Pros & Cons of Domestic Partner Benefits

by Shala Munroe, Demand Media
    Same-sex partners might seek employment from companies offering domestic partner benefits.

    Same-sex partners might seek employment from companies offering domestic partner benefits.

    Two unmarried, unrelated people in a committed relationship are often considered domestic partners, and in many states, they can register their relationship with the local or state government as a domestic partnership. This gives the couple, whether it's a same-sex or opposite-sex couple, the right to take advantage of domestic-partner benefits offered by employers. These benefits typically include health insurance, dental insurance and unpaid family leave options.

    Pros for Companies

    Employers offering benefits for domestic partners support an employee culture of diversity and social acceptance, which can also be used as a marketing tool for the company. The companies can attract a job candidate who is seeking employment only from employers who offer domestic partner benefits, widening the talent pool. Also, the cost of providing these benefits is low because there are not many employees who need to take advantage of them. According to California's Law 360, most companies should expect only a 1 to 2 percent increase in benefit costs when offering domestic-partner benefits.

    Cons for Companies

    Although the cost of offering domestic partner benefits is low, it's still an increase. Smaller companies who are struggling in a difficult economy might be unable to afford the benefits. Depending on the health issues of the domestic partners enrolled in the plan, your insurance premiums could increase as the policy is used more frequently. Also, it's sometimes hard to define a domestic-partner relationship, especially if your state doesn't have a registration process at the state level. Providing benefits to some people but not to all — such as to same-sex partners but not opposite-sex partners, or vice versa — could lead to discrimination lawsuits, even if you are following the law about providing employee benefits. You might win the lawsuit, but you've still lost money paying an attorney.

    Pros for Employees

    Even in states where same-sex marriage is recognized, some same-sex couples choose not to get married until the federal government recognizes the union (or for a variety of other possible reasons). Domestic partnership benefits allow these couples to obtain some important benefits, like shared health insurance plans. This can often extend to the children of a domestic partner, as long as they are considered dependents.

    Cons for Employees

    Taking advantage of domestic-partner benefits also has a downside. If the company pays all or part of the health insurance premiums for your partner, that amount can be added to your income for tax purposes. If you change jobs or move to a new state that doesn't recognize domestic partnerships, you could lose your benefits — including the health insurance that is covering your partner and her dependent children. COBRA insurance coverage doesn't always apply, so it's best to explore the benefit ramifications of a move before you make it.

    Unavailable Benefits

    Some benefits married couples are entitled to cannot be offered to domestic partners. These include the Family Medical Leave Act, which gives employees the right to take unpaid time off to help an ill spouse. However, some companies choose to offer unpaid leave without calling it part of FMLA. Also, pension plans that are designed to transfer to a surviving spouse when the employee dies don't transfer between domestic partners because of the definition of marriage in the Defense of Marriage Act of 1996 (DOMA) — it defines marriage as a union between a man and woman. If the pension plan is private and not a union or multi-corporation plan, the employer can opt to allow the benefits to transfer to domestic partners. Cafeteria plans are designed to function under DOMA's definition as well, keeping domestic partners from sharing pre-tax funds saved for medical expenses. Because this is a tax-related program, it always falls under DOMA's purview without a workaround for the employer. However, in 2011, the U.S. Department of Justice said it did not believe DOMA was constitutional, and there was a bill in the Senate to repeal DOMA. The Respect for Marriage Act was introduced in the House that would allow the federal government to recognize same-sex marriages, but neither move passed by 2012. The issue is hotly contested; even if the federal government recognizes same-sex marriages, individual states might not.

    About the Author

    Based outside Atlanta, Ga., Shala Munroe has been writing and copy editing since 1995. Beginning her career at newspapers such as the "Marietta Daily Journal" and the "Atlanta Business Chronicle," she most recently worked in communications and management for several nonprofit organizations before purchasing a flower shop in 2006. She earned a BA in communications from Jacksonville State University.

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