Sharing benefits in an unmarried relationship
Not married? Your partner's health insurance
may cover you anyway.
Thank the gay rights movement for successfully driving a workplace
trend toward domestic-partner benefits that's improving the lives of many committed
couples, regardless of sexual orientation or marital status.
At the end of 2002, about 40 percent of Fortune 500 companies
along with 6,000 other, smaller businesses, organizations and educational and
government entities were offering the same level of health coverage eligibility
to live-in companions of employees as they were to workers' spouses, according
to a study by the Human Rights Campaign Foundation.
True, the number of companies involved is relatively small, but
some very large employers -- the Big Three automakers, for example -- are part
of the shift. The number of individuals affected also is limited. But the unmarried-couple
count is rising and many of these households include children who could be important
beneficiaries of domestic-partner insurance.
"This whole idea of Ozzie and Harriet and the kids as the
American standard is just not borne out by reality,'' said Kim Mills, education
director for the Human Rights Campaign.
If your company is among those offering domestic partner
benefits, here are some things to consider before you sign up.
Read the rules
In general, companies require that the partner be 18 or older, not related to
the employee by blood nor married to someone else. The couple must live in the
same permanent residence in an exclusive, emotionally committed, financially
responsible relationship, similar to marriage. You may be required to prove
this by showing that you share a lease or a mortgage, an insurance policy, utility
bills, a joint checking account, etc.
Take taxes into account
While the Internal Revenue Service allows the cost of health
benefits for married spouses and their dependents to be tax deductible, it has
not yet granted the same rights to unmarried couples. So the amount of money
that the employer pays for health insurance for an unmarried partner and any
children will be included as taxable income on the employee's W-2.
Some insurers may not agree
While an employer may be willing to pay for these benefits,
not all of the insurers whose plans are available to an employee may concur.
Some insurers have been fearful that domestic partner benefits will drive up
costs. It's possible, for instance, that the less-expensive HMO may demur, while
the more expensive Preferred Provider Organization (PPO) or the traditional
indemnity plan will be more liberal, notes Alex Wender, director of Deloitte
& Touche's Tri-State Human Capital Advisory Services practice. If you have
questions, Wender suggests talking to your human resources department or calling
the insurer directly.
Share the power
Just because you're the partner holding the policy, that
doesn't mean you can make any health care decisions for your partner if he or
she is unable to make them. Spouses have much broader rights. A simple legal
document called a health care power of attorney can overcome what could be a
big issue in an emergency. A health care power of attorney has nothing to do
with money. It simply allows the person you designate -- in this case, your
partner -- to make medical decisions on your behalf if you are unable. It also
can ensure that should you become ill, your partner will be able to visit while
you're in the hospital, says family law attorney Maria Gonzalez.
While Gonzalez, a partner in the Florida firm of Young, Berman,
Karpf & Gonzalez, recommends getting an attorney to draw up this document,
simple forms are available on the Internet. They require signatures of two people
other than the person receiving the health care power of attorney and the person
giving it. The procedure is straightforward and simple: "I, Mary, designate
Joe to make my medical decisions if the doctor decides I'm unable to do so."
The document also can specify the names of physicians and limit the use of life-extending
procedures, but it doesn't have to be that complicated. Keep the completed document
someplace other than a safety deposit box because that could be inaccessible
when you need it most.
When it's over, it's over
Most policies require that the employee let the company know
right away if their living situation changes. A recent federal court decision
left open the possibility that COBRA could cover domestic partners, saying that
COBRA regulations that allow a divorcing spouse to keep the estranged spouse's
insurance for up to 18 months didn't specifically exclude domestic partners.
(COBRA is an acronym for Consolidated Omnibus Budget Reconciliation Act, federal
legislation that requires many businesses to keep former employees and their
dependents on the group health plan for a limited period as long as the ex-employee
pays the premiums.) But right now, the likelihood that an unmarried partner
will be able to claim COBRA is slim, Deloitte & Touche's Wender says. That
means that the spouse without his or her own insurance could be left high and
dry with little or no notice.
For this reason, Gonzalez recommends that partners draw up a domestic
partner agreement that includes what will happen to the insurance if the relationship
ends. The agreement should include a procedure for notification and a time frame
for the partner losing benefits to make other arrangements. "This becomes
a binding contract and if the person providing the insurance ignores it, the
partner could sue for breach of contract," she says.
A partner can help long-term, too
Health insurance isn't the only benefit available to domestic
partners. While long-term
care insurers have offered discounts to spouses for years, some are starting
to extend long-term care discounts to committed partners as long as they share
Long-term care insurers will not only insure homosexual and heterosexual
couples, they'll also consider same or multi-generation family members who are
living together, says Nancy Morith, of N.P. Morith Inc., a long-term care consultant
based in Princeton, N.J.
Morith says insurers are giving discounts to attract clients who
have someone in their lives who is likely to help take care of them. "These
policies reflect the fact in the premium that people in a committed relationship
are less likely to need a nursing home or an assisted living facility, both
of which can be very expensive," Morith says.
Some policies allow a couple to share a pot of money. Others sell
each partner an individual policy but allow them to dip into each other's benefit
if they should need it. These benefits can save committed partners as much as
These long-term care policies generally require that you live
together, but some won't raise the rates if you divorce or split up. Still,
because of the nature of the policies -- you quit paying and the policies lapse
-- Morith says, "It's wise to have an exit strategy."
Jennie L. Phipps is a contributing editor based
-- Posted: Sept. 23, 2003