September 14, 2004
SUBJECT: Study of the Feasibility of Extending Benefits to Domestic Partners for City’s Regular Employees (Study Issue)
REPORT IN BRIEF
In response to the City Council’s request to study the feasibility of extending benefits to domestic partners for City regular employees, this report provides an update on current State law requirement to comply with the California Registered Domestic Partner Rights and Responsibilities Act of 2003, which extends City benefits to employees’ domestic partners in the same manner that extends it to spouses, effective January 1, 2005. The benefits included are those offered to regular employees: medical, dental, vision, and employee assistance program.
This report recommends no action by the City Council, since compliance with the law will automatically grant domestic partners eligibility to obtain benefits as of January 1, 2005.
BACKGROUND
The City Council had asked the Department of Human Resources to conduct a study on the feasibility of offering domestic partner benefits to City of Sunnyvale employees. The study was conducted and this report contains the study findings and recommendations.
EXISTING POLICY
This Study Issue relates to the General Plan, Planning and Management Element, Sub-element 7.3 Legislative Management, Goal 7.3D: Maintain a quality workforce, consistent with laws, the Charter, and adopted policies in order to assure that City services are provided in an effective manner. Action Statement 7.3D.1a states: to maintain a competitive pay and benefits package for employees.
The City of Sunnyvale benefits plans including medical, dental, vision and employee assistance programs currently are extended only to the opposite sex spouses and dependent children of employees. This includes, biological, adopted or other dependent children who live in a parent-daughter/son relationship with the employee. The City of Sunnyvale does not provide coverage for domestic partners of employees.
DISCUSSION
Survey Results
A survey was conducted among the Bay Area cities used by the City of Sunnyvale for surveying collective bargaining items. The ten cities included:
Alameda, Fremont, Hayward, Milpitas, Mountain View, Palo Alto, Richmond, San Leandro, San Mateo, and Santa Clara. Six of these cities currently provide some type of domestic partner benefits to their employees. The cities providing these benefits include: Fremont, Hayward, Mountain View, Palo Alto, Richmond and Santa Clara. Alameda, Milpitas, San Leandro and San Mateo do not.
In addition, the City of San Jose, County of San Mateo and Santa Clara County provide domestic partner benefits. The State of California has authorized the extension of benefits to domestic partners since January 2000.
Existing State Legislation
The State of California has adopted the following:
- Anti-Discrimination law in 1992 prohibiting sexual orientation discrimination in public employment, public accommodations, private employment, and education.
- Domestic Partnership registry in 1999 provided for registration and allowed certain benefits to be extended as of the year 2000 if specifically elected.
- California Registered Domestic Partner Rights and Responsibilities Act of 2003 (A.B 205) chaptered into law on September 2003, which will become effective on January 1, 2005. This measure provides that domestic partners, registered on or after January 1, 2005, shall have the same rights, protections and benefits (including retirement), and shall be subject to the same responsibilities, obligations and duties under (State) law as are granted to and imposed upon spouses. It also modifies procedures for the termination of such partnerships and provides for other legal requirements and penalties unrelated to the provision of benefits for private and public employers. It further stipulates in Section 297.5 (h) the following:
“No public agency in this state may discriminate against any person or couple on the ground that the person is a registered domestic partner rather than the spouse, or that the couple are registered domestic partners rather than spouses, except that nothing in this section applies to modify eligibility for long-term care plans pursuant to Chapter 15, Section 21660 of part 3 of Division 5 of Title 2 of the Government Code”.
In addition, Section 297.5 (i) states:
This act does not preclude any state or local agency from exercising its regulatory authority to implement statutes providing rights to, or imposing responsibilities, upon domestic partners.“
This Section provides that as long as there is no discrimination in treatment, the agency may require domestic partners to comply with the same rules and regulations imposed on spouses, such as providing the appropriate domestic partner registration/marriage certificate to obtain benefits.
It is important to note that the definition of “domestic partner” does not only include same sex partners over the age of 18, it also includes opposite sex couples, one of whom shall be over the age of 62 and registered as domestic partners.
