Domestic Partner Benefits

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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.

Some Companies Offer Tax Relief for Domestic Partners.
Vesely, Rebecca; Workforce Management; v91 no2 p 15 Feb 2012; journal article

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Abstract : Ernst & Young are among firms leading change in the way companies handle benefits for employees' gay and lesbian partners. Starting in tax year 2012, the company will reimburse workers for additional federal taxes they must pay for partner health care benefits. The Human Rights Campaign reports 32 firms show their commitment to inclusiveness and diversity by providing the tax gross up. As of early 2012, they included Google, Apple, Bank of America, Cisco Systems, Facebook, Goldman Sachs Group and Microsoft. A few, Ernst & Young among them, reimburse for both federal and state taxes. A coalition of 80 firms is asking Congress to remove the tax.
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Coming to America.
Patton, Carol; Human Resource Executive; v26 no1 pp 22, 26, 28-29 Jan-Feb 2012; journal article

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Abstract : When companies bring global expatriates to the U.S., family matters can determine the success of the assignment. Offering some kind of spouse assistance program is common to ease the transition, most often including language tuition, cultural orientation, spouse job search assistance and work permit help. Some firms offer help with demands of daily living such as driving lessons and school tuition. A global Mercer survey found 18 percent provide a family allowance averaging $6,088 and 62 percent set an age limit on support for children. Nearly four in ten firms have expanded their definitions to include long-term partners, including 61 percent of European companies. The World Bank sponsors intranet sites for social networking among its global online communities, and GlaxoSmithKline's International Service Center features a volunteer buddy system to support spouses. The period after the initial transfer and settling in can be most problematic, requiring more support.
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Same-Sex Couples and Retirement Plans.
Pension Benefits; v20 no12 pp 9-10 Dec 2011; journal article

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Abstract : Same sex partners, even if married in a state that recognizes such marriages, are not recognized for qualified plan purposes. The Defense of Marriage Act (DOMA) federally defines marriage as a legal union between a man and a woman, often interfering with state and local laws recognizing same sex spouses. Employers do not have to have a written program on domestic partners, but it is clearly a best practice. Some federal laws accommodate domestic partnerships not recognized under DOMA. Federal qualified joint and survivor annuities and qualified preretirement survivor annuities preempt state laws, making any non-DOMA co-annuitant automatically nonqualified.
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Tax Policy: New York Guidance on Same-Sex Marriage Has Not Stemmed Questions to State Officials.
Herzfeld, John; BNA's Pension & Benefits Reporter; v38 p 2163 Nov 29, 2011; journal article

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Abstract : The New York (state) Department of Taxation and Finance is still trying to work out tax details following its Marriage Equality Act taking effect in July 2010. New York recognizes same-sex marriages performed in other locations, including Canada, but does not recognize domestic partnerships as legal marriage. Same-sex couples must file federal tax forms as singles and complete a recomputed, as-if federal return with married status for pro forma federal figures for the state return, entering a special code to indicate different returns. The state offers guidance memorandum TSB-M-11(8)C addressing general tax issues, while TSB-M-11(8)M pertains to estate taxes, though many questions remain unanswered.
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Same-Sex Partner Rights and Sexual Orientation Discrimination: What Employers Should Know.
Capezza, Michelle; Narbaitz, Dena; Green, David; Swirsky, Steven; Employee Benefit Plan Review; v66 no5 pp 27-31 Nov 2011; journal article

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Abstract : For many employers, offering same-sex partner rights, at least to the extent allowed by law, is crucial for employee recruitment and retention. In six states and the District of Columbia, same-sex marriage is recognized, and some strategies are available to deliver equivalent benefits. Changes to relevant laws that would permit more rights for same-sex partners continue to be introduced, including HR2364, the Family and Medical Leave Inclusion Act and the Employment Non-Discrimination Act, as well as New York's law covering paid bereavement leave. The federal Defense of Marriage Act (DOMA) continues in force, affecting ERISA plans and federal taxation of benefits. Employers should monitor legislative developments and prepare to adjust personnel policies to keep up with changes.
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Steps Employers Should Take to Ensure Employee Benefit Plans Comply With New York's Law on Same-Sex Marriages.
Lewkowicz, Thaddeus J.; Employee Benefit Plan Review; v66 no4 pp 12-14 Oct 2011; journal article

