President Obama made global headlines when he stated his support for gay marriage. On a more mundane level, same-sex marriage, civil unions and domestic partnerships create a host of questions and considerations related to HR, benefits and general employment laws.
Why would employers want to wade into these questions? For one thing, they have no choice. Even if an employer does not want to offer benefits to employees' same-sex spouses and domestic partners, they must still comply with state laws on the subject, including state laws that recognize same-sex marriage and/or domestic partnerships. Currently, eight states and the District of Columbia treat same-sex marriage the same as any other marriage; five states allow civil unions that offer the same benefits as marriage; four states allow registered domestic partnerships that provide the same general state-law benefits as marriage; and a handful of other states have laws that provide various rights to unmarried couples of any gender.
"Some employers want to offer same-sex and domestic partnership coverage because they think it is fair or because they think it will attract a broader pool of employees, while others don't see this as fitting their business model and they don't want to take on the extra cost," says Cathy Stamm, a consultant with Mercer in Washington, D.C.
When making this decision, employers should be aware of changing attitudes toward same-sex marriage, particularly among younger people. A 2012 Pew Research Center poll found support for same-sex marriage to be highest among younger people—63% of the Millennial generation and 51% of Generation X favor same-sex marriage, compared to 39% of Baby Boomers. An employer that does not offer benefits to same-sex spouses and domestic partners may find itself at a disadvantage when it comes to attracting and retaining younger employees.
In terms of costs, offering benefits to same-sex spouses and domestic partners could increase overall benefit costs. However, from an administrative standpoint, the costs are not likely to be much higher, says Stamm. Whether they answer yes or no to this question, there will be administrative complexity because the employer must comply with certain state laws and how those state laws interact with federal law. These laws can impact a range of benefits administration issues, including COBRA eligibility, insurance regulations, tax issues and so on, depending on which states their operations and employees are located in. "This is an extremely complex issue because it touches so many levels of state and federal law," says Stamm.
Stamm notes that two possible developments could change the issues employers face:
- Congress could vote to repeal the federal Defense of Marriage Act (DOMA), which would help ease some, but not all, conflicts between state laws.
- The outcome of various lawsuits challenging DOMA.
Employers need to understand how various existing laws impact their rights and obligations when it comes to employment matters, retirement plans and health benefits, while also being aware of changes to these laws. Benefits consulting firm Mercer has developed this comprehensive chart of relevant laws.
