The Cost of Being Gay

A look at the financial realities of same-sex partnerships.

Gay couples face a host financial and legal complications because of the federal law that bans same-sex marriage. As a result, they often end up having to pay more for a host of things — tax preparation, health benefits and estate planning, among other things.

So it’s not terribly surprising that the law complicates things for same-sex partners’ employers, too, especially when a couple’s union may be recognized in a particular state, but not in the eyes of the federal government. Not only does that leave plenty of room for error in the administration of employee benefits, it also forces employers to treat their employees differently simply because of their sexual orientation.

As a result, more than 200 companies — among them giants like Citigroup, Apple, Mars and Amazon — as well as city governments, law firms and others, are arguing that the law that bans same-sex marriage imposes serious administrative and financial costs on their operations. The companies filed a supporting brief with the Supreme Court on Wednesday, urging it to overturn a section of the Defense of Marriage Act that denies federal benefits and recognition to same-sex couples.

“It puts us, as employers, to unnecessary cost and administrative complexity, and regardless of our business or professional judgment forces us to treat one class of our lawfully married employees differently than another, when our success depends upon the welfare and morale of all employees,” they wrote in the brief.

We’ve documented these inequities and complications as part of the “Cost of Being Gay” series on Bucks. For instance, gay employees who add their partners to their health benefits are taxed on the value of that coverage (if the partner is not considered a dependent) since their unions are not federally recognized. Opposite-sex married couples are not subject to the tax, so some employers have attempted to equalize the playing field by covering the extra costs for same-sex employees. We’ve tracked these efforts on a chart, which can be found here.

We’ve also written about the errors that can arise when organizations have to keep track of those extra taxes, including Yale University‘s failure to withhold the proper amount of income for a group of workers.

Then, there are the variety of questions that are easily answered for married employees with opposite-sex spouses, but not so straightforward for gay employees: If I get married, can I automatically add my spouse to my health insurance outside the annual “open enrollment” period? Will my partner even be covered? What about our children?

What other administrative and benefit-related issues do same-sex couples face in the workplace? Please share your thoughts in the comment section below.

Article source: http://bucks.blogs.nytimes.com/2013/02/28/corporate-america-weighs-in-on-treatment-of-gay-couples/?partner=rss&emc=rss