In February 2007 the Michigan Court of Appeals ruled that public institutions like the University of Michigan could not continue to offer same-sex domestic partner benefits under a system that mirrors spousal benefits. The GEO’s Benefits For All plan, summarized below, responds to this ruling and protects the right to health care by providing the University of Michigan and other public employers with a workable solution for maintaining commitments to employees. As a designated beneficiary plan, Benefits For All represents a new approach to the provision of health care benefits which accommodates the law and provides benefits to all on an equal basis. We are working with others in the university and across the state to call for the implementation of this plan.
GEO has prepared a White Paper explaining the Benefits For All Plan and addressing several issues raised by its adoption. A pdf of the full paper can be downloaded by clicking this link. A summary of the issues addressed is below.
Why does Benefits For All make sense for Michigan?
Because the current system of Same Sex Domestic Partner and Spousal benefits mirrors spousal benefits, it has been declared unconstitutional. Benefits For All is a designated beneficiary plan which aims to replace existing benefits structures, which are based on marriage or a proxy for marriage (SSDP benefits), with a structure predicated on significant financial and legal ties. By disentangling health care benefits from marital status, designated beneficiary plans establish equal access to health care benefits for all employees while complying with the courts’ interpretation of Michigan law.
How would it work?
Benefits For All, like other designated beneficiary plans, allows employees to designate another person with whom they share close financial and legal ties as their health care beneficiary. An employee can also extend coverage to the dependent children of their designated beneficiary. The Benefits For All plan recognizes that employees have responsibilities to others that do not always fit within existing benefits structures.
Under the Benefits For All plan, an employee would be able to elect coverage for their DB based on financial and legal interdependence or dependence. The factors that establish this relationship may include: power of attorney, joint property ownership, shared bank accounts, or shared responsibility of a minor child. For most couples currently receiving benefits, the process of electing a DB would not affect coverage.
Wouldn’t this be more expensive than other alternatives?
Structures similar to GEO’s Benefits For All plan (e.g. “Plus One” or “All Partner”), are typically added onto to an existing health care program that bases extended benefits to employees’ romantic partners. Under our proposed designated beneficiary structure, employees can extend coverage to another adult only on the basis of the criteria established by the employer. Data from other employers using a system similar to a our plan suggests that implementing such a plan would only marginally increase costs because there are financial disincentives to the employees (taxation of the imputed income and liability for unpaid expenses) that encourage a conservative use of the designated beneficiary option.
