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Frequently Asked Questions on Domestic Partner Benefits

What is a domestic partner?
Domestic partners are two individuals who are in a long-term committed relationship and are responsible for each other's financial and emotional well-being. Employers usually set their own definitions of domestic partner when they decide who is eligible for domestic partner benefits. Such definitions frequently require that the partners have lived together for at least six months, are responsible for each other's financial welfare, are at least 18 years old and are mentally competent to enter into a legal contract.

What are domestic partner benefits?
Many employers offer extra compensation to employees beyond their wages, such as health insurance, dental care, relocation expenses and the like. Often, such benefits are also extended to legal spouses and children. When such perquisites (or perks) are also offered to unmarried domestic partners, they become domestic partner benefits.

What was the first employer to offer domestic partner benefits?
The Village Voice, a New York City weekly, became the first employer to offer domestic partner benefits to its lesbian and gay employees in 1982. By 1990, there were fewer than two dozen U.S. employers that offered "spousal equivalent" benefits to their gay employees' partners. In 1992, Lotus Development Corp. became the first publicly traded company to offer such benefits. (Lotus is now a division of IBM.)

How rapidly have the benefits caught on?
As the chart shows, employers in America have been adding DP benefits at a rapid pace. According to HRC WorkNet's 2001 edition of "The State of the Workplace" report, the number of employers providing DP benefits increased by 50 percent from August 1999 to August 2001 -- from 2,856 employers to 4,285.

How are America's largest corporations addressing domestic partner benefits?
HRC WorkNet's 2001 edition of the "The State of the Workplace" report found that the number of Fortune 500 companies offering DP benefits more than doubled in three years, from 61 in 1998 to 145 in 2001. The trend among the Fortune 500 suggests that the higher a company's rank, the more likely it is to offer DP benefits. While 29 percent of the Fortune 500 companies provide DP benefits, 54 percent of those in Fortune 50 offer the benefits.

How much will it cost a company to provide DP benefits?
Research by the Institute for Gay and Lesbian Strategic Studies Research Director M.V. Lee Badgett found that most employers that offer DPBs to same-sex partners find expenses rise no more than 1 percent. For employers that offer them to same- and opposite-sex partners, expenses tend to rise no more than 2 percent. A 1997 study by the Society for Human Resource Management found that 85 percent of employers experience no cost increase as a result of providing domestic partner benefits.

Why are my domestic partner's benefits taxed and my married colleagues' benefits aren't?
The Internal Revenue Service has ruled that domestic partners cannot be considered spouses for tax purposes. Thus, employers are obligated to report the fair market value of the domestic partner coverage as income to the employee. The employee must pay income tax on that money. Domestic partner benefits may be considered non-taxable only if the domestic partner meets the IRS definition of a "dependent." Internal Revenue Code Section 152 defines a dependent as someone who resides in the employee's household and who receives at least half of his or her support from the employee.

Rep. Jim McDermott, D-Wash., has introduced a bill to amend the Internal Revenue Code to exclude domestic partner benefits from being taxed.

Does the federal government offer benefits to the domestic partners of its employees?
While no health insurance benefits are available to federal employees, some federal agencies grant limited benefits, such as allowing their employees to take sick leave to care for domestic partners. All agencies are different, however. For information on a specific agency's policies, contact Federal GLOBE, a group of LGBT employees of the federal government.

Rep. Barney Frank, D-Mass., has introduced a bill to make domestic partner benefits available to federal employees' same- and opposite-sex partners. These benefits would be similar to those currently offered to legal spouses.

Which cities require contractors to offer DP benefits?
In 1996, the city of San Francisco passed the nation's first equal benefits ordinance, which requires employers that contract with the city government to offer the same benefits to employees' domestic partners as they offer to their legal spouses. Since then, these jurisdictions have passed similar laws: Los Angeles; Seattle; Berkeley, Calif.; Oakland, Calif.; San Mateo County, Calif.; and Tumwater, Wash. These laws have led more than 3,000 employers to provide equal benefits to employees' unmarried partners.

Source: Human Rights Campaign