Reprint from Annapolis Gazette

In sickness and in health

by Christine Miller Ford
Special to The Gazette

Dec. 19, 2003

Businesses decide whether to provide benefits for domestic partners

When Mark Bray, 44, was looking for a new job, a big factor was whether his new boss would offer health insurance to his partner of nine years, David Schneider.

"It was extremely important and it was one of the things that helped me decide to take this position," said Bray, who became a research manager at Social & Scientific Systems Inc. in Silver Spring nearly two years ago.

Citing their long-term advantages in recruiting and retaining employees, Social & Scientific Systems and other companies say offering domestic partner benefits is a sound business decision. But these businesses remain the exception -- mostly for economic reasons, executives say, though social concerns may play a role, too.

For many other employers, the bottom line is the more immediate bottom line: With medical insurance costs rising significantly each year, even progressive-minded employers are holding off on adding domestic partner benefits. The surge in companies introducing these benefits earlier this decade has slowed to a trickle.

Loretta Rivers, human resource manager for AceComm Corp., a global telecommunications technology company in Gaithersburg, said the continuing telecommunications slump is forcing companies to think long and hard about how they spend every dollar.

"Are any companies putting in a lot of benefits now?" asked Rivers, who took over human resources for AceComm soon after its founding in 1983. "We want to stay current, to offer benefits comparable to our competitors and other companies in our geographic region -- but we can only do what's possible given our bottom line."

In a national survey this year of 500 companies by the Society for Human Resource Management of Alexandria, Va., same-sex domestic partner benefits were offered at 23 percent of responding companies. That's compared with 31 percent that offered opposite-sex domestic partner benefits and other "family-friendly" benefits, such as dependent care flexible spending accounts (71 percent), flex schedules (55 percent) and part-time telecommuting (34 percent).

Tougher economic times may indeed play a role in whether companies extend benefits to domestic partners, agreed Kim I. Mills, education director of the Washington-based Human Rights Campaign, a political watchdog group for homosexual issues.

So far this year, the group has recorded 81 companies or government bodies adding domestic partner benefits nationally. That's about a 1 percent increase from 2002.

"It's still a healthy increase," Mills said, but it does not rival the pace the group saw earlier this decade, when the number of companies, colleges and government agencies adding such coverage jumped by 15 percent (in 2002) and 20 percent (in 2001). Currently, 5,811 employers across the nation offer domestic partner benefits.

Locally, 40 Maryland businesses and four local governments, Montgomery County, Takoma Park, Greenbelt and Baltimore, offer domestic partner benefits despite opposition from critics who say the benefits erode the institution of marriage.

Groups such as the Catholic University-affiliated MarriageWatch, founded to provide information about marriage law issues, actively campaign against extending insurance benefits to domestic partners, gay or not.

"Treating domestic partnerships as the equivalent of marriage undermines the family," said Glen Lavy, a benefits expert with MarriageWatch, who calls such relationships less stable and committed and contends that businesses benefit when they support the traditional family.

Lavy argues that in much of the nation, businesses that add domestic partner benefits do so reluctantly.

"The trend is the result of political coercion," he said. "Employers cannot do business with cities such as San Francisco, Seattle and Los Angeles unless they treat unmarried couples the same as married couples for benefits purposes.

Good for business

However, executives at local companies that recently added domestic partner benefits say political pressure has little to do with the choice. They point to payoffs for the company, including increased employee loyalty and easier recruiting.

Dennis Truskey, vice president of human resources at Calvert Group Inc., a Bethesda investment company, said that although Calvert's insurance carrier does not include domestic partner coverage, Calvert opts to provide the next best thing: a cash equivalent to cover domestic partners' insurance.

"We can't bring them on to our insurance policy but we can determine what the cost is and give them the cash," Truskey said. The cash subsidies cost the company several hundred dollars a month for the one employee who currently receives the benefit.

"It's a pretty simple process. We publicize it so people know it is there," Truskey said. "When there is a need for it, they write a memo to human resources to ask for a domestic partner subsidy."

The company, which has 170 employees, does not insist on verification that the couple, whether homosexual or heterosexual, lives together as domestic partners. "We trust them," he said. The company has found most domestic partners elect to get coverage from their own employers.

Even when the policy goes largely unused, as it does now, Truskey said, Calvert benefits by creating a more devoted workforce.

"The employees get a sense we care for them and trust them and are looking out for them," he said. "Loyalty is hard to come by on both sides these days. You need to demonstrate that you value your employees.

