When the rice is swept away and gay couples arrive at the cold, monetary side of matrimony, they may not find happily-ever-after.

In fact, the morning after may find more couples than ever, whether same-sex or heterosexual, on the outside of fringe benefit plans.

Two Oregon counties—Multnomah and Benton—approved licenses for gay marriages in March. The state awaits resolution of the issue by the state Supreme Court, which has been asked to rule on the validity of same-sex couples’ marriages.

If gay marriage is upheld, Oregonians might expect the beginning of the next battle, this one over employee benefits plans.

Business representatives and economists say it’s likely that many companies will balk at any requirement to extend expensive benefit plans to cover newly minted gay spouses, especially at a time when profit margins remain uncomfortably thin. They predict companies will choose to dodge the issue entirely—and save money—by eliminating all spouse benefits altogether.

Faith-based companies could cite both economic and values-based reasons to do so.

Randall Posdena, an economist with ECONorthwest, says the trouncing of Measure 30’s tax surcharge, which contained business tax increases as well as individual tax hikes, “shows how little budgetary room individuals and corporations feel they have as it stands.”

The twin tide of recession and rising healthcare costs already has forced many companies to curtail their benefits plans, either by charging employees higher co-payments or by limiting dependent coverage.

But if gay marriage is legitimized, companies that still cover employee dependents will be forced to cover gay employees’ spouses or risk legal action.

In fact, legal experts say, dropping all spouse benefits would be the only way to avoid breaking the law, should it mandate equal treatment for gay marriages.

The picture might not be much rosier at companies that adopted domestic partner benefits in the 1990s, economists say. Most of those companies, concerned with the appearance of discrimination, chose to treat all unmarried couples equally by offering benefits to both gay and straight partners. But with gay marriage in the offing, it would be cheaper, and less complicated, to provide only spouse benefits and cease coverage for unmarried partners, which arguably comprise a larger and therefore costlier population to insure.

In the end, experts say, gay marriage could mean more uninsured Oregonians than ever. “We will all be equal, and in the aggregate, worse off,” Posdena says.

Up the Creek Without A Marriage License

Roey Thorpe, executive director of Basic Rights Oregon, the gay rights advocacy group that succeeded in winning marriage rights from Multnomah County, said the push for same-sex marriage had nothing to do with getting benefits and everything to do with equal rights. But she acknowledged that more unmarried couples could be without insurance than before gay marriage was available. At the same time, she said, couples—gay or straight—can always marry to avoid losing their benefits. “They will have a choice to make,” she said.

That argument riles one of the gay community’s more ardent supporters.

Dorian Solot, executive director of the Alternatives to Marriage Project and co-author of the book “Unmarried to Each Other,” says it’s discriminatory for employers to pick and choose who to cover based on lifestyle. It was once an argument effectively advanced by the gay community, she says. Now that the gay community has what it wants, it’s abandoning that principle. “Wow,” she said. “I think this points out a real difference of opinion about why domestic partner benefits were offered. Initially, it was for (nontraditional) families. Now they’re saying it was some temporary thing until they could get married. It’s very strange.”

Solot concedes that unmarried straight couples have ridden the coattails of gay rights advocates for years, enjoying the proceeds of their labor without having to fight on their own. But that could change if gay marriage results in the end of benefits for straight couples who choose to remain unmarried.

Some companies, such as the Oregonian newspaper, already treat unmarried couples differently, offering benefit packages to same-sex partners but withholding them from straight partners. It’s a distinction Solot says is inequitable.

Roger Hennagin, a Lake Oswego employment lawyer, agrees with Solot. “The policy is based on the sex of the people with whom the employee associates,” he said. “Seems to me that’s discrimination under the employment discrimination statute.”

But Stacey Lynch, senior consultant with Tualatin-based HR Answers, says the policy is allowed under Oregon Bureau of Labor and Industries guidelines. “The state of Oregon doesn’t think it’s discrimination. The logic from the Bureau is that heterosexuals had the option of getting married and same-sex partners did not.”

It is the same logic behind the state’s family leave law, which allows gay employees to take time off from work to care for sick partners without the danger of losing their jobs. The same benefit applies to heterosexual couples, but only if they are married, a BOLI spokeswoman said.

Straight couples say they see Oregon employers favoring gay couples at every turn. Even government workers, whose partners are allowed coverage, see inequality.

Ken Clow, of Salem, says he receives benefits through his partner, Karla Sanders, who works for state government. But all is not equal, he says, because his benefits are considered taxable income while gay couples’ benefits are not. “If we were homosexual, they wouldn’t do that. To me, it’s flat-out discrimination. If they’re going to give it to them, then I’m gonna have a sex-change operation.” He paused. “I’m just joking about that part.”

