Lotus Opens A Door For Gay Partners

Four years ago, software engineer Margie Bleichman asked her employer, Lotus Development Corp., to provide health insurance for her longtime companion--another woman. Its answer was "a polite rejection." Others asked the same question. Same answer. "None of us was surprised," admits Polly Laurelchild, a senior communications assistant. "You don't expect to walk into a company and get this" benefit.

They do now. In September, the Cambridge (Mass.) software maker quietly told homosexual employees it would offer their partners the same insurance and other benefits accorded heterosexual spouses. "This is fair and equal," says Russell J. Campanello, vice-president for human resources.

RAW NERVE. Gay and lesbian leaders hailed the action, the first of its kind by a major public company, as a milestone. "I've gotten so many calls on this, you wouldn't believe it," says Mary Bonauto, an attorney with GLAD, a Boston group that represents homosexual plaintiffs. And, Lotus managers say, 80 other companies have called asking for details.

Clearly, Lotus' new policy has touched a nerve. The issue of discrimination against homosexual workers has become an acrimonious one, as gay groups target the workplace as a setting ripe for change. In the past year alone, a dismissed Shell Oil Co. executive won $5.3 million after a court ruled he had been terminated illegally for being gay. (Shell, which claims he was fired for other reasons, is appealing.) Gay-rights groups, together with the city of New York, have publicly battled the Cracker Barrel Old Country Store Inc. chain for firing gay restaurant workers. And the city of San Francisco forced General Motors Corp. to withdraw an internal marketing video in which a customer described Japanese pickups as "little faggot trucks."

But while fighting dismissals and campaigning for a tolerant workplace remain key concerns, many gays have isolated a more tangible demand: insurance coverage and other corporate benefits for partners (table). These aren't perks most human resource managers will grant easily. Before Lotus, only a dozen private employers had done so, mostly nonprofit institutions.

Some companies fear violating admittedly arcane laws prohibiting homosexual acts. But for others, the issue is simple economics, as corporations aggressively seek to stem rising health care expenses. "The last thing an employer wants now is to add another group of dependents," says Marie R. Dufresne, a senior vice-president at Philadelphia consultant Hay/Huggins Co.

But the liability may not be that large, if Lotus' experience is any indication. So far, only 12 of an estimated 310 gay employees (10% of the 3,100-person domestic work force) have applied for partner benefits. Of course, the policy is still very new, but the demand mirrors the experience of the few employers that offer similar benefits. When the city of Seattle instituted health coverage for homo- and heterosexual partners in 1990, it budgeted $ 430,000, assuming 300 workers would sign up; to date, fewer than 200 have, costing the city $225,000. Some workers still opt not to identify themselves as gay, even confidentially; others have partners who are insured elsewhere.

Not that Lotus' decision came easily. In 1989, Bleichman, Laurelchild, and co-worker AnnD Canavan began petitioning Lotus for spousal benefits. Even after Lotus agreed, it took the company and the three employees two years to develop a workable policy. The insurance carrier that pays Lotus' claims above $140,000 was reluctant to take on homosexual enrollees -- largely for fear of enormous AIDS bills. Lotus convinced the carrier that the cost of caring for AIDS victims was "not a seven-digit dollar issue," but about the same as treating a coronary, says Campanello.

The company is spending about $30,000 in annual premiums to insure the 12 "spousal equivalents"--none of it tax-deductible, since the Internal Revenue Service doesn't recognize unmarried partners. Lotus had to create a separate insurance plan for the couples; participating employees pay about $1,350 in taxes a year on the premium's benefit.

PRIVATE ISSUE. To be eligible, a couple must live together and share financial obligations. If they break up, the employee must wait one year before registering a new partner. Besides health coverage, the policy's benefits include life insurance (the employee pays the premium), relocation expenses, bereavement leave, and a death benefit. Lotus chose not to offer the same benefits to unmarried partners of heterosexual employees, as do a few employers such as Ben & Jerry's Homemade Inc. and The Village Voice. Its reasoning:

Straight couples have the option of marriage, while homosexual colleagues don't.

Lotus' announcement has thrown into the public arena what was, until recently, a private issue. Gay-rights advocates estimate that only one homosexual employee in 10 reveals his or her sexual preference in the workplace. Even at progressive employers, "most people don't want to come out," says Bennet Marks, a software engineer and founder of Apple Lambda, a gay employee group at Apple Computer Inc. Most companies do not provide gay and lesbian employee groups with any support or financial assistance. Levi Strauss and Apple are among the few that specifically ban discrimination against gays; just 20% of companies with strong equal-opportunity policies explicitly cite sexual preference. Even Corning Inc., an award-winning leader in training employees to recognize racial and gender diversity, admits it hasn't made any effort to address homosexual workers.

But many companies are considering gay benefits in the context of a larger concern: A rising percentage of workers--unmarried couples, divorced people, single parents--doesn't fit into conventional benefits packages. At Digital Equipment Corp., "we're looking at the issue of redefining the family," says Susan Aaronson, U. S. manager of diversity. Skirting the issue of homosexual rights is also a safer course, since public prejudice against gays remains highly vocal. Religious fundamentalist groups criticized Digital when it included sexual preference in its 1987 antidiscrimination statement. American Telephone & Telegraph Co. says it got thousands of critical letters after sponsoring an internal "Gay Awareness Week" last June.

Lotus, however, has suffered little backlash. Of 300 letters received about its new benefits policy, it says, 80% have been positive. Some writers have even promised to buy more Lotus software. That's the sort of social change a company can easily accept.


AT&T A lesbian is suing for pension benefits she says are owed upon the death of her partner, a former AT&T manager. Company argues payment is only available to widows or widowers

USAIR A Boston-based flight attendant has filed a union grievance, demanding free-travel perks for his partner. Company says only legally married spouses are eligible

LOTUS Three employees seek health coverage for gay partners. After two years, company forms policy

UNIVERSITY OF SOUTHERN MAINE An arbitration hearing dismissed a nursing school professor's claim for health insurance for her lesbian partner. USM had refused coverage, despite policy that forbids discrimination based on sexual orientation DATA: BW

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