Businesses should expect some changes in their benefits plans if the District recognizes same-sex “marriage” from other areas in the country, several analysts say.
But how much more it would cost to businesses to add domestic partners as “spouses” on health and life insurance coverage is still not known.
D.C. Council member Jim Graham, Ward 1 Democrat, last month introduced a resolution for the council to work with Mayor Anthony A. Williams to recognize “marriage” from jurisdictions such as Massachusetts, which plans to start issuing marriage licenses to homosexual couples in May.
The D.C. Corporation Counsel Office is examining the legal implications for Mr. Williams. The city’s legal arm is expected to release an opinion on the issue in the near future, said spokeswoman Tarifah Coaxum, who would not give a time frame.
Same-sex “marriage” would affect businesses, although the costs are unknown, said D.C. Insurance and Securities Regulation Department Commissioner Lawrence Mirel.
Employers would be required by law to offer partners in those unions the same type of spousal benefits offered to married heterosexual couples, Mr. Mirel said.
More of the cost of coverage would shift to the employer from the homosexual worker if homosexual partners received the same rights as married couples, he said.
While companies have varying benefits plans, a homosexual employee usually pays for most or all of the cost for covering his or her partner. The partner’s coverage is subject to federal and D.C. income taxes.
In contrast, married workers often pay a smaller percentage of their spouse’s insurance plan, which is not taxed.
For example, D.C. government employees pay 25 percent of their spouse’s costs, while homosexual workers foot the entire bill for their partners.
But even with the changes, the extra costs to businesses could be minimal depending on how much insurance coverage companies choose to pay, said Kit Asbro, president of Financial Brokerage Services Inc., a Cabin John financial-planning company.
“The employer ultimately decides how to share the cost of coverage between employees, whether they are traditionally married or have gay partners,” Mr. Asbro said.
His company recently released a study that found 12 percent of companies in the Washington area offer coverage to same-sex domestic partners, while 90 percent have spousal benefits.
According to a 2000 study by global management-consulting company Hewitt Associates, about 22 percent of companies nationwide offer domestic-partner benefits.
At more than half of the companies in the study, less than 1 percent of eligible employees used the coverage.
Those plans made up less than 1 percent of total benefits costs because of the smaller enrollment and types of benefits used.
Medical and dental coverage were the most frequently extended benefits for domestic partners, the study said.
Gene Fairbrother, a small-business consultant in Dallas, argued the shift of tax burden to employers would be significant.
“Anytime you add on any additional benefits cost to the employer, you have an increase in the cost of doing business that eventually is passed down to the consumer,” Mr. Fairbrother said.
But for companies bringing in new employees, the cost between having an employee with a wife or a homosexual partner would not change if spousal benefits were extended to the partner, said Ken McDonnell, a research analyst with the Employee Benefit Research Institute, a D.C. nonprofit research group.
In the end, companies can opt out of offering any benefits, avoiding the issue altogether, Mr. Fairbrother said.
In the end, a homosexual “marriage” resolution would be more symbolic than effective in changing policy for D.C. businesses, said Jennifer Pizer, senior staff attorney with national homosexual rights group Lambda Legal Defense and Education Fund.
Companies can opt out of offering any benefits, avoiding the issue altogether, Mr. Fairbrother said.
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