Health Care Bill Would Make Domestic Partner Benefits Tax Free

We pay upfront.

We pay fed taxes upfront, $573 per quarter.  The inbalance would be more but California doesn't consider our being able to cover DPs like opposite sex couples to be "non wage income" so we don't have to pay state tax.

Say those words...."non wage taxed income"
But heteros....on no....special treatment because they aren't taxed on providing for their loved ones.

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by: Karen in Kalifornia @ Wed Nov 11, 2009 at 13:44:46 PM CST

That's great news

I'm practically holding my breath, waiting for health care reform to become law.  It would help in so many ways.  I'm now working for a company that offers DP coverage, but we can't afford to put my partner on my insurance because of the tax imbalance.  I'm also hoping to change jobs in the spring, and I'm afraid that if I'm diagnosed with something now and then change insurance, I'll have a "pre-existing condition" that wouldn't be covered by my next policy.  It would be a great relief not to have that anxiety any longer.

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by: JosephineTx @ Wed Nov 11, 2009 at 15:43:33 PM CST

This is excellent news.

And frankly, it might be the start of a great strategy to undermine DOMA anyway.  Start chipping away at all those legal provisions for the Marrieds by including DPs and Civil Unions.  Because those people aren't married!  Take the teeth right out of DOMA.

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by: SuburbanHomo @ Wed Nov 11, 2009 at 15:57:36 PM CST

What a conundrum for pro-choice gays.

We have a chance to get rid of a very dangerous form of discrimination against us, but if we support this bill's passage with the anti-choice amendment in it, we'd be abandoning one of our most steadfast allies.

Fetch my pearls, I need to clutch them!

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by: RainbowPhoenix @ Wed Nov 11, 2009 at 23:30:06 PM CST

And some of those women would be part of the communities...

Not just allies.

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by: lyonside @ Wed Nov 11, 2009 at 23:34:25 PM CST

[ Parent ]

I don't think Stupak will stay in IMO

I think the response was so swift and loud Dems know leaving it in will devastate their electoral efforts next fall.

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by: Clarknt67 @ Thu Nov 12, 2009 at 07:49:07 AM CST

[ Parent ]

DP benefit taxes SUCK...makes me steamed to think about them

I carried my partner for almost a year and was charged almost 30% of my salary.  Definitely spent more money on the benefits than actual dollars used for healthcare.  Human resources would NOT give me an exact figure of what these taxes would cost before I made the decision to enroll--it was a based on my predicted tax base.  Whatever their bizarre algorithm for calculating this tax was, it changed every paycheck.

Every time I asked for a justification of why I had to pay this tax, I was given the run around and finally told that "BECAUSE MARRIAGE IS BETWEEN ONE MAN AND ONE WOMAN."  

After dealing with human resources NOT canceling my benefits for my partner (and then being told I would have to pay for them for an entire year because I had missed the one week window to change them) I tried to get a refund on the taxes.  Everyone in payroll calculated the refund differently.

When I tried to explain to the deaf ears of my boss that my salary was not liveable after these benefit taxes were deducted, and why the unpredictable algorithm of human resources and their attitude toward me was inhumane, guess what happened?  I was "force quitted"--knowing that he couldn't fire me, he dropped my hours down from full-time to FOUR hours per week, knowing that I would have to resign in order to live and that I could not sue him for discrimination if I quit.  When I did resign, guess what happened then?  Human resources magically billed me for an entire month of partner benefits at COBRA rates ($850) plus federal taxes on this because I resigned on the fourth of the month.  This was one of the most degrading, frustrating, humiliating, bull-dukey and financially ridiculous things I ever signed up for.

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by: blakelight @ Thu Nov 12, 2009 at 03:27:41 AM CST

You might look into that

I was "force quitted"--knowing that he couldn't fire me, he dropped my hours down from full-time to FOUR hours per week, knowing that I would have to resign in order to live and that I could not sue him for discrimination if I quit.

