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In Talent Hunt, Some Businesses Offer Health Benefits For Same-Sex Couples

Reaction to President Obama's bombshell that he now supports gay marriage ran the gamut from profound to lighthearted.
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Reaction to President Obama's bombshell that he now supports gay marriage ran the gamut from profound to lighthearted.

President Obama's pronouncement last week in favor of same-sex marriage has no legal effect on employers' decisions on whether to offer benefits to workers' domestic partners.

But some advocates say it could reinforce a decade-long trend toward coverage.

Last year, a little more than half of employers offered health benefits for domestic partners, according to a nationally representative sample of about 3,000 employers surveyed by benefit consultant Mercer. That's up from a little less than one-third in 2010.

The biggest factors driving that change are employers' views on whether such benefits help them attract and retain desirable workers.

"Employers started doing this because they felt they needed to be competitive in the labor market, just like with other benefits," said Paul Fronstin of Employee Benefit Research Institute, a think tank in Washington D.C. "I don't see that changing."

The Village Voice newspaper in New York is credited with being the first private employer to offer workers domestic partner benefits in 1982. In 1995, Vermont became the first to offer coverage to state workers.

"There's been a steady growth for a long time," says Joan Smyth, a partner at Mercer. In the early days, some employers worried that adding coverage for domestic partners could make their costs skyrocket by attracting people with higher-than-average health risks, she said, but it didn't turn out that way.

The District of Columbia and almost half of states currently offer benefits to domestic partners or same-sex spouses of state workers, according to the advocacy group Human Rights Campaign.

Same-sex partners of federal workers are not eligible for coverage under the Federal Employees Health Benefits Program because the Defense of Marriage Act, passed in 1996 and signed into law by President Bill Clinton, defines marriage as a legal union between a man and woman, the FEHB website says.

That law is being challenged and may well end up before the Supreme Court. The Obama administration has said it will not defend the statute.

The proportion of companies offering coverage varies widely by region and industry. In the Mercer survey, coverage of same-sex partners was most common in the West, with 79 percent of large employers offering such benefits. It was least common in the South, at 28 percent.

Among manufacturing firms, for example, the coverage rate ranged from a high of 96 percent for pharmaceutical companies to 18 percent for machinery and heavy equipment makers.

Public sector jobs had a lower rate of coverage, averaging 26 percent across state, county and municipal workers, the Mercer survey found.

While Smyth at Mercer doesn't think the president's pronouncement will sway employers, the Human Rights Campaign's state legislative director Sarah Warbelow has a different take. "Hearing the president supports this as well makes this even easier for corporations to get on board," says Warbelow, adding that 58 percent of Fortune 500 companies currently offer domestic partner benefits. Some of those companies limit those benefits to same-sex couples, while others include domestic partners of opposite sexes.

Copyright 2023 Kaiser Health News. To see more, visit Kaiser Health News.

Julie Appleby
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