Affirming Domestic Diversity

More charities offer benefits to employees’ unmarried partners

After 13 years, Anne Wright and Eric Segal had been together longer than many married couples. Despite their commitment, they had decided not to tie the knot in solidarity with their gay and lesbian friends, who have long been legally barred from marrying.

In 1999, however, their principles began to catch up with them. That year, Mr. Segal left his job at a nonprofit housing organization to work as a consultant and help raise the couple’s children — a move that cost him his health insurance. The couple paid for a policy for Mr. Segal out of their pockets for two years, but the cost, Ms. Wright says, grew prohibitive.

So she looked to her employer of six years, YouthBuild USA, in Somerville, Mass., a nonprofit group that teaches the building trades to young people from low-income households. The organization had always prided itself on its commitment to diversity, and Ms. Wright, who serves as director of the group’s Affiliated Network Membership Committee, began petitioning her bosses to extend the organization’s health-care benefits to unmarried domestic partners. “It was selfish, but not totally,” she says. “We were also just thinking about the other people in similar situations in the office, and that they should be covered.”

Although she was braced for resistance and controversy, YouthBuild granted her request, offering health-insurance coverage to Mr. Segal and other unmarried partners of employees, including same-sex partners. “Homophobia runs very deep, and even in a wonderful organization like ours, there could have been someone with a fearful attitude,” she says. “I was worried that if we didn’t write [the policy] exactly right, maybe it would get blocked. But it totally sailed through.”

Controversy and Change

YouthBuild’s experiences are similar to those of many nonprofit organizations that attempt to affirm their commitments to diversity — or to offer what has become a prerequisite in a competitive recruiting environment — by extending health-insurance benefits to their workers’ domestic partners.

Such decisions by charities may run into controversy, fueled in part by the wrestling match many states and cities are engaged in over gay and lesbian couples’ right to marry. President Bush last month said he would support a constitutional amendment to prohibit same-sex marriages.

Meanwhile,YouthBuild’s home state, Massachusetts, is working to comply with a November ruling by its top court that said same-sex couples could not be denied legal marriage. And in the last month, officials in a handful of cities and counties in California, New Mexico, New York, and Oregon have begun allowing same-sex marriages, sparking court challenges.

Even with the political debate raging, domestic-partner benefits are now among the fastest-growing benefits for employees, increasing by nearly 50 percent at nonprofit organizations, from 16 percent in 2001 to 23 percent in 2003, and offered by more than one-third of all employers, according to the Society for Human Resource Management, in Alexandria, Va. Domestic-partner benefits are among the top 10 most commonly offered benefits overall, according to the organization.

The Peace Learning Center, a nonprofit group in Indianapolis that provides conflict-management training, started offering benefits to its staff members’ domestic partners in 2002. Its leader, Tim Nation, says the group worried initially about how trustees and potential donors would react, but ultimately felt the move was in line with standards in the for-profit world.

“The more we realized where the corporate world is on the issue, the more we realized it’s a trend,” he says. “It’s another one of the guideposts through the struggle for recognition that many different groups have moved forward on. It fit right into our values, and it wasn’t going to bring undue harm to the organization.”

About two-thirds of employers who cover domestic partners offer the benefit to both same- and opposite-sex partners, according to the Human Rights Campaign, a Washington group that advocates for gay and lesbian civil rights; the rest, the group says, offer the benefit only to their employees’ same-sex partners.

This pattern is also evident among nonprofit employers: Of 151 charities surveyed by The Chronicle in 2002, 32 reported offering health-insurance coverage to their employees’ opposite-sex partners, and 50 said they offer the benefits to their workers’ same-sex partners.

Employers — such as Emory University, in Atlanta, which offers benefits to its employees’ same-sex but not opposite-sex partners — often invoke heterosexual couples’ right to marry as the chief reason for excluding them from the perk.

“The rationale when the decision was made was that opposite-sex partners can legally get married in this country, whereas with same-sex partners, that’s not something that’s available to them at all,” says Mary Smith, Emory’s director of benefits.

How a Trend Grew

The growing acceptance for domestic-partner benefits has happened quickly, and nonprofit organizations have played a big part in the change.

In 1982, the New York newspaper The Village Voice became the first for-profit company to extend health-insurance benefits to the same- and opposite-sex partners of its employees as if they were legally married couples. Shortly after, nonprofit organizations began to follow suit, including the American Civil Liberties Union, which began offering the perk to its employees the following year.

But despite their status as early adopters, charities weren’t as forceful as technology companies in pushing domestic-partner benefits forward. In the late 1990s, it became commonplace for many high-tech employers to offer domestic-partner benefits. Technology workers were in high demand, and many insisted on the perks.

Although an increasing number of charities extend benefits to nontraditional unions, some have decided against such a step.