Creating a hostile work place or punitively scheduling fewer hours as retaliation for complaining is actionable as well. The law does actually recognize passive-aggressive "firing" techniques. I'd call Lambda Legal if you're inclined to sue.

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by: Clarknt67 @ Thu Nov 12, 2009 at 07:53:47 AM CST

[ Parent ]

Great advice. I had no idea at the time that I had recourse--

But I'll spread the word if I hear of it happening to someone else.  I vetted my case through the state civil rights division and they were willing to take the complaint, but I couldn't take the stress.  I support lawyers and people who have the grit to sue.  I also believe, from a boss's standpoint, that if you blow up at a great employee (I saved his career and rebuilt his organization and lazy-assed employees from top to bottom) and fire or force-quit them as a knee-jerk emotional response to their complaining about an act of discrimination (from the HR office, no less) or compensation, chances are pretty high that if that employee was valuable, the boss is already a sorry sucker.  Competent hard-working dykes are kinda irreplaceable.  That had to have hurt.

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by: blakelight @ Thu Nov 12, 2009 at 17:53:35 PM CST

[ Parent ]

Some questions

and probably dumb ones, but cut me slack- I drove 300 miles yesterday! ;)

1. How would one be able to file for this, if they live in a state w/o DP recognition?

2. Would a couple who is legally married (in the handful of states that allow) have to file federally as DP'd?

3. Does this essentially, as a law (if that does indeed become the case), allow for legal DP status federally? Did we just manage to get that?

4. How will this affect military members? If they can be part of a federally recognized DP, can they still be discharged under DADT?

This could be big...

"It goes on one at a time, it starts when you care to act, it starts when you do it again after they said no, it starts when you say We and know who you mean, and each day you mean one more."

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by: Louise @ Thu Nov 12, 2009 at 05:15:53 AM CST

Taxable Income is Added to Your Paycheck

What happens is, as it does in my case, the employer adds the value of the health insurance benefits to your paycheck as taxable income in the federal taxable gross income section of your paycheck. When you file taxes, this is the amount you use. The change in the law would take place at the employer level, they would no longer add the value of the benefit to this section of your check. There would not be a difference in how you file your taxes.

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by: kelehe @ Thu Nov 12, 2009 at 07:05:43 AM CST

[ Parent ]

I would get they are using

DPs in the more general sense, than the specific legal definition WA has assigned it. The language of the bill may be of the effect, "additional coverage for all other dependents in your household." So:

1. I think your payroll department would take care of it by reporting it differently to the IRS, who would then recognize it as non-taxable income as opposed to taxable income as it does now.

2. I doubt it.

3. No, I highly doubt it's reach would expand beyond health insurance benefits.

4. Yes, they can still be discharged. Military is exempt from many civilian laws, as several Supreme Court rulings have affirmed. Thus, ENDA too would be inapplicable to the military, because if he were, clearly it would invalidate DADT.

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by: Clarknt67 @ Thu Nov 12, 2009 at 08:00:15 AM CST

[ Parent ]

Nice if you live where you can have a DP or marriage...

Only a very, very tiny percentage of GLBT people live in areas where they can even have a DP or marriage.  This will mean jack squat to me living in Ohio.  I've got to guess this will cover about 6% of all GLBT people nation-wide.

More crumbs off massa's table for a few.

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by: Storm @ Thu Nov 12, 2009 at 07:56:31 AM CST

I haven't read the bill

but I think it's more about tweaking the language of relevant TAX LAW. Many companies in states that don't have DPs or marriage still are progressive enough to offer domestic partnership benefits to their employees. (Example: University of Alabama-Birmingham.)

How I'm reading this is: existing tax law will be tweaked to accept DP benefits as defined by the company. So if you meet your company's bar for what defines a dp, you're good.

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by: Clarknt67 @ Thu Nov 12, 2009 at 08:04:46 AM CST

[ Parent ]

Out in the cold here...

No DP bennies here at this Ohio steel mill, and there never will be.  I've got 35 years invested in this place.  Good pay, but my partner is min wage and no benefits.  If he ever got sick he'd receive crap care on the public dole.

