Benefits for domestic partners maintained

By Kimberly Blanton, Globe Staff | August 22, 2004

With gay marriage on the horizon last spring, Beth Israel Deaconess Medical Center made national news with a seemingly hard-nosed decision to end health benefits for the partners of its unmarried gay and lesbian employees.

The Boston hospital's reasoning: If same-sex couples could legally marry, offering a benefit exclusively for them would be unfair to everyone else. But after the headlines faded, Beth Israel had a change of heart. Lisa Zankman, senior vice president of human resources, met with the hospital's homosexual employees and, at their request, agreed to retain the benefit for now.

Joanne Ayoub, an employee and lesbian who attended the meeting, said she viewed the initial decision as reflecting "the organization's support of the new privilege." At the meeting, however, she said, employees were asking "was this happening too soon?" Ending domestic partner benefits, Zankman said, "was never meant to be a punitive thing -- never."

Legalization of gay marriage on May 17 seemed to spell the end for domestic partner benefits. But in the wake of that watershed event, a majority of Massachusetts employers have decided to maintain them as an effective tool for hiring and retaining good employees -- whether gay or straight.

Corporate adoption of domestic partner benefits is a workplace acknowledgment of a diversity of lifestyles: More than 5 million Americans live in unmarried households, mostly in heterosexual partnerships.

"Whether we agree or disagree philosophically, religiously, or morally, this is an evolution of society for better or worse. From a business perspective, it is a business issue," said Randall Abbott, a consultant to large Massachusetts employers for Watson Wyatt Worldwide.

According to the Northeast Human Resources Association, 60 percent of the 502 New England human resources professionals who responded to an early-August e-poll said their organization offered benefits to unmarried partners. Of those, 91 percent said they will continue to do so.

Ilse de Veer of Mercer Human Resource Consulting said employers confronted with gay marriage fall into two camps. Those that already offered domestic partner benefits are saying, "fine, we'll keep them," she said. As for those that have not covered domestic partners, "Honestly, I think most of them are waiting until somebody walks in with a marriage license," she said. "They're taking a passive approach."

Forty percent of employers surveyed by the association do not offer domestic partner benefits. And whether employers are required to cover the married spouses of gay employees is a legal gray area. Many attorneys interpret the state law as requiring firms to begin covering married spouses of gay employees working in Massachusetts. But De Veer said numerous employers are taking the position they are not required to recognize gay marriage in administering their health plans, because federal law defines marriage as a union between a man and a woman.

Employers are saying that if their health plan is governed by the federal Employee Retirement Income Security Act, "the plan does not recognize same-sex spouses," she said. These employers nevertheless often continue the coverage of a gay employee's spouse under the domestic partner arrangement.

Nationwide, domestic partner benefits grew in popularity in the late 1990s but are more common among large employers. Small employers, in contrast, were unlikely to adopt them at all. Domestic partner benefits primarily are health insurance but some employers include dental, vision, or life insurance. In a 2003 survey by Mercer Human Resource Consulting, 21 percent of US employers with over 500 workers covered same-sex partners, up from 12 percent in 2000.

One reason to maintain domestic partner benefits is that a majority of employers -- 71 percent in New England, according to the association's survey -- extended them to heterosexual employees with live-in partners. The survey also found that two-thirds of employers with a Massachusetts workforce also offer domestic partner benefits to their employees working in other states.

There also is concern among the state's employers that gay marriage might be rendered unconstitutional in a potential 2006 ballot question, forcing them to again change their policies. "People were feeling this isn't cast in concrete yet," Beth Israel's Zankman said. Before making its final decision, the organization will wait and "see what happens."

For a growing number of employers, same-sex health benefits have become integral to the benefits package for all workers. Ninety of Tufts Health Plan's 1,950 employees are enrolled in domestic partner benefits. Of those, some 70 percent have opposite-sex partners, including Kathleen Serrano, a service representative in enrollment and billing. At 56, Serrano, once-divorced, has been with her new partner, Anthony Pino, nearly 11 years. She joined Tufts Health Plan in the mid-1990s and was delighted that she could cover Pino, a self-employed construction contractor, under her health plan.

"It was terrific," she said. Health insurance "is so important today. There's a lot of people who choose not to get married, and it doesn't mean they don't love each other and live happily ever after."

Offering domestic partner benefits "has really been driven more by equality and innovation and making sure we offer a full complement of benefits and less around, can you or can you not get legally married," said Carol Corcoran, senior vice president of the health plan's human resources.

Tufts Health Plan is among numerous large employers that said they are keeping domestic partner benefits intact, according to an informal survey of Boston-area employers by The Boston Globe. Others, like Babson College and Dana-Farber Cancer Institute, said they plan to terminate their domestic partner benefits.

Dana-Farber's benefits manager, Peggy Malumphy, said it was difficult to convey to gay and lesbian employees the decision to phase out the benefit at the end of this year. She spoke with each one individually, and one couple questioned the decision. Malumphy, who is a lesbian, said, "I had to tell them this is a decision near and dear to my heart, so please believe me when I tell you."

The decision to discontinue was mainly financial: if the benefit were maintained for homosexual employees, the research organization would be compelled, perhaps legally required, to offer it to opposite-sex partners. "We went round and round about it," Malumphy said. "We're a nonprofit. We don't have deep pockets."

Out of 2,400 employees, 12 are enrolled in Dana-Farber's same-sex domestic partner benefits; she estimated about half married.

With gay marriage legal in Massachusetts, consultants said employers are changing their health plan documents to comply, describing a married partner as a "spouse," rather than a "husband" or "wife."

But many employers still have done nothing, preferring to deal with the situation if it arises, said Barbara Hough, a health consultant in Boston for Towers Perrin.

'Freedom to Marry Rings' image upper right © H. Mitchell.