“We wouldn’t do that at all,” says Glenn Stanton, senior analyst for family and marriage policy with Focus on the Family, in Colorado Springs, Colo., whose goal is to strengthen and support the social and political position of married couples with children. “It’s in opposition to human and social well-being, it’s against our mission, and it’s simply an unwise policy.”

Many nonprofit organizations feel the need to add domestic-partnership benefits, Mr. Stanton says, because “they are motivated by an altruistic attitude that says, ‘Let’s be as inclusive as we can.’ It’s not a pernicious thing, but it’s a very keen misunderstanding of the value that marriage itself plays within the organization, and within society itself.”

Opposition to the Practice

Some religious groups have actively opposed the trend. In 1997, the Southern Baptist Convention called for a boycott of the Walt Disney Company over several of its policies related to homosexuality, including the fact that it offers health insurance to its workers’ same-sex partners.

Nevertheless, even some organizations with strong religious roots, such as Christian Relief Services Charities, an umbrella organization that helps raise money and provide management assistance to a diverse body of grass-roots charities from its central office in Lorton, Va., would be willing to extend its health benefits to domestic partners if its employees requested it — even in the face of opposition from its more traditional donors.

“Some of them might have problems with it, but people have had problems with salaries and benefits in general,” says Paul Krizek, the group’s vice president. “Some people think we should be all-volunteer. The point is, you’re always going to have disgruntled people, but our supporters judge us on the outcome of our program. Being a Christian means dealing with tough issues, but I think discrimination is a mistake, and we need to deal with it.”

In addition to a charity’s mission and employee demands, external pressures can also contribute to a charity’s decision whether to add domestic-partner benefits. Several cities, including San Francisco, Seattle, Berkeley, Calif., and Portland, Me., have adopted policies — some contested in court — that they will only do business with or offer grants to employers that offer domestic-partner benefits.

In San Francisco, such a policy disrupted the city’s relationship with local branches of the Salvation Army and Catholic Charities, neither of which offered the benefits to their employees.

The city eventually reached a compromise with Catholic Charities in which wording of the policy was changed to include any “legally domiciled member” of a household — a phrase the Catholic group found less objectionable. Although the Salvation Army’s governing body voted to allow its regional organizations to offer benefits to workers’ unmarried partners in November 2001, it later reversed its decision.

Charities that have opted for domestic-partner benefits say that donor reaction does not generally play a role in their decision.

“I don’t think that there was a concern that we might lose donors,” says Marilyn Martinson, director of human resources at the Field Museum, in Chicago. “But what I do recall thinking is that I didn’t want to lose the museum’s culture. We’re known as a certain kind of culture and place to work, and if we didn’t look at it and make that kind of decision, we might be taking a step backward rather than forward.”

Adding Up the Costs

One of the reasons the perks spread so quickly is that many organizations have found that the cost of extending the benefits is not significant because a relatively small number of workers enroll.

“We’ve seen consistently that the enrollment-rate increase, even when including opposite-sex partners, has been less than 2 percent, and the additional costs when adding domestic partners has been no greater than adding married partners,” says Andrew Sherman, who works as vice president in the Boston office of the Segal Company, a benefits-consulting group with headquarters in New York that has helped set up domestic-partnership perks for clients.

“Domestic partners, if anything, have been less expensive than including other dependents,” he says. “They’re younger, on average, and they’re less likely to have children.”

Several surveys conducted over the past decade back up Mr. Sherman’s observations.

Lee Badgett, an economics researcher at the University of Massachusetts at Amherst who compiled a study of domestic-partner benefits in 2000, says adding same-sex partners to an employers’ insurance coverage increases enrollment by less than 1 percent, and adding opposite-sex partners increases enrollment by no more than 3 percent. (Opposite-sex partners, observers say, are more likely than same-sex partners to have children and less likely to have two incomes.)

Employers’ insurance costs, Ms. Badgett says, go up by a percentage slightly less than the enrollment increase because employers typically pay a smaller share of the insurance costs for families than for individual employees.

Bringing gay partners into an employer’s health-insurance system does not create a big cost increase in certain kinds of care, contrary to what some employers once feared, says Stephen Blakely, director of communications at the Employee Benefit Research Institute, in Washington.

“Most of the concerns about the expense of HIV [care] are offset by the risks of pregnancy for heterosexual couples, which can be just as expensive, or in the case of a problem pregnancy, even more so,” he says.

The National Collegiate Athletic Association’s experience bears out researchers’ claims that adding domestic-partner coverage doesn’t necessarily translate into drastically increased costs for an employer. When, at the urging of many of its member universities, the 600-employee organization decided last year to add employees’ same-sex partners to its health-insurance coverage, it ran exhaustive budget calculations. The Indianapolis group estimated that the cost would be about $10,000 — out of a total health-care budget of $2.9-million.

