Friday, November 12, 2004

Domestic partner benefits gaining acceptance

A story published today in the Daily Herald reports that despite the fact that voters in 11 states supported bans on gay marriage last week,  American businesses have largely taken the opposite approach when it comes to extending benefits to unmarried couples, homosexual or heterosexual.

Businesses extending benefits to unmarried couples - whether gay or straight - has become so commonplace that when the Chicago Sun-Times added it to a new union contract last month, it spurred no controversy.

According to a recent report from the Human Rights Campaign, which bills itself as the biggest gay and lesbian organization, more than 7,100 private employers and colleges, and about 40 percent of Fortune 500 companies, now offer domestic partner benefits.

The reason so many businesses extend benefits to couples in domestic partnerships is partly due to it not costing any more than it would for adding married couples, say some experts.

"The evidence that we have so far - and it's pretty much anecdotal - is that there's not a big increase," said John Piro, lead health care attorney at Lincolnshire-based Hewitt Associates, a global human resources consulting firm.

Piro's sentiment is echoed by many in the health care insurance industry.

Health insurance accounts for the bulk of employee benefits at most companies.

"It's more of a numbers game," said Mohit Ghose, director of public affairs for America's Health Insurance Plans, a national association whose members provide health benefits to more than 200 million Americans.

The more people in an insurance plan, the more a company pays, regardless of who those people are, Ghose said.

Since companies don't believe it costs much more, they offer the benefits in order to help with recruiting, or because they're complying with non-discrimination policies.

The employee benefits industry's nonchalant incorporation of domestic partnerships in recent years hints how quiet companies may be about the financial consequences if same-sex marriage ever gains widespread acceptance.

Other analysts however, say what little public information gauging the financial impact of offering benefits to domestic partnerships exists is largely faulty.

"Estimates of health-care costs for domestic partners are either unreliable or outright guesswork because they ignore the disproportionate number of high-risk people enrolling in the benefits program and the increased medical costs associated with same-sex couples," wrote Virginia-based insurance analyst Michael Hamrick, in a 2002 paper on the hidden costs of domestic partner benefits.

One study of an insurance pool of about 700,000 small business employees in California showed the companies spent 17.1 percent more on same-sex couples than heterosexual couples, Hamrick wrote.

When domestic partner costs are spread among the entire pool, as is the case in most studies, Hamrick argues, the small numbers involved don't cause costs to spike significantly overall.

That's because the number of people applying for the benefits is few.

According to the 2000 Census, in Illinois there were 219,546 unmarried couples living together - both heterosexual and homosexual.

That's just 1.8 percent of the 12.4 million people in Illinois at the time.

A 2000 survey of 520 companies by Hewitt Associates found that an average 1.2 percent of all employees actually took the domestic partner coverage, since often they receive health insurance elsewhere.

Any fear that coverage of domestic partners would bring increased cost for HIV or AIDS cases appears to be offset by fewer pregnancies, said Steve Blakely, spokesman for the Employee Benefit Research Institute, an organization that educates the public about employee benefits.

"You'd expect things like AIDS would raise up the cost. That hasn't been the experience," Piro said.


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