Because a majority of those who receive domestic partner benefits are straight couples, it’s that community that will suffer most if companies change policies to embrace only marriage—gay or straight, Solot says.

She hopes that the possible loss of benefits will galvanize the straight population to fight for itself. “Benefits are a form of compensation for work,” she says. “It flies in the face of equal pay for equal work” if they are offered to one employee and then withheld from another on the basis of a worker’s lifestyle.

So far, while there are many Oregon companies that allow coverage for straight partners, there is little move in Oregon to approve a mandate for all companies to do so.

Clow, who wrote letters protesting the treatment of straight couples to U.S. Sen. Ron Wyden, U.S. Sen. Gordon Smith and to Oregon Rep. Jackie Winters, R-Salem, received no replies.

James “J.L.” Wilson, Oregon state director for the National Federation for Independent Businesses, says it’s small companies that are likely to have the most difficulty absorbing additional dependents. Even so, he says, cost is unlikely to be the only issue driving a decision on benefits policy. “Gay marriage is such a wholesale cultural change; most Oregonians disagree with it. They may be perfectly all right with an employee being gay, but draw the line over having to apply benefits,” he said. It’s why Wilson believes companies will be looking for some legal way to opt out of such a policy change.

Oregon’s major employers are split between those that already offer gay partners some kind of benefits package and those that extend benefits only to straight spouses. Few would say what they will do if the state’s highest court ratifies gay marriage, saying they prefer to see the ruling before contemplating their response.

Providence Health System, a Catholic-based system of clinics, hospital and physician’s offices that employs about 14,000 in Oregon, extends benefits only to spouses of its employees. Spokesman Gary Walker said the company has not decided what it will do if gay marriage is approved. The company’s subsidiary, Providence Health Plans, will allow plan benefits to be extended to domestic partners if an employer with more than 50 workers specifically asks for it, he said.

Neither Freightliner Corporation nor Fred Meyer Inc.—both top Oregon employers—offer same-sex benefits to their employees. Company representatives refused to speculate on their strategies should gay marriage be upheld. Jeff Fisher, Freightliner spokesman, said his company will not consider a policy change until it sees how the debate plays out. “We’d want to see the nature of that discussion, see how it would work,” he said.

Nike Inc. offers coverage to its employees’ domestic partners, gay or straight. Scott Reames, spokesman for the company, said the business will not drop any current covered dependents if gay marriage is upheld. The company employs about 6,000 people in Oregon.

Tiana Tozer, spokeswoman for StanCorp Financial Group, which employs nearly 2,000 Oregonians, said the company provides domestic partner benefits to both gay and straight couples but is not sure if that policy will continue as is, or if some modification will be made.

The Economics of Gay Marriage

Portland restaurateurs, hoteliers, and caterers exulted in the honeymoon cash following the rash of gay weddings in downtown Portland.

But soon, analysts say, we will all run into the cold reality of actuarial tables.

Posdena, the economist, says any expansion in the kinds of dependents considered eligible for benefits–whether straight and unmarried or gay—will cause actuaries to shift their assessments to cushion their companies against any numerical increase in risk. Translated: Everyone’s insurance premiums rise as the number of people covered increases.

Posdena said he believes that civil unions or partner registries are likely more rife with this kind of fudging than marriages “to the extent they’re viewed as a less dramatic personal step…But there’s no doubt that the more dependents you create in society, rightly or wrongly, the more costly the provision of benefits.”

There could also be an effect on government coffers as gay couples take hold of tax-free pension plans. “The effect on the public is that there will be some increase in the transfers of wealth that occur without tax,” he said.

The most immediate effect, personnel experts say, is confusion: Companies are unsure what they should do and when they should do it.

Lynch, of HR Answers, says she tells her clients to be sure that any action they take as a result of gay marriage be applied equally to all employees. For instance, she says, “If someone produces a marriage license, regardless of whether they are the same or opposite sex (of their partner) they should be covering them under their benefits plan until they hear otherwise. But there’s a caveat: If you start asking same-sex employees for a marriage license to prove they are married, you’d better ask for it from everyone.”

SIDEBAR:

State of Oregon definition of same-sex partners eligible for family leave benefits, according to Bureau of Labor and Industries:

§         The same-sex domestic partners are not related by blood closer than would bar marriage in the State of Oregon (first cousins or nearer).

§         Neither is legally married.

§         They have continuously lived together as a family and share a close personal relationship, which is exclusive and loving, for an extended period of time, and they intend to maintain that family and that relationship with each other for the rest of their lives.

§         They have joint financial accounts and have agreed to be jointly responsible for each other’s common welfare, including basic living expenses.

§         They would be married to each other if the law permitted them to marry in Oregon.

§         They are the sole domestic partner of each other and have no other domestic partner.

§         They are both 18 years of age or over.

§         They are each homosexual.

BrainstormNW - May 2004