For love or money – domestic-partner benefits offered to gay employees

Tzivia Gover

Despite the Hawaii ruling, the federal government still won’t recognize gay marriage, leaving only corporate America to give us what’s right: domestic-partner benefits

Like most average American couples, Mary Mice Schatzle, 39, and her partner, D.L. Lescoe, 43, hope to have a baby. And now, when these two Vermont lesbians make plans, they have one less worry: They know that if Lescoe gets pregnant and takes a leave of absence from her job as a high school teacher, the family won’t be without medical insurance. That’s because as of January 1, Schatzle can use her insurance policy from work to cover her lover of nine years and any children they may have. IBM, Schatzle’s employer, is one of about 200 private companies that have decided in 1996 to extend health benefits to same-sex domestic partners.

“It just makes your whole approach to looking at your life easier,” says Schatzle, a computer programmer with IBM for 17 years. Schatzle is unabashedly enthusiastic about her company’s new policy, approved in the fall, making IBM the first blue-chip corporation to offer benefits to same-sex couples. “It’s respectful to our families and our unions,” Schatzle says.

But while she’s grateful for the benefits bonanza, Schatzle is also annoyed that the U.S. government will still tax her on the insurance premiums because she’s not legally married. In the same year that corporations such as IBM and American Express got in line to recognize gay families, the federal government passed the Defense of Marriage Act. DOMA allows individual states to ignore same-sex unions even if they become legal in other states – such as Hawaii, where a state court ruled December 3 that gays are entitled to marriage licenses. (However, pending an appeal, gays can’t marry there either.)

With one eye on the federal government s track record and the other on corporate America, an observer could go cross-eyed. So why are corporations willing to recognize gay and lesbian families while Congress is adamantly opposed to same-sex marriage? Although the issue appears to be the same in both cases, there is a key difference: The federal government is reacting to marriage, a word loaded with moral and religious meaning, while employers are looking at workplace equality. “It’s often easier for a CEO to make a decision than a legislative body,” says David Smith, a spokesman for the Human Rights Campaign, a Washington, D.C.-based gay lobbying group.

Corporate executives cite a dollars-and-cents bottom line when explaining their willingness to acknowledge gay and lesbian relationships, but politicians raise the name of God when they argue against doing the same. “DOMA was an archconservative attack,” says Robert Bray, a spokesman for the National Gay and Lesbian Task Force. “What’s motivating the government is the right wing.” Yet almost 500 employers have decided that honoring domestic partnerships is good business.

Liz Winfeld, cofounder of Common Ground, a Natick, Mass.-based consulting firm that specializes in sexual-orientation issues in the workplace, says that each week roughly three companies jump on the benefits bandwagon. “It’s definitely a trend,” says Winfeld. But as DOMA showed, the trend stops short on Capitol Hill.

The U.S. government has yet to even do a study on the economic ramifications of legalizing same-sex marriage, says Natwar Gandhi, associate director for tax policy and administration issues at the U.S. General Accounting Office. But M.V. Lee Badgett, an economist at the University of Maryland College Park, has studied the impact of gay marriage in terms of tax costs and other state and federal benefits. If legislators took a close look at her findings, they might move more quickly to legalize gay marriages.

One of the biggest advantages to the government could be gained from a tax-revenue increase. Although gays and lesbians may long to file joint returns, most couples would pay more money if permitted to file together. The so-called “marriage penalty,” which often increases taxes in households where both partners work, would surely affect gay couples, which tend to establish two-income households, Badgett says.

Given this assumption, she makes this quick “back of the envelope” calculation: Estimating that 5% of the nation’s 180 million adults are gay, she posits that there are some 9 million gays and lesbians in the country. Since the HRC concludes that 47% of them are coupled, there would be about 4.5 million partnered lesbians and gays (or 2.25 million same-sex couples). If all those couples were legally married (admittedly, Badgett says, a rather unlikely scenario) and if in those couples both partners worked, each couple would be paying a $1,200 marriage penalty to the Internal Revenue Service – adding up to some $2.7 billion.

