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Domestic Partner Benefits

The term "domestic partner benefits" refers to employee benefit plans that offer to non-married couples the same or similar benefits as those provided to married couples. Prior to the U.S. Supreme Court ruling protecting the marriage rights of same-sex couples, employers increasily offered benefit plans that covered the unmarried partners of employees. While domestic partner benefits are less popular in the wake of the Court's landmark ruling, they are still offered for those in committed relationships who choose not to get married. The rules that govern those benefit plans are not uniform, so make sure you fully understand the terms before signing on.

Below is a discussion of domestic partner benefits and related legal issues. See FindLaw's Wages and Benefits section for more employer-focused articles.

Who is a "Domestic Partner"?

A domestic partnership is usually understood to mean two unrelated, unmarried adults who share the same household.  In order to qualify for domestic partner benefits, an employee may need to demonstrate that his or her "eligible partner" meets certain criteria set by the employer. 

The definition used in many domestic partner benefit plans defines an "eligible partner" as someone:

  • At least eighteen years old;
  • Not related more closely than would be allowed for a legal marriage under state law;
  • Sharing a "committed relationship";
  • In an exclusive relationship with his or her partner; and
  • Financially interdependent with his or her partner.

Participation in domestic partner benefit plans is often limited to those in a relationship that is considered "committed" -- a term that is defined in many different ways. Some states and cities allow domestic partners to register their partnership. This registration, while not carrying the same legal status as marriage, is sometimes made a condition of participation in a benefit plan. Other plans require a waiting period of six months to one year before a partner will be eligible to enroll in the benefits plan. 

What Benefits are Covered?

Many domestic partner benefit plans offer only minimal, low-cost benefits.  Examples of these benefits include:

  • Sick leave;
  • Relocation expenses;
  • Access to company property; and
  • Permission to attend company functions. 

The benefit of greatest importance to most employees is health insurance. Many employers hesitate to extend such benefits to domestic partners unless they are required to do so, for fear that the cost will be too high. Studies have shown, however, that the increased cost of adding domestic partner coverage to a health insurance plan is less than many employers may expect. This is because participation in domestic partner benefit plans tends to be low, and those employees who do participate tend to be younger and healthier. Furthermore, for same-sex domestic partnerships, there is less risk that a health insurance plan will have to cover the high costs of pregnancy and childbirth. 

Tax Consequences

Federal income tax laws do not treat domestic partner benefits the same as benefits offered to married couples. Ordinarily, an employee whose partner receives domestic partner benefits must include the cost of those benefits as taxable income. This means that the employee must pay tax not only on the premium paid for the benefits, but must include the portion of the cost of the benefits paid by the employer as taxable income. The exception is for partners who are legal dependents, as defined by the Internal Revenue Service. In order to be a legal dependent, a partner must live in the same household as the employee, and must receive over half of his or her support from the employee. 

For Employers: Legal Help with a Domestic Partner Benefits Issue

Thousands of employers now offer domestic partner benefit plans, and as these plans become more popular, the rules and rights under them will continue to change and evolve. An employment law attorney will be able to give you current advice on domestic partner benefit plans, and your obligations as an employer under such a plan.

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