“That’s just a pretty insignificant amount,” says Robert Fiala, the association’s managing director of human resources. “At that point, once we had it settled from a cost standpoint, we made the decision [to add the benefit] pretty quickly.”

Small organizations can face harder choices when they choose to add domestic partners, as many insurers are not willing to negotiate on the terms of their small-group plans, and small employers may have trouble offering much beyond basic health care for their own employees. Often, those organizations that are committed to domestic-partnership benefits will just pay for partners on an individual basis.

“We have a broker who handles our coverage, and we put domestic partners in touch with that broker,” says Daphne Powell, human-resources director at the national headquarters of the antihunger group America’s Second Harvest, in Chicago.

The broker, she says, matches up the partner with an insurance provider, and Second Harvest pays the difference between what the charity would pay for a married spouse’s benefits and what the broker offers.

Second Harvest was forced into that situation, she says, because its insurer, which provided a plan tailored for small employers, would not extend the benefit to domestic partners. “We only had about 70 employees, and they just wouldn’t allow us to do it,” Ms. Powell says.

The Henry J. Kaiser Family Foundation, in Menlo Park, Calif., also opted to cover employees’ domestic partners out of its own budget when it couldn’t find an insurance provider to offer such coverage in the late 1990s, says Drew Altman, president of the Henry J. Kaiser Family Foundation. The grant maker found an insurance provider to cover the benefit a year later.

“Our human-resources department initially had some difficulty finding coverage under group policies, so we went it alone,” he says. “It was instantly clear that we wanted to do it, and I certainly feel it’s a plus for us in terms of competition.”

For organizations that are having trouble finding insurers, the San Francisco Human Rights Commission conducted a study in 1998, slated to be updated this spring, of insurance providers that offer domestic-partner coverage, identifying at least four in every state, including companies that will provide group plans for organizations with as few as two employees.

Signing Up

Once an organization chooses how it will pay to expand its insurance benefits, it begins to inform its employees of its availability during annual open-enrollment sessions. Usually, workers who wish to enroll are required to sign an affidavit or fill out a form that certifies they are domestic partners.

“It’s important for nonprofits to attempt to treat gay and lesbian couples as equivalent to married couples,” says Daryl Herrschaft, who tracks benefits for the Human Rights Campaign.

“We encourage employers to try to keep their requirements in line with that respect,” he says. “Remember, for most married couples, they usually just have to check a box.”

Employees do face an additional tax burden when they receive benefits for domestic partners. Federal (and some state) tax regulations do not require married couples to pay taxes on their spouse’s insurance premiums when they are paid by their employers, a break that is not available to unmarried couples.

Thus Jennifer Kates, director of HIV policy at the Kaiser Family Foundation, has an extra $150 taken out of her pay every month in federal taxes because the foundation covers the health insurance of her partner, Susan Noseworthy. “It’s a considerable expense,” Ms. Kates says. “But the amount of benefit we receive far exceeds what I could have purchased for that amount of money on our own. But it is an issue.”

The Human Rights Campaign is backing a bill, introduced in Congress last year by Rep. Jim McDermott, Democrat of Washington, that would repeal those taxes. A similar bill has been introduced in the Senate. “We don’t believe employers should be taxed for supplying what employees need, or that employees should be taxed for supplying health care to a loved one,” Mr. Herrschaft says.

At times, persuading employees to enroll can be a challenge.

The Missouri Historical Society, in St. Louis, has had domestic-partner benefits, covering both same- and opposite-sex relationships, since 1995. But of the 150 people covered by the society’s insurance, only two have signed up in those eight years, according to Melvin Carr, the society’s human-resources director.

“Sometimes I wonder if there’s a concern among people to raise their hand and say, ‘Hey, I’m in a same-sex relationship,’” Mr. Carr says. But, he notes, the list of employees who enroll their domestic partners in the insurance program remains confidential.

The organization originally decided to add the benefit in response to employee demand, he says.

Even with so few workers enrolling in the ensuing years, he says, the society still considers the perks valuable to employees and to the organization. “When I’m talking about benefits, I tell them it’s a benefit a lot of employers don’t have. It makes us look good as an institution that’s liberal, to some extent.”

Getting the recruiting benefits from domestic-partner coverage can also be difficult for an employer, with some job seekers being shy about broaching the subject in an interview.

“Some prospective employees aren’t comfortable asking, but I was used to it,” says Ms. Kates, who said she has requested — and seen offered — domestic-partner benefits from three employers since the early 1990s. It was at her request that the Kaiser Foundation added the benefit, and she says she believes that having that perk is good for an organization because it lets it display its values.

“It sends a message to employees that your family is as valuable to this organization as anybody else’s family,” she says. “At Kaiser, because it was an immediate acceptance and recognition, it sent a message to me as a new employee. It’s completely been met by that same kind of culture my whole time here, which is a great way to feel about where you work.”