Whether the motive is image or ideals, more and more public and private employers are offering domestic partner benefits.

The roots of this go back to 1981 when the city of San Francisco considered legislation to provide benefits to unmarried couples. "Domestic partners" soon became a legal term used by private and public employees to extend benefits to an employee's unmarried partner of the same or opposite sex.

In 1982, the Village Voice in New York City became the first private employer to offer domestic partner benefits. Two years later, the city of Berkeley, Calif., became the first municipal employer to do so. In May 1997, the city of San Francisco began requiring all businesses with municipal contracts to offer same-sex benefits if they offer benefits for married couples.

Today, the number of private employers, nonprofit organizations, and unions in the United States that offer domestic partner benefits to either the homosexual or unmarried heterosexual partners of their employees tops 4,476, including 296 of the Fortune 500 companies. In addition, at least 166 colleges and universities and 130 municipal governments offer such benefits, according to the Human Rights Campaign, a Washington, D.C.-based political organization that supports gay and lesbian rights.

Those defined as domestic partners include same-sex couples and unmarried opposite-sex couples. Benefits offered to domestic partners include the same range of benefits for married couples, including long-term care insurance, group life insurance, and family and bereavement leave. The most commonly offered benefits, though — and the most publicly visible — are health, dental, and vision insurance.

Equality for all?

Private employers are not required to offer health insurance to any employees, including domestic partners. Employers that choose to offer health benefits must follow federal law and state law, when applicable. Health insurance benefits are regulated at the federal level through ERISA, the Employee Retirement Income Security Act.

The 1996 federal Defense of Marriage Act (DOMA) defines marriage specifically as a union between a man and a woman. DOMA gives each state the option of legalizing same-sex marriages and of recognizing same-sex marriages legally performed in other states if they so choose. No state currently recognizes same-sex marriages. Although some cities, such as San Francisco and New York City, allow domestic partners to officially register their relationship with the city, those registries do not constitute legal status as marriage or common law marriage.

In April 2000, Vermont Gov. Howard Dean signed the nation's first "civil union" law, granting gay couples nearly all of the benefits that married couples in the state are allowed (while falling just short of sanctifying the unions as full-fledged marriages). The law, which took effect July 1, 2001, covers taxes, inheritance, and medical decision-making.

However, same-sex partners cannot be treated as spouses for federal tax and employee-benefit purposes, regardless of state law. The IRS has determined that employment-based health benefits for domestic partners or nonspouse cohabitants can be excluded from taxable income only if the recipients are legal spouses or legal dependents.

Additionally, some employers that offer domestic partner benefits exclude coverage for heterosexual couples on the grounds that they have a legal right to get married. But coverage for opposite-sex couples is increasing because of legal challenges and the threat of lawsuits on the grounds that such exclusions are discriminatory.

Insurers dig in their heels

Even as employers are increasingly looking to offer domestic partner benefits, health insurers are resisting selling plans that include such coverage. They fear that an employees gay partner might contract AIDS, an exorbitantly expensive disease to treat. No individual health insurers sell policies with domestic partner benefits. Group health insurers that do offer these benefits often add a 2 percent surcharge to the premiums as a precaution for what they perceive as a higher-risk group of customers.

Insurers also contend that allowing domestic partner benefits would make them targets of fraud if customers tried to add relatives or friends onto their health plans. This is the main reason why many employers that do offer such benefits require detailed sworn statements from same-sex partners that they are in truly eligible, long-lasting relationships.

Conservative opposition

Domestic partner benefits are controversial for another reason. Some conservative groups have vociferously criticized employers that offer such benefits, contending they erode family values.

In June 2000, the Family Research Council, a Washington, D.C., nonprofit, nonpartisan organization that promotes the "traditional family unit and the Judeo-Christian value system upon which it is built," blasted the Big Three automakers — DaimlerChrysler, Ford, and General Motors — for announcing they would offer same-sex benefits, beginning Aug. 1, 2000.

Most gay rights groups, on the other hand, applauded the decision by the Big Three automakers to extend health insurance benefits to the same-sex partners of eligible employees, saying it could set a national precedent that could prompt other companies to step forward with similar programs. The Big Three say that offering domestic partner benefits, including medical, dental, and prescription coverage, is consistent with their commitment to promoting diversity in the workplace.

Image vs. ideals

Despite what often seems to be little employee interest — employees might fear "coming out," and thus refrain from publicly announcing their interest — some employers think offering domestic partner benefits just makes sense. One reason is image, even more so than social ideals.

Employers admit such benefits are a good recruiting tool, and that goes hand-in-hand with image. Job candidates want to work for employers that are considered socially conscious and diverse. The benefits also are important when the labor market is tight and attractive job candidates command better and more generous benefit packages and perks.

According to the Society for Human Resource Management, a national personnel organization based in Alexandria, Va., the top three reasons employers say they don't offer health insurance benefits to domestic partners are:

• Lack of employee interest.

• Concern that benefit costs would rise.

• Moral objections.