Domestic Partner Benefits
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Domestic Partner Benefits:
A Report on the Cost and Value of Providing Benefits to Employees
The Board of Directors
From:
Human Resources Department
Subject: The Cost and Value of Providing Domestic Partner Benefits
Many of the employees at _____, have been requesting benefits for their families. These employees are those who are not married, but still have partners and families to care for. We, at Human Resources, have researched this issue, and developed a report and presentation. In this report we have included guidelines for determining a domestic partner relationship, reasons for this type of relationship, the financial cost for offering benefits to partners, the negative cost to the company, the view of the public, and employee values. We hope that you will take our report into consideration when making you decision about this issue.
What Constitutes a Domestic Partnership
When considering a domestic partnership, the employee must be able to provide proof. The Oregon Public Employees Benefit Board requires that both parties declare the following:
Are at least 18 years of age
Are each others sole domestic partner
Are not married to anyone and have not had another domestic partner within the prior six months
Are not related by blood closer than would bar marriage
Have jointly shared the same regular and permanent residence for at least six months
Are jointly financially responsible for basic living expenses and any other expenses of maintaining a household. Domestic partners need not contribute equally as long as they agree that both are responsible for the cost. If requested, both would be able to provide at least three of the following as verification of their joint responsibility
(a) Joint mortgage or lease
(b) Designation of the domestic partner as primary beneficiary for a life insurance or a retirement contract
(c) Designation of the domestic partner as primary beneficiary in the employees will
(d)Power of attorney for health care or financial management
(e) Joint ownership of a motor vehicle, joint checking account, or joint credit account
(f) A cohabitation contract which obligates each of the parties to provide support for the other party(PEBB)
Reasons for a Domestic Partnership
There are many reasons why people choose a domestic partnership over marriage. These include philosophical, political, economical, religious and personal reasons.
Philosophical:
Many feminists believe that marriage is an establishment that has oppressed women throughout history. They prefer bonding in a non-marital family.
Political:
Women who have divorced due to violence or abuse often are reluctant to re-marry once they find another mate. They see domestic partnership as a way of establishing a family without surrendering themselves to a spouse through marriage.
Some people are making a political stand as a show of support for same-
sex couples who do not have the option of marriage.
Economical:
People of all ages who are widowed or have disabilities do not marry because they may loose pension survivor benefits or government aid. Many seniors are fearful that a new marriage might upset estate plans for their adult children.
Religious:
Some people whose spouses have died or have been divorced against their own will have vowed to never marry again. To many, marriage is a religious experience that they will only have once in life.
Personal:
Widows or divorcees may want a domestic partnership for companionship and security without sexual overtones.
Financial Cost for Offering Benefits
According to a Human Rights Campaign paper, a 2005 Hewitt Associates study revealed that the majority of employers, 64%, experience a total financial impact of less than 1% of total benefits cost, while only 5% of employers experience financial impacts of 3% or greater of total benefits cost.
Furthermore, according to the Society for Human Resource Management, employers that have offered domestic partner benefits report that coverage for domestic partners is no more expensive than coverage for other dependents. Although some people assume that HIV/AIDS will increase the number of catastrophic claims, those diagnoses have proven similar in cost and incident rate to most other life-threatening illnesses.
A 1997 Hewitt Associates study revealed that the impact on companies costs “has been minimal, with the addition of domestic partners, regardless of
whether coverage was extended to same-sex or opposite-sex domestic partners. Companies report increases in medical claims of less than 1% after domestic partner coverage was introduced.” A 2000 Hewitt Associates survey confirmed that adding health benefits for domestic partners is no more expensive than insuring spouses.
Similarly, rates of enrollment have not been particularly high. Possible explanations most commonly cited for this are that same-sex domestic partners are likely already covered by their own employer, or that the employee is simply unwilling to disclose their sexual orientation for fear of discrimination.(Human Rights Campaign, 2006)
According to information provided by the San Francisco Human Rights Commissions website, health insurance providers do not have a surcharge on policies written to include domestic partner benefits. Each state regulates whether or not an employer can provide such benefits.(San Francisco Human Rights Commission, 2006)
Stated several times in the Helgeland v. Wisconsin case – The True Cost of Providing DP Health Benefits (2005), the financial costs are less than a 1% increase. If the figures are looked as being distributed over the entire work force, the cost involved amounts to pennies on the dollar.(American Civil Liberties Union, 2005)
Negative Cost to Company
The rights of individuals seem to take main stage in