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Abstract : New York's Marriage Equality Act took effect when signed on July 24, 2011, extending legal protections and rights to married couples regardless of gender, with exceptions for religious organizations. Retirement plans subject to the Internal Revenue Code and ERISA offering spousal survivor annuities are not required to extend same sex protections under the state law due to the Federal Defense of Marriage Act, nor are benefits based on federal law, such as COBRA. Self-insured health plans may but are not required to extend comparable benefits to same sex spouses, but some self-insured governmental and church plans, other than religious organization plans, are not preempted by ERISA and must comply. Benefits are subject to federal taxes but not state taxes. New York employers should review all policies and documents for definitions of spouse, amend them as needed and be alert to state guidance.
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ERISA Preemption and Spousal Equivalency Benefits Under State or Local Law for Domestic and Civil Union Partners.
Soubly, Diane M.; Benefits Law Journal; v24 no3 pp 20-47 Autumn 2011; journal article

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Abstract : The rising number of states and local governmental entities permitting same sex marriage is resulting in a patchwork quilt of laws, contrary to the federal Defense of Marriage Act. ERISA likely preempts local laws that regulate self-insured plans that mandate spousal equivalency benefits, but preemption of laws mandating benefits for insured plans is questionable, and laws that permit but do not require equivalency are another issue. Some localities turn to ERISA Section 514, the Savings Clause, to avoid preemption, and inserting provisions in state insurance codes adds protection. Employers with self-insured plans who are averse to recognizing spousal equivalency can assert ERISA's preemption of any direct or indirect regulation of self insured plans. Those with insured plans can look to the Savings Clause or state insurance laws. In any case, employers should rely on an experienced ERISA litigator when considering plan design.
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Hardly the Same.
Hauser, Susan G.; Workforce Management; v90 no9 pp 24, 26, 28 Sep 2011; journal article

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Abstract : Many homosexual couples see state same-sex marriage laws as merely symbolic until federal law follows suit. The Defense of Marriage Act denies all federal recognition for same-sex marriage, leaving employers to deal with multiple state laws on same-sex marriage and civil union. Some employers are providing a gross-up to compensate for the income tax differential, but the employees must still pay payroll tax on the higher gross income. Some companies are requiring couples receiving domestic partner benefits to marry in states where it becomes possible in order to keep the benefits. Potential issues arise for persons married in one jurisdiction if they move to a place where the marriage is not recognized, whether another state or another country.
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Domestic Partner Benefits: New York Regulator Issues Guidance on Tax Impact of Same-Sex Marriage Law.
Silverman, Gerald B.; BNA's Pension & Benefits Reporter; v38 p 1445 Aug 9, 2011; journal article

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Abstract : The New York State Department of Taxation and Finance issued its first guidance on the state's 2011 same sex marriage law. Same sex couples married as of December 31, 2011 must file as married beginning in tax year 2011. When necessary to implement the law, gender specific provisions are to be interpreted as gender neutral. The Department also advised employers not to withhold the value of domestic partner benefits for state income tax purposes, even though they are to be withheld for federal tax purposes.
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Court Considers "Living Separate and Apart".
Godkewitsch, Clio; Canadian Benefits & Compensation Digest; v29 no4 pp 5, 7 Aug 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Carrigan V. Quinn, the Ontario Superior Court of Justice decided a conflict between a deceased pension plan member's estranged spouse and the spouse he was living with at the time of his death. While at the time of his death he was legally married to the first woman, he had been cohabiting with the second woman for eight years. The court affirmed a family law principle that only one party needed to have intention to separate to establish a separation of spouses. Since the deceased was living separate and apart from his legal wife and had openly demonstrated that he had no intention to resume cohabiting with her, the court ruled that the woman he was cohabiting with at the time of his death was his spouse for purposes of his death benefit.
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Link To Full Article
Domestic Partners: Over One-Third of Workers Have Access to Same-Sex Domestic Partner Benefits.
Biggs, Alicia; Daily Labor Report; no143 p D1 Jul 26, 2011; journal article

