Employers dropping domestic partner benefits

A growing number of companies are dropping domestic partner benefits in the wake of the U.S. Supreme Court’s rulings to overturn the Defense of Marriage Act in 2013 and allow same-sex couples to marry in 2015.

While 86% of employers provided benefits to same-sex spouses, up from 79% in 2014, domestic partner benefits have fallen, according to a new report from the International Foundation of Employee Benefit Plans. Only 31% of 538 surveyed employers are providing benefits to same-sex partners in civil unions, down from 51% in 2014, and less than half (48%) are providing benefits to same-sex domestic partners, down from 59% in 2014.

Delta Airlines, IBM and Verizon are among the companies that have dropped domestic partner benefits, replacing it with spousal coverage, since the Court’s ruling.

IFEBP says eliminating such benefits solves an administrative headache for many employers, particularly cutting down on complexities for small and mid-sized employers.

“Domestic partner benefits can be complex to manage, and by offering consistent coverage for opposite-sex and same-sex couples, employers are able to ease some of the administrative burden,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefit Plans.

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Still, a little more than three-quarters of large companies with 10,000 or more employees continue to offer domestic partner benefits. Stich says these companies are capable of dealing with the administration burden and might feel that those benefits are a good attraction and retention tool.

“It’s just kind of a company culture,” Stich says.

Of the companies that continue to provide benefits to unmarried same-sex domestic partners or those in civil unions, 60% said that they want to recognize all types of families while 47% feel it is the right thing to do.

Twenty-eight percent of employers offering benefits to those populations said that they still have employees who are staying in domestic partnerships and civil unions rather than getting married, according to the report.

“Some companies have still decided to keep them from a philosophical reason,” Stich says. “[Employers say] we have no right to dictate what a couple wants to do.”