Poll: Many Will Now Drop Domestic Partner Benefits

Employers move to treat unmarried same-sex and opposite-sex couples equally

By Stephen Miller, CEBS Jul 13, 2015
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revised 8/20/2015

The U.S. Supreme Court’s Obergefell v. Hodges decision on June 26, 2015, which legally recognized same-sex marriages throughout the United States, will affect employer-provided domestic partner benefits for unmarried couples, according to a post-decision survey of U.S. employers by the nonprofit International Foundation of Employee Benefit Plans (IFEBP).

The foundation conducted the survey among its membership, made up of mostly midsize and large U.S. companies, shortly after the ruling was handed down.

Among the surveyed organizations:

38 percent of employees anticipate that the ruling will make benefits administration easier, just under 9 percent said the ruling will make administering benefits more difficult, and 53 percent said things would remain about the same.

More than half (57.4 percent) offered benefits to same-sex domestic partners at the time of the ruling.

While just over 70 percent of companies that provide benefits to same-sex domestic partners said they are likely to continue doing so after the ruling, nearly 30 percent said they are now unlikely to continue providing benefits to same-sex domestic partners.

“In the past, some employers only offered same-sex domestic partner benefits because those couples couldn’t legally marry. Now with the Supreme Court’s decision, these employers may decide to drop domestic partner benefits,” Julie Stich, CEBS, director of research at the IFEBP, told SHRM Online

Almost half of organizations (45.4 percent) offered benefits to opposite-sex domestic partners as well as to same-sex partners at the time of the ruling. The survey provides evidence that when partner benefits were offered to couples irrespective of gender, employers are more likely to maintain them.

Among organizations that offer benefits to unmarried opposite-sex and same-sex domestic partners, more than 80 percent say they are likely to continue providing benefits to domestic partners after the ruling, while just over 17 percent are unlikely to continue providing these benefits.

The survey further revealed the following.

Among the reasons organizations will continue domestic partner benefits (multiple reasons allowed):

We want to retain or attract quality employees (cited by 52.6 percent of organizations likley to continue offering benefits to domestic partners).

We recognize all types of families (cited by 42.3 percent).

We feel it is the right thing to do (cited by 36.1 percent).

Employees are choosing to stay in domestic partnerships and are not marrying (cited by 23.8 percent).

Among the reasons organizations will discontinue same-sex domestic partner benefits:

We provided them in the past because same-sex couples couldn’t legally marry; now they can (cited by 93 percent of organizations likely to discontinue offering benefits to same-sex partners).

Administrative complexities, e.g., documentation, tax issues, payroll issues (cited by 44.2 percent).

Cost issues (cited by 18.6 percent).

Among the reasons organizations will discontinue opposite-sex domestic partner benefits:

We provided them in the past because we also provided benefits for unmarried same-sex domestic partners; with the Supreme Court ruling, we're dropping domestic partner benefits (cited by 70 percent of organizations likely to discontinue offering benefits to opposite-sex partners).

Administrative complexities, e.g., documentation, tax issues, payroll issues (cited by 60 percent).

Cost issues (cited by 20 percent).


Partner Benefits: An Uncertain Future

“Nothing in Obergefell creates rights for unmarried partnerships,” said benefits attorney Todd Solomon, a partner of law firm McDermott Will & Emery LLP, on June 30, when he spoke at the Society for Human Resource Management’s 2015 Annual Conference & Exposition in Las Vegas.

Solomon shared the view that companies offering benefits to unmarried same-sex couples but not to unmarried opposite-sex couples “as a matter of fairness to couples that could not get married” will now likely require marriage as a basis for spousal benefits, typically offering unmarried same-sex couples a grace period of several months to wed. Not doing so, in fact, “could raise the issue of whether opposite-sex unmarried partners are being treated unequally,” he said.

Another possibility Solomon raised: freezing health benefits to unmarried same-sex couples who currently receive them, but not extending these benefits to new hires.

However, if a company offered partner benefits to both unmarried same- and opposite-sex couples, “they’ll be more likely to maintain these benefits,” Solomon concurred.

A lingering and unresolved issue is that “same-sex couples may not be comfortable making an outward expression of their relationship by getting married, especially in states that don’t have anti-discrimination laws covering LGBT individuals,” Solomon noted.


Ending DP Programs

A survey conducted at the end of July 2015 by Dependent Specialists Inc., a provider of dependent verification services, found that most companies providing domestic partner benefits that planned to end their programs intended to wait until plan year 2017 to do so. Specifically, among companies planning to end their domestic partner benefits:

Just 5 percent planned to do so in 2015.

18 percent planned to do so for 2016.

70 percent planned to do so for 2017

7 percent planned to do so for 2018, or do so later.

Companies were planning to notify employees about phasing out domestic partnership benefits as follows:

More than one month advance notice before open enrollment (63.1 percent).

Less than one month advance notice before open enrollment (8.2 percent).

No special advance notice, employees will find out at open enrollment (6.8 percent)

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow Me on Twitter.

Related SHRM Articles:

Marriage Equality Nationwide Changes Benefits Landscape, SHRM Online Benefits, June 2015

Dropping (or Keeping) Domestic-Partner Benefits Has Ramifications, SHRM Online Legal Issues, July 2015

Domestic Partner Benefits: Does federal COBRA apply to domestic partners?, SHRM Templates & Tools, July 2015

Related News Articles and Resources:

After Same-Sex Marriage Ruling, States Reconsider Domestic Partner Benefits, Pew Charitable Trusts, September 2015

The End of Domestic Partner Coverage [infographic], Dependent Specialists Inc., August 2015

Business Impacts of the Supreme Court Marriage Ruling, Ross School of Business at the University of Michigan, July 2015

Fate of Domestic Partner Benefits in Question After Marriage Ruling, New York Times, June 2015

Gay-Marriage Ruling Puts Some Health Benefits at Risk, Bloomberg Business, June 2015

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