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Abstract : The Bureau of Labor Statistics' National Compensation Survey for March 2011 showed about 36 percent of private sector full-time workers had access to health coverage for same sex partners, compared with 31 percent for opposite sex partners. For part-time workers, access rates were only nine percent for same sex partners and eight percent for opposite sex partners. About 85 percent of full-time workers had access to health care through private sector employers, and 64 percent participated. For part-time workers, 23 percent had access and the takeup rate was 13 percent. About 54 percent of all U.S. workers received benefits through their own employment. Paid vacation is the most prevalent benefit for full-time employees, offered to 91 percent, followed by health care for 85 percent, paid sick leave for 75 percent and retirement benefits for 73 percent.
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Employee Benefits in the United States: March 2011.
U.S. Department of Labor: Bureau of Labor Statistics: News; pp 1-23 Jul 26, 2011; journal article

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Abstract : The Bureau of Labor Statistics' National Compensation Survey for March 2011 indicates paid vacation time is the most prevalent benefit, offered to 91 percent of full-time private sector workers and 37 percent of part-time workers. Three of four full-time workers and just over one in four part-timers get paid sick leave. Data on unmarried domestic partner benefits, presented for the first time, show 33 percent of state and local government workers and 29 percent of private sector workers can access health insurance for same sex partners. About half of state and local governments offer domestic partners access to survivor benefits, compared with seven percent of private industry employers. Among state and local government employees, 90 percent have access to retirement benefits and 87 percent have access to health plans, compared with 64 percent and 69 percent, respectively, among private sector workers. Takeup of retirement and health benefits lags for private sector workers.
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Equal Benefits Gain Ground.
Heylman, Susan R.; HR Magazine; v56 no6 pp 103-104, 106, 108 Jun 2011; journal article

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Abstract : Employers giving benefits to same-sex couples must keep in mind often contradictory laws. As of the beginning of June 2011, five states and the District of Columbia issue same-sex marriage licenses and eight states grant same-sex partnerships equivalent benefits to marriages. However, the federal Defense of Marriage Act and the laws or constitutional provisions of 41 states prohibit the recognition of same-sex partnerships as equivalent to marriages. While many employers are concerned about the increased cost of benefits, a 2009 Employee Benefit Research Institute study found that offering same-sex partner health benefits was no more likely to increase costs than offering opposite-sex partner benefits. Employees should consider the merits and flaws of each type of same-sex partner benefit separately. One particularly complicated aspect of partner benefits is taxation, which can be significantly higher for same-sex partners than opposite-sex spouses with the same benefits.
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Offering Same-Sex Domestic Partner Benefits to Government Employees: Reasons, Examples, and Methods.
Astray-Caneda, Evelio E., III; Public Personnel Management; v40 no2 pp 89-100 Summer 2011; journal article

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Abstract : Mounting research evidence points to broad advantages of employment policies supportive of gay and lesbian employees. Openness and diversity promotes higher employee engagement and job satisfaction and a general perception of a fair and equitable workplace. When public sector employers offer benefits for same sex domestic partners, they demonstrate respect for civil rights and their available talent pool grows. Following the lead of the private sector, a growing number of countries, states and municipalities offer domestic partner benefits and provide a basis for comparison of policies, legal hurdles, coverage and costs. In setting a policy for benefits for same sex domestic partners, organizations must establish an eligibility definition, delineate benefits to cover and address taxation issues.
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Other Recent Decisions.
Benefits Magazine; v48 no6 pp 67-68 Jun 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Union Security Insurance Co. v. Blakeley et al., the Sixth Circuit Appeals Court resolved the issue of definition of domestic partner when a deceased plan participant's fiancee and children made competing claims to death benefits. Finding the definition in the plan document, the court overturned a magistrate judge's reliance on state statute and remanded the case for consideration using the discovered criteria. In Gretsky v. Edelstein & Co LLP et al., the defendant failed to deliver plan documents to clarify matching contribution calculations and later fired the plaintiff after the plaintiff complained to the Employee Benefits Security Administration. The District Court for Massachusetts supported the plaintiff in his efforts to recover benefits and show breach of fiduciary duty by the company. The court also found evidence supporting a retaliatory discharge claim but dismissed motions against individual partners. In Grant-Bullens v. New Jersey Building Laborers Statewide Annuity Fund et al., the District Court for New Jersey granted the defendant's motion for summary judgment without prejudice. The plaintiff alleged the plan administrator overpaid her ex husband in a divorce division of her pension plan assets. The court ruled the plaintiff should have pursued available administrative remedies. In Duehr et al. v. Marriott Hotel Management Co. VI Inc., the District Court for the Eastern District of Pennsylvania entered a default judgment for the plaintiff, the fiduciary for a multiemployer pension plan. The defendant company had failed to make required contributions for over one year, not responded to demands and provided no explanation for its inaction.
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Link To Full Article
Administration's DOMA Decision Raises Questions for Employers.
Managing Benefits Plans; no13-5 pp 6-7 May 2011; journal article

