Study: Cost of domestic partner benefits could be limited
After reviewing state-level efforts, the Center for American Progress concluded that relatively few employees would use partnership benefits, keeping the cost minimal. In Connecticut, which introduced domestic partner insurance coverage in 2000, just 0.7 percent of state employees participated during the first two years of the program, the report stated. That increased the outlay for employee benefits by $825,000, a figure that was about 0.1 percent of the state's total benefits costs.
The study also noted that in Iowa, which extended domestic partner benefits in 2003, just 74 state employees use the benefits, and less than 0.5 percent of the state's employee benefits and insurance budget is dedicated to the new offering.
"The costs of expanding the benefits [for states] has been negligible; the process has been smooth; potential employees have been attracted by the benefits and current employees have been more inclined to remain; and providing the benefits has in turn lowered the cost of other social services, leading to net savings," authors Winnie Stachelberg, Josh Rosenthal and Claire Stein-Ross stated.
Other studies have estimated that the annual cost of providing partnership coverage to federal employees would fall between $60 million and $70 million.
A 2008 report by the Williams Institute at the University of California Los Angeles School of Law predicted that 14,436 same-sex partners and related children would enroll in the Federal Employees Health Benefits Program if allowed, adding $60.4 million to health care spending in the first year.
Sen. Joseph Lieberman, I-Conn., who in December 2007 introduced legislation (S. 2521) to provide federal employees with domestic partnership benefits, said during a Sept. 24 hearing that the Congressional Budget Office had placed the 10-year cost of extending such benefits at $670 million.
"I understand that covering domestic partners will add to the total cost of providing federal employee benefits, and I understand that now is a time when we have to be careful about government expenditures, and we have to do rigorous cost analysis of all programs," Lieberman said. But CBO's figure, which averages to $67 million in annual costs, is small compared to a budget that stood at $3 trillion "and this week is rising every day," he said.
Yvette Burton, a business development executive at IBM, said during the hearing that there were costs associated with not providing benefits: employees could get so distracted by benefits concerns, she said, that their productivity could fall by up to 20 percent.