Pros & Cons of Domestic Partner Benefits

Domestic partners are two people who are not married yet share a long-term, committed relationship. Often, these people want to share benefits just as a married couple would. The benefits that domestic partners might share include health insurance, life insurance, family and sick leave and tax benefits. Of course, these benefits are extremely useful to people who choose to remain domestic partners, but they can come at a price for employers.

TL;DR (Too Long; Didn't Read)

Domestic partner benefits provide employees with helpful insurance, tax benefits and leave, but they come with additional costs for employers along with low utilization.

About Domestic Partnerships

There is no federal law regarding domestic partnerships. However, over the last few decades, many states and employers have offered domestic partners some of the same benefits as married couples. From a policy standpoint, domestic partnership helped same-sex couples attain rights similar to their opposite-sex married peers.

In 2015, same-sex marriage became legalized nationwide. Since then, many have voiced concerns that domestic partnership benefits would no longer be available. Some states and businesses have opted to stop offering benefits to domestic partners, but there are still many instances where those benefits are available.

Pros of Domestic Partner Benefits

One of the biggest pros of domestic partnership benefits is that they can help accommodate the changing landscape of modern families. These days, marriage rates are dropping in the U.S. while unmarried cohabitation rates are skyrocketing. An estimated 18 million U.S. adults are choosing to cohabitate as of 2017, a number that has risen 29 percent since 2007.

It’s not just younger people who are choosing cohabitation over marriage. The number of cohabitating adults age 50 and over has risen a whopping 75 percent. Not every couple wants to get married, even if they are committed and happy together. Domestic partner benefits can help ensure that nontraditional couples are covered even if they choose to forgo marriage.

Further, companies who choose to offer domestic partner benefits will have access to top-tier employees who choose domestic partnership over marriage. In today’s economy, any advantage a business can maintain over its competition can make a huge difference in its bottom line. In fact, 77 percent of large employers with more than 10,000 employees offer domestic partner benefits. These employers are committed to finding the best talent available and offering generous benefits to maintain that talent.

Cons of Domestic Partner Benefits

The biggest con of domestic partner benefits is that they could cost a company more money. Employers are not required to offer any benefits, much less those for domestic partners. Companies have to draw the line and cut off benefit coverage somewhere.

Additionally, there is always a concern that employees will scam the system by taking advantage of domestic partner benefits without being in serious or committed relationships. However, research shows that very few employees take advantage of domestic partner benefits, with just 1 to 2 percent of eligible employees enrolling. Further, the cost to employers for domestic partner benefits is negligible, adding less than 1 percent to the overall cost of a company benefits program.

Of course, while these numbers sound very small, for some employers, they may add up to a level that hurts the business. Each employer has to figure out what is right for its individual business.

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