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Abstract : Employee benefits attorneys say that the Department of Justice's announcement that the administration of Barack Obama will not defend the constitutionality of certain Defense of Marriage Act (DOMA) provisions will have few immediate consequences but raises questions for employers. The DOJ will continue to enforce the DOMA, but it is unclear, for instance, how the government would respond to a refusal by an employer to pay taxes on health coverage for same-sex partners in states that treat same-sex partners as spouses. The retroactive correction of plans to account for this change is also in question. If the DOMA were actually declared unconstitutional, it could have an immediate effect on the tax treatment of spousal health benefits.
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Sexual Orientation: Justice Department No Longer Will Defend Defense of Marriage Act, Holder Announces.
LaBrecque, Louis C.; Daily Labor Report; no36 p A13 Feb 23, 2011; journal article

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Abstract : Attorney General Eric Holder stated that the Department of Justice will not defend the Defense of Marriage Act (DOMA) in suits pertaining to same sex couples who are legally married under state law. Holder noted that, in two cases, Pedersen v. OPM and Windsor v. United States, the Second Circuit Appeals Court found no binding standard governing the legal treatment of sexual orientation. In a Massachusetts case, Gill v. OPM and another heard by the Ninth Circuit, In re Golinski, the courts found no convincing reason to block benefits for employees' same sex spouses. Holder stated the case rulings will demand heightened scrutiny of DOMA Section 3 when brought to the next court level, but he finds no reasonable arguments in defense of the section and concluded it is unconstitutional as it applies to legally married same sex couples.
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IRAs: CRS Highlights Effects of Federal Law on IRA, Other Benefits for Same-Sex Spouses.
BNA's Pension & Benefits Reporter; v38 p 46 Jan 11, 2011; journal article

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Abstract : The Congressional Research Service (CRS) updated a report on benefits for same sex marriage partners, addressing IRAs under Internal Revenue Code Section 408. Contrary to the federal Defense of Marriage Act (DOMA), five states and Washington D.C. legalized same sex marriage, raising questions about IRA, private pension and Social Security benefits. The CRS reports that contributions to the IRA of a nonworking same sex spouse could be subject to a six percent penalty as excess contributions. DOMA Section 3, defining marriage as between one man and one woman, is being challenged by several Massachusetts couples, and the district court there ruled Section 3 violates due process under the U.S. Constitution. Proposals in various federal bills in 2009-2010 ranged from amending the constitution and denying federal courts jurisdiction to consider any DOMA questions to repealing the DOMA.
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It's My Beneficiary's Money and I Want It Now.
Paley, Eric; Mindy, Steven; Journal of Pension Benefits; v18 no2 pp 79-81 Winter 2011; journal article

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Abstract : The IRS has not formally answered questions about provisions of the Pension Protection Act of 2006 expanding the ability of a plan participant to make hardship withdrawals on behalf of his or her primary beneficiary. They have, however, offered informal guidance. An IRS representative has said that while there is no legal restriction on the participant's ability to change beneficiaries for hardship distribution purposes, plans can likely set limits on frequent changes. Informal confirmation has also come that there is no limit on the number of beneficiaries who can receive hardship withdrawals, as long as they are all named beneficiaries at the time and that multiple beneficiaries can receive hardship withdrawals if there are multiple named beneficiaries. Further, the IRS indicated that plan terms can be considered a beneficiary designation if the plan clearly defines the beneficiary.
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Domestic Partners: Gill Lays Groundwork for DOMA Challenges to Employee Benefits.
Renaker, Teresa S.; BNA's Pension & Benefits Reporter; v37 p 1900 Aug 24, 2010; journal article

