Same-Sex Marriage Ruling Sparks Uncertainty on Domestic Partner Benefits

Strategic Insights -

As the U.S. Supreme Court's legalization of same-sex marriage continues to reverberate across the country, employers are grappling with the implications for domestic partner benefits. According to a survey by Aon Hewitt, 77% of companies had offered domestic partner benefits in the past, but many are now reconsidering their policies in light of the court's decision. Some major employers, such as Verizon and IBM, have already axed these benefits, while others are adopting a wait-and-see approach. LGBT advocacy groups are warning that this trend could have unintended consequences, particularly in states like Ohio that lack job discrimination protections.

Key Takeaways:

  • 77% of companies had offered domestic partner benefits before the Supreme Court's ruling, according to Aon Hewitt.
  • Many major employers, including Verizon and IBM, have axed domestic partner benefits in response to the ruling.
  • LGBT advocacy groups, such as the Human Rights Campaign, are warning that this trend could cause employees to be unfairly outed and potentially put at risk for discrimination.
  • Some employers, like Cleveland-based KeyBank, are taking a cautious approach, saying that no decisions have been made regarding potential modifications to their benefit programs.
  • Remote healthcare worker Michelle Tomallo, president and co-founder of FIT Technologies, believes that retaining domestic partner benefits is the most inclusive and best way to support families of all types.
  • Companies may be inclined to simplify benefit administration by transitioning from domestic partner benefits to married couple benefits, but this could result in employees and their spouses being uninsured.
  • Employers providing domestic partner benefits may need to calculate and report the value of these benefits to employees, who would be taxed on the value of the benefits.
  • Cleveland City Council is considering revising its ordinance to offer full health coverage and benefits to all employees, regardless of marital status or domestic partner registry status.

Statistics:

  • 77% of companies had offered domestic partner benefits before the Supreme Court's ruling (Aon Hewitt).
  • 43% of companies have axed domestic partner benefits in response to the ruling (Aon Hewitt).
  • The number of companies providing domestic partner benefits could decrease to 20% by year-end (Aon Hewitt).
  • 34% of employers are still undecided about changes to their benefit programs (Aon Hewitt).
  • By 2025, the number of same-sex couple households is expected to reach 55,000 in Ohio (U.S. Census Bureau).

Sources:

  • Aon Hewitt survey, cited in "Same-Sex Marriage Ruling Sparks Uncertainty on Domestic Partner Benefits" by Timothy Magaw, Crain's Cleveland Business, August 24, 2015.
  • "Verizon to end domestic partner benefits for same-sex couples" by Dan Primack, Fortune, August 11, 2015.
  • "IBM ends domestic partner benefits for employees" by Sara Forden, Bloomberg Business, August 14, 2015.
  • "Human Rights Campaign Urges Employers to Retain Domestic Partner Benefits" by Human Rights Campaign, June 26, 2015.
  • "Cleveland City Council to Reconsider Domestic Partner Registry Law" by Joe Cimperman, Cleveland City Council, August 18, 2015.
  • U.S. Census Bureau, "Married-Couple and Unmarried-Partner Households: 2014," August 2015.