Beyond the big tax-revenue boost, gay marriage could prove beneficial for other reasons. Marriage promotes economic stability for heterosexual partners and would do the same for gay couples, Badgett says. There are benefits that gays can now qualify for that could be denied if couples were legally married. For example, eligibility for welfare benefits would take into consideration the resources of the same-sex partner. In other words, members of couples would have to take financial responsibility for each other, thus easing a potential burden from the government.

Badgett points out that single-parent families are economically vulnerable and many end up applying for federal aid. So by refusing to recognize gay marriages, the government now pays more because single people are eligible for such benefits, Badgett notes. The same goes for supplemental security income, which supports the aged and the disabled. Again, an unmarried person is more likely to qualify.

Although the government would have to extend some benefits to gay and lesbian couples, such as social security and pension payments for a surviving gay spouse, in the final analysis of what partners would be able to collect, Gandhi says, “I can’t imagine it would make a substantial difference.” Badgett agrees. If anything, she says, the government would end up saving money.

With all the talk of cutting the budget deficit, Badgett jokes, politicians should be standing in line to vote for gay marriage. “People concerned about weakening the ties of marriage are missing the boat,” she says, adding that legalized gay marriage could benefit society at large. “It’s a way to use our economic resources more efficiently. There are good economic reasons to encourage people to have these relationships.”

These reasons have motivated corporations to put their money on the line. They’ve found that the costs associated with offering domestic-partner benefits are low and are outweighed by the financial gains. Organizations with between 500 and 100,000 employees that have extended benefits to employees’ same-sex partners have noted an average increase in benefits enrollment of less than 1%, says Winfeld. This could be due to the fact that some eligible employees prefer not to be openly gay at work, often because they are single or because their partners already receive benefits at their own jobs. The cost to the company is the same as adding any other person to the plan, Winfeld says.

And while some have argued that because of AIDS, gays will be more expensive to insure, Winfeld says that hasn’t been the case. “First of all, not all gay people are men, and not all gay men are HIV-positive,” she says. Instead the biggest cost to any health plan is childbirth, which is still more likely to be a heterosexual family’s concern. Besides, says Winfeld, “When was the last time an employer told a heterosexual employee he or she can’t marry or have children because they don’t want to add one more person to the plan?”

IBM spokesman Steve Horn says the expense to his company, which employs 122,000 people, is expected to be small: “It’s just another cost of doing business, like any other cost of doing business.” But be assured that the cost is minimal compared with the company’s gains: IBM wouldn’t have changed its policy just to make its gay workers happy. “They don’t do things just to be ahead on social issues,” says Bray. “The reason seems to be the bottom line.”

That bottom line is this: Companies are finding that to be competitive they need to attract top talent, which includes gay and lesbian employees. “I used to think it was a cliche to say that people are our most important asset,” says Randy Massengale, diversity manager at Microsoft. “But people are our only asset. It’s important to keep our people happy and productive.”

“From a business perspective, when an employee knows their loved ones are taken care of, they’re more productive,” says Levi Strauss & Co. spokeswoman Donna Uchida. It also sends a message to members of other minority groups that theirs is a fair company, she adds. At Levi Strauss, where medical, dental, and vision benefits have been available to partners of gay and lesbian workers since 1992, only about 300 of the company’s 25,000 U.S. employees have enrolled for the coverage, says Uchida. By and large the actions of these corporations have met with little or no protest, their spokespeople say. One notable exception was the Walt Disney Co. After announcing its decision to extend benefits to the domestic partners of its gay employees, the family-entertainment giant faced a vocal protest from religious conservatives. But Disney stayed its course.

Smith is optimistic that the trail blazed by corporations will be followed by legislators. It will just take time, he says. Two years ago polls showed that 75% of the American public opposed same-sex marriage. The most recent polls show that only 55% oppose it, Smith noted.

Mary Stanton, events coordinator at Smith College in Northampton, Mass., looks forward to the day the government catches up with her employer. In 1994 Smith extended insurance benefits to the same-sex partners of its employees. That meant that for the first time, Stanton, her partner, and their 4-year-old son could sign on to the same policy and see the same family physician. “It makes me feel like an ordinary citizen – like anyone else,” she says. But, she adds, “it would be nice if we could just get married and get the whole package.”

COPYRIGHT 1997 Liberation Publications, Inc.

COPYRIGHT 2004 Gale Group

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