Companies used to offer insurance only to employees and spouses of employees. However, changing cultural norms have influenced companies that want to remain competitive to offer insurance to domestic partners. While the phrase "domestic partner" once referred exclusively to gay couples, the term has expanded to include a broader range of partnerships. Companies that offer insurance to domestic partners can attract and retain talent more competitively than companies that don't offer this coverage.
Insurance for Same-Sex Partners
In June 2013, the United States Supreme Court struck down Section 3 of the Defense of Marriage Act, which had defined “marriage” and “spouse” to be applied by law only to opposite-sex unions. This Supreme Court decision opened up new doors for same-sex couples, because it made them eligible for the same privileges as opposite-sex unions regarding federal laws and taxes. Since that ruling, decisions that employers make regarding employee benefits have been impacted by the U.S. Supreme Court’s decision. According to HR.BLR.com, a company that specializes in compliance tools for human resources departments, the majority of Fortune 500 companies have offered health coverage to same-sex couples as far back as 2006. However, the U.S. Supreme Court’s ruling made it easier for more companies to consider offering benefits to same-sex couples.
Heterosexual Domestic Partners
A domestic partnership can include an opposite-sex couple. Several states, including California, Nevada, Oregon, and Washington, Colorado, New York, Hawaii, New Jersey and Illinois, recognize domestic partnerships for heterosexuals. This means a couple can register with the state as domestic partners and then present that registration to a company as proof that they both qualify for insurance coverage. These couples must declare that they are in a committed relationship, live together and share responsibilities for their debts. Though the decision depends on individual company policies, covering domestic partners is possible in states where these unions are officially recognized.
Cost to Companies
Companies seldom experience significant cost increases for covering domestic partners. According to Unmarried Equality, an organization that promotes equality for domestic partnerships as well as single people, the cost to employers for offering insurance to domestic partners is less than 1 percent. The cost for not offering such coverage is more difficult to calculate, but with companies increasingly offering domestic partner insurance, the competitive edge in attracting talent goes to the firms with broader coverage.
Equality of Benefits
Same-sex domestic partners are increasingly suing companies that limit domestic partnership coverage to same-sex couples. According to UnmarriedAmerica.org, most companies that offer coverage for domestic partners include same-sex and opposite-sex couples. However, some opposite-sex couples have successfully sued companies that refuse to cover heterosexual domestic partners. While this is yet to become a full-fledged trend as of publication, the legal vulnerability makes it attractive to extend coverage to domestic partners regardless of sexual orientation.
- HR.BLR.com: Most Fortune 500 Companies Offer Domestic Partner Benefits
- Nolo: Domestic Partnership Benefits
- HealthQuote 360: Domestic Partner Health Insurance
- UnmarriedAmerica.org: Discrimination Claims Filed by Heterosexual Couples
- Paychex: The Impact of the Supreme Court's DOMA Decision on Employer Benefits
Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.