Are employer fears much ado about nothing’?
Employers reluctant to extend health care coverage to domestic partners often cite a potential increase in claims costs as the main impediment to such a change in benefits policy. But a leading expert says that data from companies that have already covered domestic partners show that such fears are grossly exaggerated.
First of all, says Loralie Van Sluys, research consultant with Hewitt Associates LLC, the Lincolnshire, IL-based employee benefits consulting firm, the number of employees signing up for coverage has been far smaller than anticipated.
Since "conventional wisdom" estimates that about 10% of the population is gay, employers were projecting the same level of participation by employees seeking coverage for their domestic partners. The reality? According to a Hewitt study authored by Van Sluys at the end of 1994, Domestic Partners and Employee Benefits, "Typically, only up to 2% to 3% or less of all employees elect domestic partner coverage at organizations offering the benefit."
According to Van Sluys, that percentage has remained the same since the study. "It’s really a big to-do about nothing," she asserts. "Check out Lotus Corp., which has 2,000 employees; only 14 signed up."
What’s more, Van Sluys emphasizes, domestic partner benefits really aren’t a gay issue. "When it is offered to both same-sex and opposite-sex partners, the vast majority who sign up will be opposite-sex partners," she says.
Van Sluys insists that employers who erroneously fear a heavy sign-up by gay employees, and who further assume this will mean increased AIDS-related health care claim costs, are barking up the wrong tree.
"According to the most recent federal AIDS Cost and Utilization Survey, the average lifetime medical cost of HIV treatment is $119,000 per patient," writes Van Sluys in her report. "By way of comparison, the cost of a kidney transplant can be as high as $200,000, and the cost of premature infant care can run anywhere from $50,000 to $1 million."
One significant change Van Sluys notes since she wrote her study: an increase in the number of companies offering domestic partner benefits. "Our survey said fewer than 150 private companies offered coverage," she says. "Today, it’s gone up to somewhere between 350 and 400. While that’s still relatively minuscule, you could say it’s becoming more accepted, especially with what IBM did, because they are considered more old-line."
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