Domestic partner benefit plans are employee benefit plans offered by some private companies and some government employers to couples who are not married. They may provide the same or many of the same employment benefits that married couples enjoy.
These benefit plans are not becoming more common for the reason that same-sex marriage is now legal in all states in the U.S. However, many couples, not all of them same-sex, still choose to live together without getting married, and they may be interested in domestic partnership benefit plans. The laws that govern them are not uniform throughout the country.
Before the U.S. Supreme Court ruled in the case of Obergefell v. Hodges that the U.S. Constitution protected the fundamental right of same-sex couples to marry, domestic partner benefit plans were first offered to the unmarried partners of employees as a way to compensate for the fact that same-sex marriage was not recognized in some states.
Domestic partner benefits are less popular in the wake of the Obergefell ruling, made in 2015, but they are still offered for those in committed relationships who choose not to get married. The rules governing these plans are not uniform from company to company, so a person thinking of signing wants to fully understand the terms before signing.
Who Qualifies as a Domestic Partner for This Type of Benefit Plan?
Domestic partners are normally two unrelated, unmarried adults who live in the same household and are in a romantic relationship with one another. Some plans limit enrollment to same-sex partners. Other plans may have a waiting period before a partner is allowed to enroll in the plan. The exact criteria for qualifying for this type of plan varies by employer, but some common qualifications include the following:
- The partners must have a “committed relationship;”
- The partners must be related more closely than would be allowed for a legal marriage under the law of the state in which they live;
- The partners are 18 years of age or older;
- The partners must be financially interdependent.
Participation in domestic partner benefit plans is often limited to couples whose relationships are considered “committed.” This term does not have one uniform definition, and then there is the question of how to prove that a couple’s relationship is committed.
Some states and cities have systems that domestic partners can use to register their partnerships. While not offering the same legal status as marriage, sometimes registration is a condition of participation in a domestic partner benefits plan. Other plans require the partners to wait for six months to a year before their partner is eligible to enroll in the benefit plan.
To register a domestic partnership in a state, city, or county that offers registration, usually, a person must fill out an application form from their state’s secretary of state or their city or county clerk’s office.
Both partners may be required to appear in person and present proof of their identity, e.g., a driver’s license and proof of residence. The proof of residence would show that the partners reside at the same address. Of course, a registration fee must be paid, and the partners must sign an affidavit before the clerk or a notary public.
A same-sex partner may want to register or apply for domestic partner benefits if their partner has not made their LGBTQ status known in the workplace. They may be fearful of discrimination or harassment. In this case, it is important to determine if the company has a confidentiality policy that prevents disclosure to managers and co-workers.
What Are the Benefits of a Domestic Partner Benefit Plan?
The benefit that most people are interested in is health insurance. Health insurance can be expensive, so many employers hesitate to extend benefits to domestic partners. They are afraid that it is too expensive. However, this often proves not to be the case because enrollment in the plan is low. Also, there is usually less risk that the plan would have to cover the high costs of pregnancy and childbirth with same-sex couples.
Other common benefits offered include:
- Paid sick leave;
- Company paid relocation expenses;
- Access to company property;
- Permission to attend company functions.
Again, the exact benefits vary from company to company. No law dictates the benefits that such plans must offer.
Are There Any Tax Consequences to the Benefit Plan?
Federal income tax law does not treat domestic partner benefits like benefits offered to married couples. Usually, an employee whose partner receives domestic partner benefits must include those costs of the benefits which the employer pays as taxable income for federal income tax purposes.
It is possible to avoid federal income tax on employer-paid insurance coverage. Federal tax law makes an exception for a domestic partnership that meets these three qualifications as follows:
- The partner of the employee must get 50% or more of their financial support from the employee;
- The partners must share a common residence;
- Both partners must be citizens or legal residents of the United States, Canada, or Mexico.
The government recommends that employees include their unmarried domestic partner in a family plan only if they have a child together or claim the domestic partner as a tax dependent.
Again, since same-sex marriage became legal throughout the U.S., more companies have eliminated their health insurance coverage for domestic partners. They argue that it is simply no longer necessary because same-sex partners can legally get married. Then the same-sex partner is a spouse just like any other spouse of an employee and is entitled to the same benefits.
Again, no federal law requires companies to provide domestic partner benefits, even if they offer benefits to spouses. But some states and municipalities mandate that the same benefits be offered to unmarried couples. In most cases, employees must prove their relationship is a domestic partnership to be eligible. They may do this in a few different ways, as follows:
- Through registration with their local domestic partnership registry;
- With an affidavit certifying that the relationship is a domestic partnership;
- Employing some other type of documentation.
Which States, Counties, and Cities Offer These Plans?
States that do not offer domestic partnership benefit plans to their employees and do not register domestic partners are as follows:
- Alabama;
- Alaska;
- Arkansas;
- Delaware;
- Idaho;
- Kansas;
- Kentucky;
- Mississippi;
- Montana;
- Nebraska;
- New Hampshire;
- North Dakota;
- Oklahoma;
- Rhode Island;
- South Carolina;
- Tennessee;
- Utah;
- West Virginia;
- Wyoming.
A few states offer the benefits and have a registry. They are as follows:
- California;
- Connecticut;
- Hawaii;
- Nevada;
- New Jersey;
- Oregon;
- Vermont
- Washington.
In other states, some cities and counties offer the benefits to their employees and may also provide a domestic partnership registry. For example, in California, various cities and counties offer domestic partnership benefit plans to their employees as follows:
- Alameda County;
- Berkeley;
- Laguna Beach;
- Los Angeles;
- Los Angeles County;
- Marin County;
- Oakland;
- Petaluma;
- Sacramento;
- San Diego;
- San Francisco;
- San Francisco County;
- San Mateo County;
- Santa Cruz;
- Santa Cruz County;
- Ventura County;
- West Hollywood.
The following cities and counties register domestic partnerships:
- Arcata;
- Berkeley;
- Cathedral City;
- Davis;
- Laguna Beach;
- Long Beach;
- Los Angeles;
- Los Angeles County;
- Oakland;
- Palo Alto;
- Sacramento;
- San Francisco;
- Santa Barbara County;
- West Hollywood.
In most states, the number of cities and counties that offer domestic partnership benefit plans is much more limited than in California.
Should I Consult an Attorney about Domestic Partner Benefit Plans?
Fewer employers are offering benefit plans to domestic partners because same-sex marriage is now legal. In addition, the eligibility rules can change. Your employer should be willing to explain their benefit offerings to you.
If you have an issue, you want to consult an employment lawyer for advice on how to resolve the problem.