This really burns my ass.  We've been together 24 years and I feel that there is still no way that I can help provide for him if he really needed it -- and it's just a question of time.  But, a couple who've been together for 2 weeks who work a progressive company that offers DP benefits, oh they're so special -- they get health care and tax breaks.  Love it.

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by: Storm @ Thu Nov 12, 2009 at 10:16:22 AM CST

[ Parent ]

Not typically.

Save your vitriol for the straights who vote to keep us down and the businesses who don't offer us benefits. Every company I've worked for in DC or Maryland has gotten DP benefits during the time I worked there (and that's three companies - since I've gone to HR and the EOO or the ED each time to ask why we didn't have them, I'd like to think that I may have had some hand in it). Each of them has had the same requirement: live together for at least a year, and prove it with the same address on your drivers' licenses, or utility bills. Straight couples can meet and marry in Las Vegas the same day and get their benefits started as soon as they show up back at work after vacation. Same-sex couples have to be together at least a year.

I realize you're angry that you don't have DP benefits. I wish every single company in the country did. Hell, I wish we could all get married and not worry about any of this. I realize I am privileged to have had my choice of jobs every time I've been ready to change and could choose to work for progressive companies. I am privileged in that I could move from hostile Virginia to more friendly Maryland and eventually to a marriage equality state. I have not stopped fighting for repeal of DOMA and for passage of ENDA. I've been with my partner for less time than you've been with yours, but I'm not your enemy and neither are the progressive companies that make our lives a little better by covering the partners of those of us who do work for them.

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by: one jewish dyke @ Thu Nov 12, 2009 at 13:57:53 PM CST

[ Parent ]

And that would be the base

for one helluva lawsuit of discrimination, in my very uneducated legally mind- how can one couple have federal tax benefits that another cannot, simply because of state residency?

"It goes on one at a time, it starts when you care to act, it starts when you do it again after they said no, it starts when you say We and know who you mean, and each day you mean one more."

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by: Louise @ Thu Nov 12, 2009 at 08:12:52 AM CST

[ Parent ]

Clarknt67 is correct..

This is a change to the tax code only, which applies no matter where you live if the company you work for provides DP benefits.  State residency has nothing (or at least very little*) to do with it.

Example - When I lived in Virginia (one of the most anti-gay places in the country in terms of laws), my employer still offered domestic partner benefits (which in reality is mostly health care coverage).  The company I work for now also provides them, no matter where we live.

Right now those benefits are taxable to me as income, and this bill would change that to non-taxable income, giving them the same treatment as married couples benefits.

*I believe state residency can impact it if the employer wants to offer DP benefits but can not afford to self-insure, in which case an underwriter in an anti-gay state can use state law to reject the giving of DP benefits.  But I defer to my fellow lawyers who are more versed in insurance and benefits law on that.

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by: SuburbanHomo @ Thu Nov 12, 2009 at 09:04:49 AM CST

[ Parent ]

Tiny Percentage?

California has comprehensive domestic partnership and 12% of the U.S. population.  Add in the other DP states - Washington, Nevada, Oregon and New Jersey - and the marriage states - Iowa, Massachusetts, Connecticut, New Hampshire and Vermont - and you're talking a pretty big chunk of people.  Once you add in New York and DC, which recognize out-of-state marriages, you're up to 1/3 of the population of the country.

Still not 100%, but not "tiny" either.

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by: samritchie @ Thu Nov 12, 2009 at 16:24:47 PM CST

[ Parent ]

Applies to all

As the new health care bill is MAMMOTH in size, it can be confusing to read through relevent provisions to figure out exactly how domestic partners benefit.

From what I've read so far, the only requirement will be that the same sex partner receiving benefits live in the same household as the employee. There does not need to be any registration as a domestic partner or spouse.

The provisions are even more confusing because they don't even call these people "domestic partners" or "same sex" anything. I'll write another post about this on my blog once I've gone through all the applicable provisions.

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by: gideonalper @ Thu Nov 12, 2009 at 17:10:58 PM CST