CCH® BENEFITS - 8/8/07

More Than Half Of Fortune 500 Companies Offer Same-Sex Domestic Partner Benefits

From Spencer's Benefits Reports: In 2006 and 2007, 267, or 53%, of Fortune 500 companies provided benefits to employees's same-sex domestic partners, according to the Human Rights Campaign Foundation's (HRCF) annual State of the Workplace for Gay, Lesbian, Bisexual, and Transgender Americans 2006-2007. The number of Fortune 500 employers offering such benefits is nearly six times the 46 employers that did so in 1997, and 17 have added domestic partner health care benefits since Jan. 1, 2007.

For comparison purposes, 60% of the colleges and universities that comprise the U.S. News and World Report magazine's annual list of the Top 125 Colleges & Universities provide health benefits to the same-sex partners of their employees, according to the HRCF.

The HRCF is a Washington, D.C.-based civil rights organization working to achieve gay, lesbian, bisexual, and transgender equality

Although many firms fear that offering same-sex domestic partner benefits will increase the firms's benefits costs, employers sponsoring such benefits report otherwise - in 2005, 64% of these employers reported that domestic partner benefits represented less than 1% of total benefits costs; while for 88% of firms, it was less than 2%. The report, released on July 24, noted that 58% of employers that offer same-sex domestic partner benefits also do so for opposite-sex domestic partners.

Nearly 70 companies, including IBM, Eastman Kodak, American Express, and Microsoft, also offer comprehensive transgender health care benefits. Thirteen states (California, Connecticut, Illinois, Iowa, Maine, Montana, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington) and the District of Columbia and 145 local jurisdictions offer same-sex domestic partner benefits, the HRCF found.

Colleges And Universities

The HRCF identifies 13 states and the District of Columbia that provide state employees with domestic partner benefits: California (whose policy was established in 1999), Connecticut (2000), the District of Columbia (2001), Illinois (whose policy was established in 2004 for unionized workers and in 2006 for all other workers), Iowa (2003), Maine (2001), Montana (2005), New Jersey (2004), New Mexico (2003), New York (1995), Oregon (1995), Rhode Island (2001), Vermont (1994), and Washington (2001).

A Michigan state appeals court ruling from Feb. 1, 2007, held that domestic partner benetis could not be provided to Michigan employees because of the state's 2004 amendment banning marriage for same-sex couples. Providing partner benefits, the court held, constituted state recognition of domestic partnership, which it considered unions similar to marriage. The case is likely to be appealed to Michigan's Supreme Court.

One hundred and forty-five local jurisdictions also provide partner health benefits to their employers, according to the HRCF. Implementing domestic partner policies in 2007 were the cities of Achorage, Aka., and Greensboro, N.C.; and the counties of Athens-Clarke in Georgia and Ulster in New York.

Results From The Pension Protection Act

The HRCF notes that, under the Pension Protection Act of 2006, any beneficiary, including a domestic partner, parent, or sibling, may roll over inherited retirement benefits tax-free to an IRA, if the plan permits this procedure.

Businesses have until Dec. 31, 2009, to amend their retirement plans accordingly and they must notify their plan's recordkeeper that they wish to do so, the HRCF explained. Similarly, qualified retirement plans that allow employees to withdraw funds from their retirement plans to pay for qualified financial hardships now may do so for any primary beneficiaries, if the employers have opted for the change. Employers also may provide for the surviving same-sex partner of a deceased employee to receive a pension annuity for the rest of his or her life, as is done for opposite-sex spouses.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.