Domestic Partners Still Get Short Shrift

Yes, large corporations are broadening their benefits policies, but in the small-business community, there has been little progress

By Pamela Mendels

A lot of studies cross my desk, including one that touches on the matter of employer-sponsored benefits for "domestic partners," the catch-all phrase that most commonly refers to gay couples. A Hewitt Associates study released late last year found that 22% of employers offered domestic-partner benefits, most typically health-care coverage. It's a big jump from the 10% that reported doing so in 1997.

Since Hewitt, a benefits-consulting company based in Lincolnshire, Ill., looks only at companies with more than 1,000 employees, I couldn't help wondering what things are like in smaller outfits. Three recent studies -- one by the Society for Human Resource Management(SHRM), another from Arthur Andersen, and the third put together by the Kaiser Family Foundation and the Health Research and Educational Trust -- helped satisfy my curiosity.

While the figures varied slightly from study to study -- all were completed last year, by the way -- there was one striking similarity: Small employers remain far less likely to offer domestic-partner benefits than larger ones. The SHRM survey, for example, found that 5% of companies with less than 100 employees offer a domestic-partner option, vs. 21% of those with more than 5,000 on their payrolls.

There are two obvious reasons why this is the case, notes Larry Levitt, a Kaiser vice-president. The first is that the prohibitive cost of health-care coverage means fewer small companies can afford to offer it to employees, let alone to their workers families or partners. The second is that it often takes the clout of a large corporation to negotiate successfully with insurance companies.


  Kim Mills, education director of the Washington-based Human Rights Campaign, a gay-advocacy group, agrees with those explanations, but also suspects another factor may come into play: Business owners could be making some incorrect assumptions. Says Mills: "There's probably a tendency in small businesses to think 'Oh well, we don't have gay employees here so we don't need this.'"

This leads me to a fourth reason I would add to the list: While homosexuality is certainly more accepted than it was a generation ago, the disgraceful hatred of gays still thrives -- undoubtedly why some small-business owners decline to offer domestic-partner coverage. Similarly, so long as many gay employees remain locked in the workplace closet, they will not be pressing their bosses to change company policies.

I'd like to mention one of the many small employers that, despite everything, has decided to offer domestic-partner benefits. Godbe Corp. is 25-person advertising-and-opinion research company in Half Moon Bay, Calif. Like many small companies, Godbe can cover only its employees' health care, says Operations Manager Linda Walsh. What it can do -- and has done -- is make participation in the medical plan available to family members, conventional or otherwise. That means they get access to group rates lower than those charged for individual plans.


  There was an element of pragmatism in Godbe's decision to extend benefits. The company operates in Northern California's tight labor market, so domestic-partner plans seemed an inexpensive way to help it to stand out from the pack. Explains Walsh: "We need to provide as many benefits as we can so we look good to prospective employees."

There was something else going on, too. The company does not make assumptions about the sexual orientations of its employees and wants to treat all workers equally. So far, says Walsh, no one has asked for domestic-partner coverage. But with the plan there if needed, she is quick to add, "It shows you care about employees. And, personally, we want to be fair."

Pamela Mendels is based in New York City. She wrote about small business and had a workplace advice column at Newsday, and has written about workplace matters for BusinessWeek, Working Woman, and the Web site iGuide.

Before it's here, it's on the Bloomberg Terminal.