Definition of Domestic Partners Benefits
Domestic Partners Benefits refers to privileges that an employer voluntarily gives to his or her employee’s unmarried partner. T he benefits are extended to partners of the same or from opposite sex. However, the eligibility of the partners depends on the company or state. The benefits offered ranges from simple to high cost benefits. The eligibility is normally based on some core elements that are drafted by the employer who wishes to implement the program (Employee Benefit Research Institute, 2009).
This program was started in 1982 by a New York City newspaper known as the Village Voice. The newspaper offered the benefits to both same and opposite sex partners. In 1985, the program was introduced into the public sector in the United States through the Berkeley City. Since then, over 3,500 employers from the private and public sectors have followed suit (Anderson, 2003).
Cost of offering Domestic Partner Benefits
Domestic Partner Benefits are offered by employers who wish to give back to their employees. However, there are concerns by the employer about the program because offering the program translates to increased expenses especially in offering the health benefits. The cost question is normally subject to the number of new beneficiaries and the risks exposed to those individuals (Employee Benefit Research Institute, 2009).
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The benefits are voluntarily given by public and private employers. By 1985, more than 3,500 employers had started offering the benefits to its employees (Bromer, 2006).
The employer is under no legal obligation to extend the rights to the partners according to Consolidated Omnibus Budget Reconciliation Act 1985(COBRA), (Human Rights Campaign, 2010). According to Health Insurance Portability and Accountability Act 1996 (HIPAA), Domestic Partners may not be beneficiaries of the health insurance. The benefits extended to domestic partners are regulated by the Employee Retirement Income Security Act, 1974 (ERISA) (Employee Benefit Research Institute, 2009).
Most companies offer the benefits for fairness to its employees who are married and those who are not married to create equality amongst the employees. Some employers extend the cover even to couples of the same sex thus removing discrimination against gays and lesbians who may not be recognized in a marriage setting. The benefits increase the competitiveness of a company in drawing many employees or in a bid to retain the employees already in the company. It is worth noting that some cities place this as one of the conditions (Employee Benefit Research Institute, 2009).
Unlike the benefits offered to married couples, the Domestic Partners Benefits forms part of the taxable income of the employee. The employee also payss tax for the premiums paid for these benefits. The employee can only be exempted from paying of tax if the partner is dependent on the employee. That is, the partner lives in the same house with the employee and is supported by more than a half of the employee’s income (Employee Benefit Research Institute, 2009).
The cost of offering these services might be more than a company had anticipated especially when offering health benefits. However, the cost is not left to the employer alone. Health Maintenance Organizations also play a part but with hesitation mainly because of cost.
The program may be abused by employees who forward their sick friends instead of the bona fide partners so that they can benefit from the program. This increases the costs to the insurer and may refuse to offer a contract to the employer as a result. The insurer may also be reluctant to offer a contract in fear of covering more employees who have a likelihood of being infected with AIDS which is expensive to treat (Employee Benefit Research Institute, 2009).
Some employers do not offer a complete package as opposed to those offered to married couples. Most of these benefits are subsidized because they are easy to implement (Bromer, 2006).
Domestic Partner Benefits was started to ensure equality in benefits offered by the employers to its employees and for the employers to remain competitive in a tight market. The benefits are voluntary although it is a requirement in some cities.