FMA IS BAD FOR BUSINESS: Howard Paster

...For example, New York City's the Village Voice, the nation's first alternative weekly, was also the first employer in America to offer health insurance to its employees' domestic partners in 1982. That benefit, offered by a small, progressive employer in the Northeast has ballooned into what today includes 40% of the Fortune 500 companies. It includes oil giants Shell Oil and BP, the Big Three auto makers, Lockheed Martin, General Electric, Coca-Cola and so on. Bottom-line, business decision-making explains it: Respected employees perform better and stay longer and these benefits cost very little.

Corporations have added domestic-partner benefits even though the Internal Revenue Service considers them taxable income to the employee. This means that both federal-income and payroll taxes are levied on health-insurance premiums paid to cover a domestic partner. The same is true for income tax levied in all but three states. While this doesn't raise insurmountable costs, it does place an administrative burden on companies that need to set up one payroll system for married heterosexual couples and another for partnered gay couples.

The proposed Federal Marriage Amendment could label any benefit that employers extend to same-sex couples -- from group health insurance to family leave to bereavement leave -- as unconstitutional. Forty percent of Fortune companies and countless thousands of others could lose their ability to define their own benefits plans in terms that support their business operations. Even if private plans were not affected, the amendment would continue the IRS policy of taxing health-insurance premiums and jeopardize equal tax policies in Vermont, California and Massachusetts.

And legal marriage has its upsides, too. Not just because newlyweds take a lot of pictures, buy a lot of flowers and go on honeymoons. One unexpected consequence of the legalization of gay marriage in Massachusetts is that small businesses are actually more competitive. Now that gay partners who marry meet the definition of "spouse," smaller employers no longer have to wrangle with insurers and struggle to make benefits available to their employees that large self-insured companies have always done with ease. The result is that smaller firms are better positioned to compete for talent against larger firms that can entice gay employees with fully comparable benefits plans.

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posted by Eve at 3:30 PM VOTE

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