With the recent legalization of gay marriage in Massachusetts, many large companies in the commonwealth are moving to drop Domestic Partner benefits, now only accepting married couples (gay or straight) for health insurance benefits.
The Boston Globe presents both sides of the story pretty simply. The businesses come off as no-nonsense, saying that Domestic Partnership was a concession by business to overcome a shortcoming of government. On the other hand, a gay advocacy group makes some decent points about why gay couples shouldn’t be forced into marriage to maintain benefits they have received for years.
Your thoughts? I have my own.
Categories: TrendWatch
10:16 am | 2 comments
December 8th, 2004 at 3:09 pm
It is an unfortunate side effect of “progress”.
The corporate base for thier argument is what was printed in the article:
“Massachusetts companies, some of which pioneered so-called domestic-partner benefits for unmarried, same-sex partners, said they are now withdrawing them for reasons of fairness: If gays and lesbians can now marry, they should no longer receive special treatment in the form of health benefits that were not made available to unmarried, opposite-sex couples.”
Two things to remember:
1) This action was announced last spring. Companies are not springing it on thier gay and lesbian employees three weeks before the end of the year. This garnered a lot of press back in May… as J.E.T. and I had conversations/debates over this issue.
2) Many of these companies said to the Boston Globe back in May that the Domestic Partnership Benefit would remain in effect in states where gay marriage was not legal. So it does not affect people in CT, NH, VT, etc…
Health Care costs are excessive. The Globe reports that only 1% to 2% of gays and lesbians in the work place enroll in the program (if I read that correctly) BUT you are looking at the glass from the wrong end. Domestic Partnership Benefits were not offered to heterosexuals in the same situation.
If you now say you have a family plan for people who are married but also a Domestic Benefit Coverage plan only for gays and lesbians who do not marry, you run the risk of heterosexual couples demanding the same benefits. The 1% to 2% sampling reported could now become as high as 70% or 80% of qualifying employees or even higher.
The difference in cost between the single plan and the family plan for my organization is $3,540 per year (company Cost) If you have a large organization with 1000 employees who are single and 70% to 80% of the eligible employees apply for this benefit, the added cost each year could be $2,478,000 and $2,832,000 per year.
Now most people say what is the difference for a small employer… assume 50 eligible employees… $123,900 and $148,680.
Unfortunately, companies will have to find ways of off-setting those costs. Most of the time, payroll is what off-sets those added costs. Those numbers from a small company to a large company are going to cause lay-offs. It is a sad statement to make but the small company may lay off three people… where the large company may lay off as many as 50 to 70 people to balance the books.
Here comes the murky side of the argument… What if all those people got married?
Companies would have to pay the benefit. But it would be a more stable environment.
The bottom line is that the state marriage laws now view all people on the same level playing field. Marriage is marriage. There is no need for a Domestic Partnership Benefit. It would be discriminatory to have a plan for one group and not another… and I don’t know many companies who want to add thousands up to millions of dollars to an already shaky bottom line…
Murky question that is soon to be asked: Wasn’t the original intent of the Domestic Partnership Benefit discriminatory? Technically, yes. But this may be one of the few times in history when two wrongs actually did make a right.
So to answer your question, I agree with the new company policy. Marriage is marriage as defined by the Supreme Judicial Court of Massachusetts. Therefore, a traditional family plan would be applicable to the situation.
December 8th, 2004 at 8:30 pm
You’re overstating the cost of the benefit in practical terms. Not all the married couples take advantage of company provided health insurance (think in cases where both spouses work at different companies). Also, a very small percentage of unmarried couples take advantage of such a benefit even when offered to heterosexual couples.
How do I know? Nearly every job I’ve worked at has offered domestic partner benefits not restricted to sexual orientation.
So, you’re overstating the cost. We have ample data to calculate real adoption rates and reasonable adoption costs… let’s not start making stuff up.