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Response to Massachusetts SJC Ruling

Debra Neiman was interviewed on Business 1060 WBIX AM Radio, USA Today, Investment News, and the Cape Cod Times to talk about the financial implications of the Massachusetts Supreme Juducial Court's landmark ruling on November 18, 2003 which grants same-sex couples the right to marry.

Here is the article that appeared on the front page of the Sunday, November 23, 2003 edition of the Cape Cod Times:

Cape companies out in front on partner benefits

The gay marriage ruling will have little effect on many businesses that already ensure equal access.



Tuesday's decision by the Massachusetts high court paving the way for gay and lesbian marriages rattled the political landscape, from Beacon Hill to Capitol Hill to the presidential campaign trail.

But the news barely registered in many quarters of the corporate sector, including those on the Cape.

In recent years, employers have quietly been reshaping human resources policies to give unmarried employees in long-term relationships access to the same benefits packages their married co-workers enjoy. The court's ruling, which compels the state Legislature to establish an avenue for gay and lesbian couples to marry, may have little or no impact on those companies.

The decision will affect companies without the so-called "domestic partner" benefits, as well as municipal and state government employees, who cannot get such benefits because of a state ban.

Still, unmarried workers in long-term relationships aren't on equal footing with married workers right now, thanks to federal tax rules, financial advisers say.

But for Massachusetts residents, the court ruling brings government's recognition of same-sex couples to the same level businesses had already been at for some time.

"This ruling is consistent with our philosophy now," says David Reilly, a spokesman for Cape Cod Healthcare, the region's largest private employer.

The company operates Cape Cod Hospital, Falmouth Hospital, and the Visiting Nurse Association of Cape Cod and employs 4,500 workers, all of whom could access domestic partner benefits.

Workers at CCHC who present proof of a "domestic partner" at home can put that loved one on the company's health plan, just as a married worker would add his or her spouse.

"Most complete benefits"

"The idea at Cape Cod Healthcare is to have the most complete benefits possible to attract and retain the best people on the Cape," Reilly says. It is unclear how many of the 120,000 or so members of the Cape's year-round workforce have access to such plans. The vast majority of local workers are employed by tiny, privately owned firms, many of which can't afford to provide benefits at all.

But a significant number of the region's largest private employers have adopted plans that attempt to put gay and lesbian workers on equal footing with their straight counterparts.

In addition to CCHC, airline Cape Air, tech firm Excel Switching Corp. and Marine Biological Laboratory offer such policies.

The local firms are reflective of a larger, national trend.

Two hundred and three Fortune 500 companies now offer employees access to some kind of domestic partnership benefits package, according to a study commissioned by the Human Rights Campaign, a Washington-based gay and lesbian rights organization.

That's up from 115 companies in 2000 and just 17 companies in 1995. In the last year alone, the number of companies offering such benefits has jumped 20 percent.

"Corporate America has been in many ways the unsung hero in the movement toward equality," says Daryl Herrschaft, Deputy Director for WorkNet at HRC.

Business motivations are primarily behind the shifts in policy, he says.

"There's really no way to do business if you don't adapt to a workforce that you need to employ to beat the competition."

Straight partnerships

Often, those who take advantage of domestic partnership benefit packages are not gays or lesbians, but straight workers who have lived for a long time with a girlfriend or boyfriend and perhaps have a child with that partner, Herrschaft says. Perhaps the first employer in the region to offer domestic partnership benefits was Hyannis-based Cape Air, which employs 550.

The company announced in August 1998 that it would offer equal access to its benefit program.

"The days of Ozzie and Harriet are over," said company President Dan Wolf at the time, via a press release. "It is time for companies to recognize other nontraditional families."

Cape Air was the first airline in the U.S. to make such a move, according to company spokesperson Michelle Haynes. Today, about 3 percent of its employees take advantage of the domestic partnership arrangement.

"What we're amazed at is that there are employers on the Cape that do not recognize domestic partnerships," Haynes adds.

In fact, there appears to be a number of such firms.

Among them is Lance Inc., corporate parent of Cape Cod Potato Chips, which employs 170 at its plant in Hyannis.

"If you can get a marriage license and legally become married, then you are eligible," says Earl Leake, the company's vice president for human resources. "But if you can't, you wouldn't be."

Adhering to state law

Leake says the company, based in North Carolina but with facilities elsewhere, complies to the letter of the law of the states in which it operates. Currently, Massachusetts law does not require private employers to recognize domestic partnerships. Local government employees also have no access to domestic partner benefits packages because public employers in Massachusetts are barred from offering such plans, says Maggie Downey, assistant county administrator for Barnstable County.

As a result, Tuesday's decision could soon have significant ramifications for the public sector.

"We're all going to wait now and see what the Legislature does and how that filters down," Downey says.

The Cape employed 5,470 public sector workers as of 2000, according to the state Department of Division and Training.

Even with domestic partner benefit packages in place, gay and lesbian workers have much to gain through a marriage certificate recognized at both the state and federal level, says Debra A. Neiman, a Watertown-based certified financial planner who specializes in gay and lesbian financial issues.

But it is far from clear that the federal government will acknowledge a gay or lesbian couple is married simply because Massachusetts has deemed them so.

"This will have statewide implications, not federal," she says. "So there will be a real disconnect."

Because of federal law, domestic partnership arrangements can't offer gay and lesbian employees complete parity with their straight co-workers.

The most glaring discrepancy comes in regard to the contributions an employer pays for a worker's domestic partner's health care vs. what it pays for a worker's spouse's health care.

In the case of a worker with a domestic partner, the contributions are deemed taxable income by the IRS.

"If you work for a company and your partner is on your benefits, you will receive a 1099 for the cost of your partner's benefits that's being subsidized by your employer," Neiman says.

That can mean hundreds, perhaps thousands, in unforeseen taxes at the end of the year, she adds. Not so in the case of a straight, married worker.

Neiman says she is extremely pleased by Tuesday's decision, but that she's realistic about the short-term impact on the financial rights of gays and lesbians.

Particularly regarding the issue of dependents, she says, "It's really cloudy, really, really cloudy."

(Published: November 23, 2003)


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