Review: Offering Domestic Partnership Health Benefits: An Economic Concern?

In the United States, employers are an important source of health insurance for citizens less than 65 years of age. Yet despite the country's increasing number of unmarried partner households, fewer than 1 in 4 workers are employed by firms that offer healthcare benefits to same-sex and/or opposite-sex domestic partners. This paper presents the main arguments, from societal and employer perspectives, for offering domestic partnership benefits. As the number of companies offering such benefits has grown, data on the direct costs of insurance have become available. The experience of insurers and employers suggests that adverse selection is not a substantial problem. Domestic partners usually account for only a small percentage of an employer's risk pool, which also limits the potential effect on total insurance costs. Although low enrollment attenuates their potential economic impact on national healthcare, domestic partnership health benefits remain important from a sociopolitical standpoint—acknowledging the value of equity and diversity in the workplace.