New partner benefits plan for Michigan state employees in limbo

by on December 14, 2010  •  In Family law, States

[Based on reporting in The Michigan Messenger and the Lansing State Journal:]

The Michigan Civil Service Commission has tabled its consideration of a proposal to extend health insurance benefits to unmarried, live-in partners of all state employees regardless of sexual orientation or relationship. The plan is supported by outgoing Governor Jennifer Granholm, but is unlikely to gain the backing of Republican Governor-elect Rick Snyder, who takes office Jan. 1.

Under the proposed policy, negotiated by the Office of the State Employer (OSE) and unions representing state employees, health insurance coverage would be available to all non-related people over 18 who have shared a residence with a state employee for at least 12 months, covering both same-sex and opposite-sex partnerships. The children and dependents of those newly eligible would also be extended coverage under the same conditions as any other person eligible for coverage.

Republican members of the state legislature say the plan will cost too much at a time of budget austerity. The governor’s office says the annual cost for the program could be as much as $5.7 million, but the CSC was told this morning the cost could be as low $2.2 million.

Neither figure considers the tax revenue which results from the plan. The IRS has determined that benefits provided under domestic partner like programs are considered taxable income. As a result, the Human Rights Campaign reports that in 2007, people with partner benefits pay an additional $1,069 in federal taxes. The Michigan Department of Treasury was unaware of what amount of income tax in the state is generated by current domestic partner programs — such as those offered by state universities and private employers.

The issue stems from a 2006 contract agreement between state unions and the Granholm administration. Those approved contracts included the option to extend partner benefits for state employees.  A lawsuit challenging domestic partner benefits was based on the broad text of the state constitutional amendment adopted in 2004, which barred recognition not only of same-sex marriage but also of "any other similar union." The Michigan Supreme Court ruled in National Pride at Work v. Michigan, 481 Mich. 56, 748 N.W.2d 524 (2008), that the language prohibited partner benefits for gay couples.

Since then, state officials and employee unions have redrafted the agreement to eliminate specific references to same-sex domestic partners. Universities and other public employers developed Other Eligible Individual (OEI) programs that allow employees to designate an OEI, if that person satisfies criteria such as sharing a residence. 


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