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Domestic Partner Benefits

Partners in traditional marriages have long been included in the employee benefits their spouse receives from the company they work for. The U.S. Supreme Court's decision on Obergefell v. Hodges gave same-sex couples across America the same rights and privileges as opposite-sex married couples.

Before Obergefell, some states and companies offered domestic partner benefits to same-sex domestic partners. States also expanded the definition of civil unions, so they resembled marriage. This allowed same-sex couples to put their partners on their employee benefit plans. Domestic partnership placed the long-term partner in the position of the employee's spouse for insurance enrollment purposes.

It would seem that the passage of Obergefell would finally put same-sex couples and heterosexual couples on an equal footing. However, now that same-sex marriage and heterosexual marriage are equal, one group may have fallen through the cracks. Opposite-sex unmarried couples that had been benefiting from domestic partnership benefits may find those benefits gone. Businesses may be abandoning benefits, such as health insurance, for domestic partners.

What Is a "Domestic Partner"?

domestic partnership means two unrelated, unmarried adults in a committed relationship. “Cohabitation," where couples live together without a promise of commitment, is not considered a partnership. Domestic partner relationships arose during the 1980s, so same-sex partners could have some of the same benefits as heterosexual married couples and unmarried heterosexual couples. The Federal government, along with most states, does not recognize domestic partnerships.

In the late 1980s, some insurance companies expanded the eligibility of domestic partnerships so businesses could offer domestic partner benefit plans to employees. An "eligible partner" was:

  • At least 18 years old
  • Not a blood relative
  • In a "committed relationship" with their partner
  • Financially interdependent with their partner

A few states expanded the definition of civil union to include same-sex spouses. A civil union provides most of the benefits of marriage regardless of sexual orientation.

Domestic partners may need to establish their partnership with both the IRS and for human resources to obtain any benefits. Partners may need to supply an affidavit or other documents that support their claim of a committed relationship.

All these compromises protected same-sex partners. No compromises covered opposite-sex partners.

Opposite Sex Domestic Partnerships

In 2019, California Governor Gavin Newsom signed SB30. This law gives domestic partner coverage to all couples regardless of gender. As surprising as it may seem, opposite-sex partners did not have the same rights to benefits as same-sex and married couples. State laws rarely touch on unmarried heterosexual couples' rights.

The only states which have laws giving the qualified beneficiaries of heterosexual domestic partners full protection are:

  • California
  • Connecticut
  • Hawaii (also recognizes civil unions)
  • Nevada
  • Oregon
  • Vermont (also recognizes civil unions)
  • Washington

Colorado, Illinois, and New Jersey still recognize civil unions.

This leaves unmarried heterosexual couples who don't want to get married in a precarious position. Federal law does not require businesses to offer benefits to an unmarried employee's domestic partner. However, companies are scaling back and, in some cases eliminating domestic partner benefits. The rationale is that since same-sex partners can get married, they may apply for spousal benefits. Opposite-sex couples' needs for health insurance plans and health benefits were not mentioned.

Benefits Packages for Domestic Partners

Large and small businesses should consider covering domestic partners among their employees. During economic downturns, people in long-term relationships are unlikely to rush into marriage even to obtain their partner's employee benefits. However, benefit plans, such as health care, improve worker retention and morale, a plus in a tight hiring market.

States which mandate full domestic partnership benefits require equal coverage, including:

  • Life insurance and the ability to list partners as beneficiaries
  • Family Medical Leave Act (FMLA) for same-sex partners and dependent children

Health coverage is the most important benefit for all domestic partners. Medical expenses are costly, enrollment in a health plan is often difficult, and deductibles are always high. Other programs such as COBRA can add to the confusion. Benefits programs are difficult to obtain even with full-time employment. Small businesses and part-time workers may not qualify for coverage.

Domestic Partner Benefits for Tax Purposes

Neither federal tax nor state tax law treats domestic partner benefits as married couple benefits. This is true for same-sex and heterosexual couples. The Internal Revenue Service considers all domestic partner benefits as taxable income, with the only exception being benefits for legal dependents. Federal income tax forms are available for all benefits, and explain which of them are taxable.

See FindLaw's Wages and Benefits section for more employer-focused articles.

For Employers: Legal Help With a Domestic Partner Benefits Issue

Thousands of employers now offer domestic partner benefit plans. These plans should remain in place, even if the laws surrounding them are changing. It can be challenging to know who gets enrollment into which employee benefits, or if federal law and state law are in conflict. It seems like the rules are always changing, and the last thing you want to do is make a mistake with regard to Social Security or domestic partner coverage.

Before you make a costly human resources error,  consider speaking with an expert. An employment law attorney can update you on domestic partner benefit plans and what you need to do to keep your workers insured and satisfied. 

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