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New family definitions reach
dependent coverage

By Susanna Duff

The nuclear family has gone the way of soda fountain counters, and with it went the clear-cut definition of a dependent. In response, a small but growing number of employers have begun to offer extended family benefits, which can include care for domestic partners, parents and grandchildren.

The new definition stems from a desire to treat domestic partners equitably as a beneficiary category irrespective of sexual orientation, says Ilse de Veer, a senior consultant with William M. Mercer’s Stamford, Conn., health care and group benefits office who has helped design extended family plans.

“Employers wanted to address the domestic partnership issue
without addressing the domestic partner issue,” de Veer explains.  In other words, broad language that addresses “partners” monolithically dismisses equity questions such as whether a partner is same-sex or opposite sex. But dismissing those questions tends to raise others, authorities point out. If partners, what about dependent family members? Narrower plan language typically makes sure the covered person meets the Internal Revenue Service definition of tax dependent, de Veer observes.

She notes the trend surfaced in 1996 when San Francisco
ordained that organizations with which the city contracts business must offer domestic partnership benefits.

That posed a dilemma for some contracting organizations, such as the San Francisco Catholic Archdiocese, whose Catholic Charities subsidiary is the largest housing provider for AIDS patients in the city. The Archdiocese didn’t want to be forced to condone domestic partnerships, yet it didn’t want to stop its program, says Maurice Healy, spokesperson for the Archdiocese.  The organization appealed, and a year later, the city agreed to give employers wiggle room in the form of a pledge to offer health benefits to a workers’ dependent household members. Now the Archdiocese employees can include parents, aunts or uncles or domestic partners, without having to tangle with details.

Financial world leads pack

Other employers have followed suit in expanding coverage to adults in the household and have followed similar formats. Surprisingly, many are in the financial institutions, which typically trail when it comes to progressive benefits. But in a tight labor market it only takes one trendsetter to create a blueprint copied by other employers, de Veer says.

The former BancAmerica, based in San Francisco, used the Catholic Archdiocese’s benefit program as a model. It merged with Nation’s Bank on Sept. 30 to form Bank of America, which will start to offer “extended family benefits” to all employees starting next month. Workers will be able to add one additional adult who is “under age 65, a federally dependent adult and lives with the person,” says spokesperson Melba Spencer.

Chase Manhattan Bank, based in New York, has covered domestic partners in its work and families policies since it merged with Chemical Bank in early 1996. But starting Jan. 1, it will expand its medical and dental policies to cover one qualified tax dependent adult – including spouse, domestic partner or extended family member – over 18 years of age.

The bank wasn’t pushed by fear of condoning any type of lifestyle or an increase of elder- care needs, says Tara Bettendorf, vice president of health benefits. Rather, the move reflected the firm’s desire to update its health benefits to be “inclusive and to acknowledge that people have different lifestyles,” she says.

Yet another financial institution, Merrill Lynch & Co., isn’t just extending its health benefits, which it will begin to offer to same or opposite sex domestic partners and family members between ages 18 and 65 who are tax dependent starting Jan. 1.

Stephanie Kiefer, vice president of human resource policy and programs, says the nation’s largest brokerage firm is expanding its guidelines of relocation cost coverage to include domestic partners and its bereavement and personal leave to include needs relating to domestic partners and extended family.

Kiefer says it didn’t take an outcry from employees for the company to expand coverage. Merrill Lynch just wanted to keep a competitive edge. “We saw this as an up-and-coming benefit. We recognize the definition of family is changing and try to be respectful of the broadening definition,” she says.

And while it may seem that extended coverage seems to be sweeping through the financial industry, other industries may follow, forecasts de Veer who says she frequently gets calls from interested companies.

This article appeared in Employee Benefit News, December 1998.


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