Domestic Partnerships and Employee Benefits

As people find alternative ways of forming a family, the term “domestic partnership” has come into common use. Generally, a domestic partnership refers to people who are unmarried, but who are living together.

The importance of the recognition of a domestic partnership is growing each day. Benefits that used to be exclusively available for married couples are becoming more available to those who live together in a committed relationship, but have not sought government approval through a marriage. Domestic partnerships are recognized by many municipalities, and indeed are endorsed by some in order for the members to obtain insurance and other benefits. A growing number of municipalities also extend insurance coverage and other benefits to those persons who have registered as domestic partners.

Many educational organizations and private employers have also recognized domestic partnerships. Illustrative examples are Harvard and Princeton Universities, CUNY, Disney Corporation, and Apple Computers.

Municipalities such as Seattle and San Francisco, which have extended employee benefits to cohabitants, do so in fulfillment of a specific governmental policy that recognizes domestic partners as spousal equivalents, or because of a broader policy regarding non-discrimination. It makes no difference whether a domestic partnership is made up of opposite or same-sex partners, but there is always a requirement that a bona-fide relationship exists, based on some sort of registration or other documentation.

The argument against enrolling partners of a domestic partnership for health insurance coverage has always been the issue of fraud and substantial financial risk. However, the actual experience of municipalities does not bear out the fears of insurers. Statistics indicate that insurance exposure is not any greater, or claim experience more damaging, when same-sex partners or unmarried opposite-sex couples are covered.

Thus, as non-discrimination policies concerning sexual orientation and preference become more common, the logical concomitant is that insurance benefits will also be provided to members of domestic partnerships. However, in order to provide some stability in establishing the existence of a domestic partner relationship, various requirements should be considered. Businesses should require employees to complete written statements of domestic partnership. These statements should include facts to show that the parties have lived together for a period of time (at least six months), that there is a mutual and exclusive commitment to each other and to each other’s well-being, and that they are financially independent and share common assets, expenses, and debts. Neither party should be married to anyone else, nor may one be a current domestic partner of anyone else. The parties may not be related by a blood relationship that would bar a traditional marriage in that state, and both parties should be over the age of 18. In addition, the domestic partners should be prepared to present and have on file with the employer various documents, including a joint lease or mortgage, utility bills, bank account and/or credit card statements, or a joint checking, savings, or brokerage account statement, all of which are probative evidence of a domestic partner relationship. Another problem that often exists is that the non-employee partner in a domestic partnership may have children. These children, in order to be covered, must also meet certain requirements, including:

1. The children must be under the age of 18 and reside in the household with the employed domestic partner.

2. The employed partner must assume full parental responsibility and control for the children, though not necessarily legal custody.

The non-employee domestic partner should have legal custody of the children, or other legal relationship such as guardianship, adoption, or foster child relationship.

Finally, there should be a way for the employee to terminate health insurance or other coverage upon the termination of the cohabitation relationship. In this case, a simple form stating that the relationship is terminated and that the non-employee partner is no longer to be covered would be sufficient. However, it should be pointed out that it is unknown whether such a cohabitant would be entitled to COBRA benefits if the domestic partnership is terminated. While the COBRA law, in and of itself, does not mention domestic partners, non-discriminatory federal statutes, when read in conjunction with COBRA, might require these benefits to be extended to a non-employee’s cohabitant.

One way of dealing with the COBRA issue would be for the insurance coverage itself to contain provisions that would parallel the COBRA provisions for spouses, thus permitting the non-employee cohabitant to purchase the insurance for a period of three years after the termination of the relationship. All insurance policies should be read carefully to determine whether such provisions exist. If a policy does not contain these provisions, it is likely that upon the termination of the cohabitant relationship, the non-employee spouse will be left without insurance coverage.

It should also be mentioned that in 1995, the Superior Court of Alaska decided the case of Tumeo and Wattum v. The University of Alaska. In this case, the judge opined that, since Alaska has a statute that makes it unlawful for an employer to discriminate against a person because of a person’s marital status, the defendant university was in violation of that statute by not providing health care benefits to cohabitants. (It should be noted that the Alaska Human Rights Act offers broader protection to employees than does Title 7 of the United States Code.) The court reasoned that by providing added health care coverage for married employees, but not for unmarried employees, the University was compensating married employees to a greater extent than it compensated unmarried employees. As a result, the University’s actions fell directly within the discrimination definition based on marital status. The court did consider the fact that same-sex cohabitants could not obtain a valid marriage license in Alaska (or anywhere else in the country at the time). However, after discussing this issue, it was decided that the statute dealt with the status of a person based on whether he was married and not whether particular individuals could marry. In view of that, the court held that the University of Alaska had to provide health insurance to domestic partners. However, it does not seem that this case has been frequently cited by courts of other states. It does appear, however, that this decision is the wave of the future. State laws that ban discrimination based on marital status would seem to bar employers from offering privileges to married employees that they do not offer to unmarried employees who live in a cohabitation relationship, be they opposite-sex or same-sex relationships.