Measure Could End Same-Sex Couple Benefits Penalties

By Arthur D. Postal

June 07, 2007 at 04:34 PM

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Lawmakers have introduced a bill in Congress that could equalize tax treatment of employer-provided health care benefits for same-sex couples and heterosexual couples.

Current law requires employers to pay payroll taxes on the value of domestic partner health coverage, and employees have to pay both payroll taxes and income taxes on the value.

The bill was introduced as S. 1556 in the Senate and as H.R. 1820 in the House.

Sens. Gordon Smith, R-Ore., and Maria Cantwell, D-Wash., have introduced the Senate version of the bill, and Rep. Jim McDermott, D-Wash., has introduced the bill in the House.

Sen. Joseph Lieberman, Ind.-Conn., is an original co-sponsor of the bill.

Margery Brittain, vice president of global benefits at MetLife Inc., New York, and a member of the Business Coalition for Benefits Tax Equity, Washington, says 266 of the Fortune 500 companies now offer domestic partner coverage. The number is about 12 times higher than it was in 1995, Brittain says.

Smith says the Senate version of the bill could get through Congress either as a stand-alone bill or as part of omnibus health insurance legislation now being drafted by the Senate Finance Committee.

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