Same Sex Benefits: Where Ibm Goes, Others May Follow

It sees the stategy as a low-cost way to draw top talent

Five years ago, it would have rocked America's corporate Richter scale. But when IBM announced on Sept. 19 that it would extend medical benefits to its employees' same-sex partners--treating them, in essence, as spouses--the news produced nary a rattle.

True, Big Blue was merely following the lead of its high-tech peers. Lotus Development Corp. was the first major employer to offer spousal benefits to gay and lesbian live-ins, in 1991. And the revolution was old news at Apple, Hewlett-Packard, and Oracle by the time IBM, which bought Lotus two years ago, adopted the policy.

Still, when such an Establishment icon buys in, can the rest of America be far behind? "The airlines are all studying it now," says an excited Elizabeth Birch, executive director of the Human Rights Campaign, a Washington-based gay political group. Although only 2% of America's publicly traded companies now extend benefits to gay and lesbian live-ins, the movement is growing. Employers in industries as diverse as telecommunications and chemicals are revamping benefits plans to include gays. Even Coors Brewing Co., whose founding family was long associated with right-wing politics, extended its coverage a year and a half ago.

GOODWILL GESTURE. Employers are changing policies because they need every edge in attracting and retaining all of the best workers. "In terms of business competitiveness, it made sense for us," says an IBM spokesperson. The gesture can also generate goodwill among employees and consumers. "In some ways, a little goes a long way with us. Even a partial response to us gains a lot of loyalty and respect," says Scott W. Walton, executive director of Digital Queers, a network of gays, lesbians, bisexuals, and transsexuals working in high tech.

Gender-blind benefits policies also don't cost much. IBM expects less than 1% of its workforce to register. That's partly because many partners already have other jobs, with benefits. Others prefer to keep their sex lives under wraps. Studies by Hewitt Associates, a human resources consulting firm, show that despite the AIDS epidemic, gay partners file for about the same number of claims as traditional spouses. They also have far fewer babies, greatly reducing a major medical expense.

So far, high-tech companies, where the bidding for so-called knowledge workers is the most intense, have led the way in offering same-sex benefits. Media and entertainment companies such as Disney, MGM, Sony Pictures, and The New York Times are joining the trend. To be sure, big industrial unions aren't yet mobilizing. "It's an issue that hasn't come up at a bargaining table, as far as I know," says an official at the United Steelworkers, which handles some 6,000 contracts. But with the wave of mergers and acquisitions, benefits policies can leapfrog into unexpected places. Indeed, IBM officials acknowledge that the 1994 Lotus acquisition, along with high-tech peer pressure, helped to push Big Blue toward its benefits shift. Fox and ABC offer same-sex benefits, and if CBS and NBC feel pressure to follow suit, activists hope it will build on their industrial parents, Westinghouse and General Electric.

Even in deeply conservative regions, resistance is waning. Three years ago, Williamson County in Texas blocked Apple Computer Co.'s proposed plant, objecting to its same-sex benefits policy. But after job-hungry state politicians twisted some arms, the resistance ebbed and Apple moved in. More recently, Walt Disney Co. stared down a threatened consumer boycott on the issue.

Of course, even after deciding to embrace new policies, human resource pros have to wrestle with some prickly issues, from how to certify relationships to whether the policy covers a partner's dependent children. Then there's the question of offering benefits to heterosexual live-in partners. IBM limits it to same-sex couples, reasoning that men and women can marry. Other companies, such as Levi Strauss & Co., offer benefits regardless of gender. This pleases more employees, but raises the cost. While only 1% of Levi's U.S. workforce signed up their partners, two-thirds of those who did were straight.

The considerable irony in all this is that President Clinton just signed legislation banning gay marriages. Politicians may condemn gay unions, but more and more companies are quietly moving to institutionalize them.

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