Domestic partner benefits refer to employment benefits offered to unmarried heterosexual or homosexual couples by employers. Although the U.S. Supreme Court has ruled to protect same-sex couples’ marital rights, some duos still opt to remain in committed relationships without being married. Rules that govern domestic partnership benefits vary by employer and location.
History of Domestic Partnerships
In the early 1980s, local governments in the U.S. created the lawful designation of domestic partnerships. This was an era when gay and lesbian activists argued for new family and relationship definitions. Activists stated that less than 10 percent of families consisted of a breadwinner husband, stay-at-home wife, and one or more children; yet, the social systems and employment benefits were based on that outdated model. The Village Voice newspaper was the first company to offer domestic partner benefits in 1982. In 1984, the city of Berkeley became the first city to extend these benefits, and in 1995, Vermont became the first state.
Definition of “Domestic Partner”
A domestic partnership is a legal classification for two unmarried individuals who share a household. The couple must also meet some specific criteria to be eligible for domestic partner benefits. Because an employer sets the criteria, there are not uniform rules. Some commonly used eligibility stipulations include:
“Committed relationships” are defined differently depending on the location, but typical definitions specify a six-month duration of the relationship and/or registering the partnership with the local municipalities.
The benefits offered to those in domestic partnerships range from minimal, inexpensive plans to pricier, comprehensive benefits. Health insurance is the most valuable of the employee benefits. Some employers hesitate to offer healthcare coverage because they are worried about high premiums and associated costs. The increased financial burden of adding domestic partners to policies is less than many employers think, however, because individuals in domestic partnerships tend to be younger, healthier, and in the case of same-sex unions, less at risk of medical expenses due to pregnancy and childbirth. Some benefits that may be offered include:
Impact on Taxes
In the case of federal income taxes, domestic partners are not given the same benefits as married couples. Usually, a worker whose domestic partner receives benefits must include the benefits’ cost as income. This means that a worker would have to pay taxes on premiums paid for benefits, plus the amount the employer contributed. In some cases, the Internal Revenue Service defines partners as legal dependents, which results in the taxation being waived. To be considered a legal dependent, one partner would have to derive more than half of his or her support from the other; plus, they must both live in the same household.
Benefits for Employers
It is beneficial for employers to offer domestic partnership benefits to their workers for a number of reasons. For one, employees will be more likely to stay at a supportive company. For another, morale will be higher, which leads to increased productivity. When employee turnover is kept at a minimum, costs are reduced for hiring and retraining. Fairness to all employees, whether they’re married or single, is good for the entire organization.A large number of private businesses, governmental agencies, colleges, and universities extend domestic partnership benefits to their employees. As the numbers of participants grow, there will be changes in rules and benefit plans. To find out more, employers should research specific laws on the books of their respective states.
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