Covering All Partners
by Meg Daly
Oregon Business, April 2005
Human resources expert Jim Morris couldn’t get his spouse on his health plan.
Try as he might, the answer kept coming back “no” from the insurance company that provides health coverage for the two other principals and three employees at MBL Group, a human resources consulting firm Morris co-founded in 1992. His colleagues’ dependents are covered under the firm’s health plan.
Morris’ family wasn’t viewed differently because his spouse has a preexisting condition—unless being a 50-something classical guitarist is a huge risk factor in the eyes of an insurance actuary. The only reason was that Morris is married to Richard Colombo, a man.
While Oregonians may still disagree about who constitutes a spouse, Morris and Colombo have no doubt they should qualify. They are deeply committed to each another, they own a home together, they obtained a civil union license in Vermont, and they were married in Multnomah County last March. In short, they consider themselves husbands, a devoted family of two.
The struggle for gay marriage in Oregon has put in high relief the discrimination faced by gay, lesbian, bisexual and transgender people. There is no state law protecting the civil rights or the relationships of gays and lesbians. What this means in the world of health insurance is that, until couples such as Morris and Colombo are recognized as spouses by the state, most insurance companies will not see them that way either.
While a handful of large employers have honored same-sex marriages—for instance, Legacy Health System and IBEW Local 48—most gay and lesbian couples can only hope to be recognized as domestic partners. Insurance companies still have the power to choose how and when to provide domestic partner coverage. In turn, businesses can then choose whether or not to offer that coverage to their employees.
The good news is that many larger employers do offer these benefits—among them are Oregon Health & Science University, PGE, Kaiser Permanente and Powell’s Books. The bad news is, if you are a small business, you have few choices for how to offer domestic partner benefits even if you want to. This can be true even for small employers that buy health insurance through a larger association, such as the Timber Operators Council (TOC). It all depends on what the association chooses for its benefits package—small employers must abide by the association’s package.
Most insurers require a minimum number of employees to offer domestic partner coverage—usually more than 50. Until recently, a six-person firm such as Morris’ had nowhere to turn.
“A small business is faced with having to raise rates or change plans for all employees,” says Roey Thorpe, executive director of the gay rights organization Basic Rights Oregon (BRO), which spearheaded the gay marriage effort in the state. BRO is now pushing a package of legislation in Salem that would allow same-sex civil unions and protect gays and lesbians from discrimination. “[This] highlights the kinds of inequities most people are not aware of, that are faced by gay and lesbian families.”
But PacificSource, MBL Group’s health insurance company, is changing all that. According to PacificSource CEO Ken Provencher, effective April 1, PacificSource will add domestic partner benefits to all group plans, regardless of size.
This is good news for Morris. He has met with Provencher in the past to discuss solutions for small businesses such as his. While Provencher does not attribute the change in PacificSource’s policy to his talks with Morris, he does say the political climate in Oregon has informed the company’s decision.
Provencher says he was looking for a plan that would address where the company “wants to be on this in the long term. The decision is a result of our analysis of risk with existing groups that have domestic partnership coverage. We haven’t seen any pattern of selection issues.”
What this means in layman’s terms is that the partners of gays and lesbians pose no increased actuarial risk compared to the covered spouses of heterosexuals. Now that insurers such as PacificSource have several years of data from their large-group domestic partnership coverage, they can more accurately assess the risk.
While Morris is happy about this new opportunity to insure his husband, he says the problem of access to coverage remains for many other gay and lesbian families who cannot get insurance through their workplace plan.
“Insurance is one place where it’s still okay to discriminate blatantly,” Morris says. “It’s built into the whole way the actuarial process works.”
None of the major insurers operating in the state has so far moved proactively to extend coverage to the gay and lesbian couples who married last year in Multnomah and Benton counties during their limited legal window of opportunity.
“I’ve taken an active role in protecting my family,” Morris says. He and Colombo have spent thousands of dollars obtaining medical power of attorney for each other and writing each other into their wills. “But,” he says, “no amount of lawyering is going to fix the larger problem.”