From: Stephen F Mershon +1 908 582 3511 <[email-masked]>
Date: 14 Jun 94 01:54:00 GMT

Lezlie Lee writes:

  Please let me know if you have any information concerning:

  o  Claims and associated increased costs
  o  AIDS impact on domestic partner benefit claims 

Here is a high level summary that LEAGUE at AT&T has drafted:

Steve Mershon
Lesbian, Bisexual & Gay United 
  Employees (LEAGUE) at AT&T
[email-masked]
-------------------------------------------------------------------------

     LEAGUE                     draft              November, 1993

                Cost of Offering Domestic Partner Benefits

     The overall added costs to a company of offering Domestic
     Partner Benefits are typically 1% to 3% of the existing benefits
     budget, far less than commonly assumed.  The 1% figure tends to
     apply when benefits are offered to same-gender partners only,
     and the 3% figure tends to apply when benefits are offered to
     opposite-gender partners as well.

     There are two primary reasons for the low cost - the sign-up
     rate is typically 1% to 3% of the employee population, and the
     cost of insuring a domestic partner is typically less than or
     equal to the cost of insuring a married partner.

     As a point of comparison, health insurance costs continue to
     rise by double-digit percentages every year due to other
     factors.

       1.  Sign-up rates are low.

              o In most domestic partnerships, both partners are
                employed, and both have good insurance coverage
                provided by their own employer.  Thus, many partners
                of employees do not need the coverage.

              o The IRS considers the value of benefits provided to
                domestic partners to be ordinary income, unlike
                benefits provided to married partners.  Unless the
                employee's partner can meet the IRS definition of
                financial dependent, the employee's cost of paying
                income tax on the market value of benefits received
                can be significant, and can discourage employees and
                their partners from signing up.

              o Due to ongoing homophobia in the workplace and in
                society, some lesbian and gay couples are so fearful
                of revealing their orientation that, despite company
                guarantees of confidentiality, they will not apply
                for the benefits even if they have need for them.

       2.  Costs are low.

              o People in domestic partnerships are, on average,
                younger than married couples, and thus generally in
                better health.

              o The biggest overall expense in most health care plans
                is attributable to pregnancy-related expenses,
                including neonatal care and the very high costs
                associated with premature childbirth.  Domestic
                partners, on average, have a lower rate of childbirth
                than married couples.

              o AIDS is not the major cost problem that many tend to
                assume it is.

                   o AIDS treatment is not overly expensive compared
                     to other illnesses.  The average lifetime costs
                     of treating an AIDS patient are around $75,000
                     (1992 NIH data).  This compares to $570,000 for
                     a catastrophic accident leading to quadriplegia,
                     $250,000 for a liver transplant, and $30,000 for
                     a heart bypass.  Lifetime costs for an
                     individual with HIV infection/AIDS are generally
                     in the same ballpark as lifetime costs for an
                     individual with cancer or an individual with
                     heart disease.

                   o The spread of HIV infection in the gay male
                     population has been greatly reduced through
                     education, and HIV infection is very rare among
                     lesbian couples.

                   o Companies, municipalities, and universities that
                     offer domestic partner benefits report that
                     claims against health insurance for AIDS have
                     been rare.

                   o The risk of fraud (signing up an HIV-infected
                     acquaintance as an employee's domestic partner
                     for the sole purpose of gaining health coverage)
                     is greatly exaggerated.  The signed affidavit of
                     domestic partnership may make the employee legally
                     responsible for the partner's financial debts,
                     and subjects the employee to risks of firing and
                     criminal charges, if fraud is attempted.
                     Companies, municipalities, and universities
                     currently offering domestic partner benefits
                     report that fraud has not been a problem.