counted as taxable income to
the employee--unlike the
same benefits given to the
families of heterosexual
workers.
What are the tax
ramifications of domestic
partner benefits?
There is no tax ramification
for the employer, according
to private letter rulings by
the Internal Revenue Service
to some employers who have
inquired. Employers can
treat their portion of the
partner's or partner's
dependents insurance as a
reasonable and ordinary
business expense, which is
therefore tax deductible in
the same way that
spousal/dependent payments
are. While married
heterosexual employees can
pay insurance premiums for
their spouses with pre-tax
dollars, an unmarried
employee with a domestic
partner must use after-tax
dollars. Plus, employers
must report as income to the
unmarried employee the fair
market value of the domestic
partner benefits, even if
they are not used.
By asking for these
benefits, aren't gays
seeking "special rights?"
No, lesbian and gay workers
are seeking the same
benefits as their legally
married counterparts.
Domestic partner benefits
amount to equal pay for
equal work. A gay employee
in a committed
relationship--who has no
legal right to marry--is in
effect paid less than a
heterosexual co-worker whose
legal spouse receives such
benefits.
Are there any laws
that mandate domestic
partner benefits?
In June 1997, a law went
into effect in San Francisco
mandating that any
organization doing business
with the city or county to
offer domestic partner
benefits. After a court
challenge led by the Air
Line Pilots Association, the
law was determined to apply
to any contractor other than
an airline, which is
federally regulated.
Is there a standard
definition of domestic
partner?
An employer can define the
term however it wants to.
However, the most common
definition of domestic
partner is two people in a
relationship of at least six
months who can prove it with
rent or mortgage receipts,
wills, insurance policies,
bank statements or the like.
The partner seeking coverage
must have no other access to
medical insurance and must
not be legally married to
anyone else. Both parties
must be of legal age and not
related by blood.
What if we can't find
an insurer, or local
regulations will not allow
these benefits?
Health maintenance
organizations are not under
the auspices of insurance
regulating agencies and many
of them write these
benefits. Standard insurers
that do fall under such
regulatory bodies and do
business in the 50 states
can usually find a way to
license a plan in another
state. Self-insured
employers should not have
any problems. If your
company says it would like
to offer the benefits but
can't because the insurer
won't write them, double
check that yourself. If it's
true, ask your company to go
shopping.
Activities to date taken by the subcommittee to investigate the potential barriers to domestic partnership benefits at CWRU:
SAC Fringe Benefits Committee 1/99A second meeting was called in January where the committee voted by consensus that: domestic partnership would include same and opposite sex couples and the benefits to be provided included those provided by Benelect along with tuition. This decision was based on a review and discussion of the University's non-discrimination statement.
It was also decided that SAC Fringe Benefits Committee would distribute the information collected to date to the SAC committee. SAC members will be asked to review the information and will be invited to contact any member of the SAC Fringe Benefits Committee to discuss or clarify any of the points contained in this document. The larger goal will be to hold roundtable discussion across campus where staff, as a group, can gather to discuss this issue.
To date, a presentation has been made to the staff of Mandel School of Applied Social Sciences (MSASS) and letters of support have been received. In addition, the Dean of MSASS is supportive of domestic partner benefits. Progress has been made with regard to dovetailing efforts with the faculty fringe benefits committee and this item will continued to be pursued.
SAC FringeBenefits
Committee 1/99
Committee met with the
Director of Human Resources.
The meeting provided the
committee with the following
strategic information: (1)
as a committee developing a
consensus agreement on the
definition of domestic
partnerships and the
benefits to be provided; (2)
dovetail efforts with the
Faculty Fringe Benefits
Committee; (3) provide SAC
at large with the
information collected to
date. The goal is to discuss
and vote on a resolution
from SAC at the April Full
SAC Committee meeting; and,
(4) expand the dialogue to
all SAC constituencies.
University Fringe
Benefits Committee 12/98
As a committee agreed that
domestic partnership
benefits should be offered
at Case Western Reserve
University. Requested that
the Department of Human
Resources contact comparison
schools and local employers
that offer this benefit in
order to better understand
details surrounding
implementation, types of
benefits offered, and cost
and feasibility.
Executive Faculty
Fringe Benefits Committee
12/98
As a committee agreed that
domestic partnership fringe
benefits should be offered
at Case Western Reserve
University. Agreed to take
this topic and present it to
the University Fringe
Benefits Committee.
Meeting with the
Faculty Fringe Benefits
Committee 10/98
In general, the committee
felt that to be consistent
with our stated
non-discrimination policy
and the message of the
"Share the Vision Program,"
CWRU should prepare to
expand its benefits program
to include partners.
However, there are many
details to be considered
before the committee can
make a recommendation. As
well as the ethical
implications, we discussed
positive and negative
effects on student, staff
and faculty recruiting and
on fund-raising, tax
implications, and the
definition of partners. We
must consider what programs
are available from insurance
and health care providers
and the legal implications
of a revised policy. There
will be increased costs to
the fringe benefits program
which could affect our
ability to improve other
programs.
Evidence that Kaiser and QualChoice provide domestic partnerships:
11/98 conversation with Kathleen Patton from QualChoice Health Plan, Inc.:QUALCHOICE HEALTH PLAN, INC. ELIGIBILITY CRITERIA FOR DOMESTIC PARTNERS' BENEFITS
In accordance with our nondiscrimination policy, QualChoice Health Plan, Inc. is providing the opportunity for employees with domestic partnerships to obtain health care benefits for their partners and eligible dependents within a family health care plan.
11/98 conversation
with David Renner from
Kaiser:
There is no additional cost
charged to the University
from Kaiser Permanente if
the domestic partner
coverage rider is added. The
amount for an employee plus
domestic partner would be
the same as is presently
charged for an employee plus
spouse. Kaiser is prepared
to add this rider as an
amendment to the present
1999 CWRU contract at any
time. It could be added
tomorrow and does not need
to wait until the next
contract negotiation.
Which of the comparison universities offer domestic partnerships?
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Dartmouth Duke John Hopkins M.I.T. Northwestern University of Rochester |
Carnegie Mellon
CWRU Vanderbuilt Washington University |
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Examples of some of the criteria employers have used to determine the existence of a domestic partnership between two adults. Domestic partners must:
- Live together
- Have a close, personal relationship
- Act as a couple in public, as well as in private
- Be responsible for each other's welfare as evidenced by financial interdependence (e.g., common investments, joint home ownership or naming each other as beneficiaries)
- Intend to be life partners
- Be registered in a municipality as domestic partners, where available
- Not be legally married to anyone else
- Not be blood relatives
- Be mentally competent
- Demonstrate joint finances
