More Companies Cover Taxes for Domestic Partner Benefit Packages
While many companies offer health care plans for domestic partners, a growing number are paying extra taxes on the benefit to help "make life a little more equal" for employees in same-sex relationships, the New York Times reports.
It is up to companies to decide whether to offer domestic partner benefits. About 58% of Fortune 500 companies offer domestic partner coverage for same-sex couples, according to the Human Rights Campaign. About 36% of large companies and 20% of small companies offered the coverage in 2009, according to a survey by the Kaiser Family Foundation.
However, even in companies that offer domestic partner benefits, gay employees must pay an extra tax for their partners' benefits because the federal government does not recognize same-sex relationships as an economic unit like heterosexual married couples.
As more companies become aware of the discrepancy, many are choosing to cover the extra cost, a practice known as "gross[ing] up." Typically, it costs employers about $2,000 to $2,500 on average to gross up an employee who incurred taxes between $1,200 and $1,500, according to Joseph Adams, a lawyer who specializes in employee benefits.
While more companies are beginning to gross up, it still represents a minority. A large group of major corporations recently joined a coalition led by HRC to lobby Congress to eliminate the extra tax. However, many of those companies still do not gross up for their employees in same-sex relationships (Siegel Bernard, New York Times, 5/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.