2 large insurance providers join Aetna in offering plans that cover same-sex partners to businesses with fewer than 50 employees
Small businesses in the Lone Star State now have more options for offering health insurance to employees’ domestic partners in Texas, after both Blue Cross Blue Shield of Texas and Humana were approved to provide them in 2013.
BCBSTX is the largest health insurance provider in Texas, and the change could allow thousands of gay and lesbian employees at small businesses across the state to insure their partners. Until this year, only Aetna offered a policy to small businesses to allow their employees to add same-sex partners to health insurance coverage in Texas.
Margaret Jarvis, a spokeswoman for BCBSTX, said the company regularly reviews the benefits it offers to ensure it is meeting customer needs. Until this year, BCBSTX offered DP benefits only to employers with 51 or more employees.
While one employer reported being told by an insurance company that DP benefits violate state law, Jarvis said there are no legal barriers to offering them.
“It’s no more difficult than adding any new service or product,” she said.
While Aetna offered a policy, without competition from other insurance companies the benefit was largely unaffordable.
“The rate for our group was not competitive, and completely unaffordable,” said Dallas Voice Publisher Robert Moore.
Thanks to BCBSTX’s decision to offer DP benefits to businesses with fewer than 51 employees, Dallas Voice will begin offering them in 2013.
“Our health insurance rates rose for 2013, but the rise was much smaller than I anticipated based on the last few years and I can in no way attribute the rise to the addition of domestic partner benefits,” Moore said. “It’s important to us as an employer to offer DP benefits.”
Bob Witeck, president of Washington, D.C.-based Witeck Communications Inc., reached out to BCBSTX earlier this year after being contacted about the issue by Dallas Voice. The newspaper pointed out that some insurance companies that received a 100 percent rating on the Human Rights Campaign’s Corporate Equality Index were not offering DP benefits to small businesses in Texas.
Witeck’s public relations firm works with companies on LGBT social and marketing issues. He had a similar experience locally in his company and has worked with companies, including American Airlines, on partnership issues across the country.
Witeck said offering the policies makes sense for insurance companies because they will add customers. And employers who offer that benefit will make more employees happy.
Originally, the fear among insurance companies was cost and possible backlash from conservative customers, Witeck said. Insurance companies had no actuarial figures and worried that they would mostly be covering people with AIDS, he said.
Witeck said the main stumbling block he’s seen are state regulators. Every benefit offered must be approved by the state insurance commission.
Without approval, Blue Cross Blue Shield couldn’t offer partner benefits.
“Regulators have to bless policies,” Witeck said.
In Virginia, where Witeck lives, he said until the Supreme Court’s ruling in Lawrence v. Texas overturned the sodomy law, regulators refused to allow insurance companies to offer DP benefits.
Several years ago, the issue arose at Equality Texas. Executive Director Chuck Smith said the organization had an employee who wanted to cover his partner. The organization’s health insurer Humana did not offer the benefit.
“They took the position that they were legally prevented,” Smith said.
He added that Equality Texas hasn’t pursued the issue since then because it doesn’t have any employees seeking DP benefits.
Ross McLerran, a Humana spokesman, said his company will also begin offering DP benefits to small businesses in Texas in 2013.
According to a Human Right Campaign study, the experience of most companies offering benefits to same-sex partners is a lower cost of insurance.
The cost of AIDS medications for gay male couples is offset by the lack of the HIV virus among lesbian couples and the fact that gay and lesbian couples have much lower rates of pregnancy, which is an expensive healthcare cost.
The slow pace of insurers adding partner benefits for small companies may be due, in part, to the market not being very large. HRC statistics show that only about 1 percent of eligible employees take advantage of those benefits.
Because of the Defense of Marriage Act, partner benefits are taxed as income, while spousal benefits are not. So taking advantage of partner benefits can be costly.
In many gay and lesbian relationships, both people work at jobs where they’re covered by insurance so partner benefits aren’t accessed.
On its website HealthCare.gov, the U.S. Department of Health and Human services has added policies with partnership benefits as a searchable option. Under Texas, only Aetna is currently listed. BCBSTX has not yet been added. The change was implemented as part of the Affordable Care Act to help LGBT people find coverage.
This article appeared in the Dallas Voice print edition December 21, 2012.