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Abstract : The Defense of Marriage Act (DOMA) establishes that same sex couples married under state law are not granted federal benefits protections. The District Court for the District of Massachusetts held in the cases of Gill v. Office of Personnel Management and Massachusetts v. United States Department of Health and Human Services that DOMA is unconstitutional, denying Fifth and Tenth Amendment protections and exceeding congressional power. While the court's findings only applied to the specific couples involved in the cases, its analysis could be used for additional constitutional challenges to DOMA.
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Domestic Partners: Federal District Court Rules DOMA Violates Equal Protection Rights of Same-Sex Couples.
Meyer, Jo-el J.; Daily Labor Report; no132 p AA1 Jul 12, 2010; journal article

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Abstract : The District Court for the District of Massachusetts ruled in Gill v. OPM that the federal Defense of Marriage Act (DOMA) does not prohibit benefits for same sex couples. The court concluded that the federal law does not pass constitutional muster since it fails to protect same sex couples equally with heterosexual couples with no rational basis for differentiation. A group of federal employees challenged the constitutionality of the law. The ruling could affect the eligibility, availability and taxability of health care benefits in group health care plans, annuity rights for survivors and other benefits. The court circumvented potential administrative hurdles by stating recognition of same sex marriages should not automatically carry over to other states.
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Impact of Developments in State Same-Sex Union Laws on Employee Benefit Plans.
Solomon, Todd A.; Tiemann, Brian J.; Journal of Compensation and Benefits; v26 no4 pp 38-44 Jul-Aug 2010; journal article

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Abstract : As of mid-2010, nine states and the District of Columbia have legalized same-sex unions or recognize such unions originating in locales where they are legal. Other states recognize some forms of same-sex union or domestic partnerships. Regardless of their location, employers are receiving more requests for spousal benefits for same-sex partners as the practice widens and employees travel to marry in states where they can legally do so. Employers' obligations to extend benefits can depend on the location where a marriage was performed and the employee's state of residence. Insured health plans are subject to the laws of the state where issued, while self-insured plans are subject to federal law and may have the option to provide benefits or not. Any benefits not covered by ERISA can be extended to domestic partners, though there may be tax implications.
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Same-Sex Marriage: DOMA and the States' Approaches.
Eickman, Matthew J.; Daily Labor Report; no122 p I1 Jun 28, 2010; journal article

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Abstract : The Defense of Marriage Act of 1996 exempts state laws regarding same sex marriage from being mandatorily recognized by other states and clarifies that same sex marriages and same sex spouses are not recognized for purposes of any federal law. It does not, however, prohibit states from permitting same sex marriages or recognizing those originating in other states. States are taking a variety of approaches to both of these issues. Includes summaries of the laws of all 50 states and the District of Columbia with regard to same sex marriages and unions.
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Family Leave: FMLA Applies to People Caring for a Child, Including Domestic Partners, DOL Clarifies.
Cinquegrani, Gayle; Daily Labor Report; no119 p AA1 Jun 23, 2010; journal article

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Abstract : A June 22, 2010 interpretation letter from the DOL clarifies the definition of son or daughter under the Family and Medical Leave Act (FMLA), stating a biological relationship is not necessary. The DOL says the letter is a victory for nontraditional families and a critical step in ensuring that children have the support and care they need. The letter says that day to day care and financial support can both establish a relationship in which an employee takes on the responsibilities of a parent. The presence in the home of a biological parent, the letter says, does not prevent an employee without a biological relationship from having a parental relationship with the child for FMLA purposes.
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Domestic Partners: Right to Marriage Is Central Issue in Debate on Employee Benefits for Same-Sex Spouses.
Pazanowski, Bernard J.; BNA's Pension & Benefits Reporter; v36 p 2958 Dec 29, 2009; journal article

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Abstract : The New York Court of Appeals ruled in Godfrey v. Spano that approving spousal employee benefits sponsored by the state and a municipality for a same-sex couple married in another state did not violate state law. Without addressing recognition of same-sex marriage, the court considered use of public funds and New York's civil service law. With inconsistent wording in various states' laws, it is impossible to generalize from this court decision. Some states treat same-sex unions as marriages, and some apply civil union laws without recognizing a spousal relationship. Constraints of the federal Defense of Marriage Act require benefits for the dependent partner in a same-sex marriage to be subject to federal income taxes. As of late 2009, there is no formal recognition of a fundamental right to marriage, which would lead to equal treatment of benefits, though legislation is pending.
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