"We want to be recognized as a great place to work, and to do that you've got to go beyond the ordinary. You want to do more. Building loyalty is important. Companies that have more loyal people do better in the long run."

With the current economic climate, employee turnover isn't an issue for most companies, Truskey said. But when the economy improves and other job offers begin floating around again, Truskey said, he believes a track record of offering high-caliber benefits will entice Calvert workers to stay put.

"From the bottom-line perspective, lower turnover is going to result in decreased costs in training and hiring," Truskey said. "When there is turnover, there is a cost there. If you're losing a person, it can cost you from one-half to two-thirds of their salary in costs to recoup.

"And if you get known as an employer of choice, you can decrease your budget for advertising because you get more word of mouth. It also increases your pool of quality applicants."

Bray said he considered several employment opportunities before taking the job at Social & Scientific Systems.

Even though his partner found employment six months after moving here and is no longer on Bray's insurance policy, the fact that Social & Scientific Systems offers such a benefit is important to him, Bray said.

"It was great," he said. "It shows the company really does care for its employees."

For Marriott International Inc. of Bethesda, the decision to add domestic partner insurance evolved naturally, said company spokeswoman Beth McGlasson.

"We work to remain competitive in the hospitality industry and to support our commitment to diversity," McGlasson said. "We felt this was an appropriate benefit enhancement for us."

When Marriott considered adding the benefit, cost did prompt some discussion among workers, she said. But once employees understood that the new expense simply amounted to what the company would spend if a single employee were to marry, little debate ensued. "In short order, this simply became an additional option on our benefits menu," she said.

It's difficult, McGlasson said, to track precisely how the new coverage might boost Marriott's ability to attract new hires and retain workers.

"Our benefit options are very competitive within our industry," McGlasson said. "We don't believe this results from one particular benefit, but rather because of a whole range of factors, including total compensation -- pay and benefits -- as well as our work environment and culture."

Weighing options

As AceComm's new benefits calendar began in October, the company absorbed a considerable increase in medical insurance costs -- to more than $900 per family per month, Rivers said. "We didn't want to ask our employees to contribute more than they already do," she said.

The issue of domestic partner coverage may arise in the spring as the company again considers adjustments to its benefit offerings, Rivers said. If the economy is stronger then, she said, adding new benefits would likely look more appealing.

The company, which has salespeople from New Jersey to Nevada, also has a 15-person office in Quebec, where domestic partner coverage is required by the Canadian universal health care system.

"We've never had any U.S. employee come and ask why we don't offer domestic partner benefits here," Rivers said. Specific suggestions from the company's 118 employees, 78 of whom work in Gaithersburg, traditionally drive additions to the company's benefit offerings.

"We're just introducing paperless paychecks and, like a lot of changes, that's something that came about when someone walked in and said, 'Have you thought about offering this?'" Rivers said. "We've never had anyone inquire about domestic partner benefits. It's definitely something we would look at."

In the human resource group's survey, 2 percent of executives said their businesses were planning to consider domestic partner benefits in the coming year.

That minimal interest across the nation is reflected locally. For whatever reason, domestic-partner benefits are not a must-discuss topic among local businesses these days, said David T. Boddie, vice president of the Montgomery County Chamber of Commerce. The chamber is launching a member survey to determine what issues members want resources devoted to and what issues its workshops should examine, he said.

"Right now we're trying to understand what the needs are," Boddie said. "Domestic partner benefits is one of those economic development issues that I'm sure we'll tackle at some point."

David Miller, owner of Seismic Surveys Inc. of Frederick, said his company, which measures seismic vibrations caused by blasting at mines and construction sites, does not offer domestic partner benefits for its eight employees "regardless, boyfriend or girlfriend or anything."

"For same sex or opposite sex it wouldn't really matter, but right now we're not offering that to individuals if they're not married, basically," Miller said.

He is not opposed to the idea, but said it has not become an issue for his employees, who split their insurance costs 50-50 with the company. "If someone asked for it, we'd have to look into it," Miller said.

Until a livelier economy develops, Rivers of AceComm predicts, many companies will continue with a wait-and-see attitude.

"For a lot of businesses, it's probably not a social issue but a bottom-line issue," she said. "Even progressive-minded companies have to keep in mind the financial health of the organization -- that's what's going to benefit everyone who works there."

Staff Writer C. Benjamin Ford and Capital News Service contributed to this report.