- Assembly Bill 2208, Health Care and Insurance Benefits, an active bill currently in the Senate, would require a health care service plan or health insurer to extend benefits to a domestic partner in the same manner as provided to a spouse. In addition, it would cover all other forms of insurance regulated by the Department of Insurance renewed after January 2, 2005. This legislation would obligate insurance providers to include domestic partner coverage to do business in the State of California.
Existing Federal Legislation
Federal law at this time does not recognize domestic partnerships. The difficulty that this creates is that any employer’s contributions towards the premium of adding a domestic partner may be considered taxable income to the employee.
Current Insurance Providers
All insurance providers currently contracted by the City have provisions to cover domestic partners within the definition of dependent. CalPERS has notified the City that enrollment for the medical plans can start as early as the City’s Open Enrollment period in September to be effective on January 1, 2005.
Eligibility for other insurances could start at the same time.
FISCAL IMPACT
It is unknown at this time how many City of Sunnyvale employees, and retirees will be affected by the law taking effect January 1, 2005. The California Registered Domestic Partner Rights and Responsibilities Act of 2003 (A.B 205) recognizes that it imposes a state-mandated local program by adding to the duties of County Clerks and will establish provisions to make reimbursements, including the creation of a State Mandates Claims Funds to pay the cost of mandates not to exceed $1,000,000 statewide. However, there is no mention of cities or other public agencies, so it is uncertain as to whether the City of Sunnyvale would be eligible for any reimbursement.
It is assumed that the cost of domestic partner participation in the City’s benefits programs would not exceed those costs that would occur if the employee married a person of the opposite sex and claimed benefits as a married employee for his/her dependent(s). However, there is no doubt that future costs will be greater than current benefit costs because the law is extending benefits to individuals who are currently not eligible for benefits.
It is important to add that the benefits extended to domestic partners are not just limited to insurance and retirements, but also to City provided leaves that are normally available for employees, such as bereavement and emergency family leave available.
Conclusion
The City Council had asked the Department of Human Resources to conduct a study on the feasibility of offering domestic partner benefits to City of Sunnyvale employees. At the time of the request there was some uncertainty about the status of the California Registered Domestic Partner Rights and Responsibilities Act of 2003 (A.B. 205). That law is scheduled to be effective on January 2005 and will extend to appropriately registered domestic partners the same benefit eligibility that is currently extended to spouses. The City Attorney has advised that compliance with the new law is not optional.
No action is required by the City Council in order to comply with the law. Action would, however, be required if the Council decides to make any benefits available to employees with domestic partners prior to January 1, 2005. A formal resolution is required by CalPERS for medical benefits coverage. Other insurance providers do not require such a resolution.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City’s official notice bulletin board, posting of the agenda and report on the City’s web page, and the availability of the report in the Library and the City Clerk’s Office.
ALTERNATIVES
The following alternatives are available to the City Council:
1. Take no action and wait until California Registered Domestic Partner Rights and Responsibilities Act of 2003 becomes law on January 1, 2005.
2. Implement through a Council Resolution an earlier date to provide benefits for domestic partners of regular employees.
3. Other action as directed by Council.
Alternative 1 will allow all benefits that are currently available to spouses to be available to registered domestic partners as of January 1, 2005 without any action being taken by the City Council.
Alternative 2 could theoretically result in the same benefits being available to registered domestic partners earlier than January 1, 2005. However, this would require a formal resolution for medical insurance and a special open enrollment. It is unlikely that an open enrollment could be organized, conducted and the new enrollments processed for coverage to begin any sooner than January 1, 2005 because of the time required.
The cost implications of Alternatives 1 and 2 are the same.
RECOMMENDATION
Staff recommends Alternative 1 which requires no action on the part of the City Council.
Prepared by:
Myriam Castaneda
Human Resources Supervisor
Reviewed by:
Mark Gregersen
Director, Human Resources Department
Approved by:
Amy Chan
City Manager
Attachments
California Registered Domestic Partner Rights and Responsibilities Act of 2003 (pdf format)