Bill introduced to end discriminatory taxation of domestic partner health insurance

HRC reports that Representatives Jim McDermott (D-WA), Richard Hanna (R-NY) , Earl Blumenauer (D-OR) and Nan Hayworth (R-NY) have introduced the Tax Parity for Health Plan Beneficiaries Act in the House of Representatives. The bill would end the unfair taxation of employer-provided health insurance for domestic partners. A companion measure from Senators Charles Schumer (D-NY) and Susan Collins (R-ME) will be introduced when the Senate returns from its Memorial Day recess.

Under current law, although employer-provided health coverage for different-sex spouses is excluded from an employee’s gross income, domestic partner benefits and coverage for same-sex spouses are not. As a result, an employee who elects to cover his or her domestic partner or same-sex spouse pays more income and payroll tax than a similarly-situated employee with a different-sex spouse. Moreover, because of this inequitable treatment, employers who offer benefits to domestic partners face the administrative burden of calculating taxes separately, and they also pay additional payroll taxes.

Nearly 60% of Fortune 500 companies provide domestic partner benefits. That is why a coalition of top employers like Dow, Corning, Chubb, IBM, MassMutual, Microsoft and dozens more support ending the taxation of these benefits, and endorse the Tax Parity for Health Plan Beneficiaries Act. To see a full listing of businesses who have publicly stated their support for this legislation, go here:

Nationwide Statement

"Reflecting our strong commitment to diversity and inclusion, Nationwide offers health care coverage to certain non-spouse, non-dependent beneficiaries of our associates, such as adult children, grandparents, domestic partners, and other household members," said Steve Keyes, Vice President of Associate Relations and Human Resource Policy at Nationwide Mutual Insurance Company. "While our coverage gives associates health coverage on an equitable basis, the federal tax treatment of such coverage is not equitable. Extending the tax preference to all members of an associate’s household would lower costs while improving access to coverage for many Americans."

American Airlines Statement

“American has been at the forefront of supporting fair and equitable tax policy for all Americans and today’s introduction of the Tax Parity for Health Plan Beneficiaries Act is another step toward achieving that goal. Eliminating the federal tax inequities for employees of corporations like American that provide health care coverage to the domestic partners of our employees remains a priority and we encourage the Congress to enact this important legislation,” said Will Ris, Senior Vice President, Government Affairs at American Airlines.

Metlife Statement

"MetLife’s decision to extend benefit coverage was made nearly 10 years ago, and was centered around questions not only of equity, but the usual factors influencing benefit offerings – to attract and retain the most qualified, committed, talented and diverse workforce. As a leader in the benefits area, we know that tax treatment is not the only factor considered when employees make a benefits decision – but, it is very often an important catalyst to education and action, and certainly influences affordability," stated Margery Brittain, Senior Vice President, Global Compensation and Benefits at MetLife.