Conservative IBM ups the ante in domestic partners' benefits
January 1, 1997
Conservative IBM ups the ante in domestic partners’ benefits
More companies expected to follow growing trend
When three-piece, buttoned-down IBM Corp. announced last fall that it was extending full health care benefits to same-sex domestic partners, it dramatically changed the landscape of the employee benefits scene in the United States.
In fact, if you’re pushing for such a change in your own company, your task has probably just gotten a whole lot easier. Rather than an exotic concept adopted by a few unorthodox companies, domestic partner benefits now seem much more the norm.
"It was really significant and important that it got the [media] attention it did," says Beth Fortmueller, benefits manager at Seattle-based biotech firm Immunex Corp., which has offered same-sex and opposite-sex partners’ benefits since August 1995. "Not only because IBM is such a large company, but because it has historically been viewed as one of the most conservative."
IBM, based in Armonk, NY, announced in late September that domestic partners of the same sex would be offered coverage in the open enrollment period that began on Oct. 31 for calendar year 1997. The benefits are exactly the same as IBM provides for spouses of its 110,000 U.S. employees.
Ken McDonnell, MA, research analyst for the Washington, DC-based Employee Benefits Research Institute, agrees that IBM’s move had major import in the benefits field. "Because it was IBM, it gives this trend the ability to branch out into other industries. IBM is seen as mainstream and conservative dark blue suit . . . tie. Previously you had companies like Levi Strauss, which is based in San Francisco, and people would say, Oh, well, what do you expect?’"
However, Melinda McMullen, IBM’s director of corporate and government affairs, sees the new policy as neither unusual for IBM nor earth-shaking for American industry.
"Since the 1950s we have had a vigorous policy of nondiscrimination. We were the first major corporation in the country to include reference to sexual orientation in our equal opportunity policy," she says.
A number of other companies have "come on line" to offer the same benefit in 1996, she notes, including Eastman Kodak, Hewlett-Packard, Microsoft, NYNEX, and the Walt Disney Co. "I look at it as more like an evolution; it’s something businesses must do to remain competitive," she says.
Observers agree that extending benefits to same-sex domestic partners has come to be viewed by its proponents as a simple matter of fairness. "Our main reason [for providing partner benefits] would be to ensure our programs are aligned so that all employees have fair and equal access to the same benefits," says McMullen.
"I really think it’s an equity issue," Fortmueller adds, noting that the elimination of benefit inequities has a positive impact on the mental and physical health of employees. "A lot of health promotion professionals believe that stress from discrimination has a negative effect on health," she explains.
In fact, existing company policies against discrimination can be used to justify extension of benefits to same-sex domestic partners, says McDonnell. "Some companies include in their corporate philosophy the fact that they don’t discriminate on the basis of sex," he notes. "Employees might well point out that based on that issue alone, there’s no reason why the company should not extend benefits to domestic partners." This can also be applied to such benefits as family leave or bereavement leave.
And then there’s competition . . .
The IBM move, as well as many similar recent announcements, also was seen as a prerequisite in the ongoing struggle to recruit and retain the most talented employees.
"Many of the positive comments we have gotten on the policy have come from people who are married," says Fortmueller. "They’re very proud to be part of such an organization."
IBM’s move was, in part, recognition of a business reality: that many high-tech companies are already providing such benefits. "All employers want to attract and retain the most talented employees," Fortmueller adds. "High-tech firms have been trailblazers; it was a wise decision on IBM’s part, and I applaud them for it."
McDonnell agrees. "The IBM move does need to be viewed in [the] context of the industry they are in. When [coverage for] domestic partners really got going in the early ’90s, it was technology companies like Lotus that led the way." Other companies like Apple and Microsoft "all said they did it to stay competitive," he asserts.
Even among companies that have decided to extend coverage to same-sex domestic partners, there is a divergence of opinion as to whether they should include all domestic partners. Some companies have extended benefits to same-sex partners only, reasoning that opposite-sex domestic partners have the option of getting married if they want coverage. Other companies say covering all domestic partners is most fair.
"My guess is that it’s about 50-50," says McDonnell. For example, while IBM covers only same-sex partners, Immunex covers all domestic partners.
There can be some added danger in only extending benefits to same-sex partners, McDonnell notes. "When Lotus just offered coverage to gay partners, their e-mail crashed," due to in-house response on the part of heterosexual employees, he recalls.
If you don’t extend benefits to all domestic partners, you might also be creating a potential legal problem. "If your company’s philosophy states that it doesn’t discriminate on the basis of sexual orientation, an employee might find grounds to challenge your decision under ERISA [the Employee Retirement Income and Security Act]," McDonnell warns.
But for Fortmueller, the decision to cover all domestic partners was simply "a business issue." The input from Immunex employees, she notes, supported providing benefits for both same-sex and opposite-sex partners. "The research our department conducted prior to enacting our own policy indicated that about two-thirds of domestic partners seeking coverage would be heterosexual when both types of partnerships were offered coverage," she adds. (For more statistics on participation rates and benefit costs of domestic partner coverage, see the related story, below.)
The "proof of partnership" requirements vary from one company to another. At IBM, for example, couples must submit a notarized, signed affidavit that shows they have the same residence, and that they are emotionally and financially interdependent. They must also affirm that they are in a committed relationship and that they intend to be in that relationship indefinitely.
Immunex provides employees with a customized domestic partner enrollment form to complete. (See sample inserted in this issue.)
No longer industry-specific?
The trend toward domestic partner coverage is growing, say experts, and in the future it may not be so visibly clustered in specific industries.
McDonnell, for example, sees the trend spreading to new industries, and to more companies with a "conservative" reputation. For instance, it was recently added to the benefits package for GM’s Canadian employees during union contract negotiations.
If major companies outside the high-tech field do begin adding domestic partner benefits, it will only accelerate their acceptance, Fortmueller predicts. "Every time you have well-known, respected companies adding this benefit, it just moves it closer towards becoming a more standard benefit. Fortune 500 companies are looked to by business leaders as trend setters, so what they do definitely has a disproportionate effect."
[Editor’s note: For more information about domestic partner benefits, contact Beth Fortmueller at: Immunex Corp., 51 University St., Seattle, WA 98101-2936. Telephone: (206) 587-0430. Fax: (206) 587-0608. Internet: www.immunex.com.]
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