"Grossing Up" to End Employment Benefit Inequities

Often I encounter those from out side the LGBT community who ask why same sex couples cannot settle for something less than "marriage" and thereby avoid at least of the culture war assaults from the far right. The question has a few ready answers. First, assuming one is willing to throw away a desires for legal equality, the far right will not readily allow same sex couples to have any recognition whatsoever of their relationships. For example, Virginia's vile Marshall-Newman Amendment bars recognition of anything legal status that tries to approximate the rights of marriage. And Virginia's constitutional amendment is not unique in this regard. Of equal importance is the fact that the word "marriage" triggers so many rights and legal advantages that "civil union" or "domestic partnership" fail to provide. One huge area is in terms of employment benefits and health care insurance coverage in particular - a same sex spouse gets taxed on such coverage whereas a "spouse" does not. Fortunately, a growing number of large companies are taking steps to reduce the inequity by "grossing up" - in simple terms, paying - the tax impact. An article in the New York Times looks at this trend. Here are highlights:
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[A] growing number of companies have taken it upon themselves to make life a little more equal for their gay employees. These companies are reaching into their own pockets to pay for an extra tax that their gay employees owe on their partners’ health insurance — something that their married heterosexual co-workers don’t have to worry about because the federal government recognizes them as an economic unit.
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To gay employees, gaining equal benefits is about more than the money. The gesture itself validates their relationship with their partners at a time when the government has not. Most heterosexuals take for granted that they can add a spouse or children to their employer’s health plan. But gay employees with partners have that option only if they work for an organization that offers domestic partner coverage. And even when the coverage is available, it costs gay couples more because they are taxed on the value of those benefits.
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“It very quickly became a litmus test among employees for how welcoming their firm was,” said Daryl Herrschaft, director of the workplace project at the Human Rights Campaign. “A lot of folks were very proud of their companies and wanted to tell a lot of people, and in doing so, it sparked some competition.”
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The competition has become most apparent in a handful of industries, notably law firms, big consulting companies and in Silicon Valley. More Wall Street firms, meanwhile, are said to be considering the policy.
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[T]t wasn’t until Google started compensating its employees last June that the movement really began to take off. Apple, Facebook, Barclays, McKinsey and Bain & Company are some of the prominent names that followed suit. Even more companies have said they publicly support same-sex marriage or equal financial treatment for gay couples, but they haven’t gone as far as adopting the policy. About 58 percent of Fortune 500 companies extend domestic partner coverage to employees with same-sex partners,

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One of the biggest obstacles to adopting the gross up policy has been concern about the cost and legal implications. Will people rush to sign up? Many firms, for instance, decided to make only same-sex employees with domestic partners eligible since opposite-sex couples have the option to marry.
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Generally, it would cost an employer about $2,000 to $2,500 to gross up an employee who incurred extra taxes of $1,200 to $1,500, according to Joseph S. Adams, a partner at McDermott Will & Emery who specializes in employee benefits. The numbers will vary depending on several factors, including the employee’s tax bracket and state of residence.
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With more companies adopting the more generous policy, others are now looking at whether they’re offering the basics for gay employees. As Cynthia Yeung, a San Francisco resident who is on the steering committee of her employer’s L.G.B.T. group, put it, “When you raise the bar, everyone has to jump a little higher to be average.”