(April 2001) In June 2000, the Big Three U.S. automakers — General Motors, Ford, and DaimlerChrysler — announced they would offer domestic partner health care benefits to their more than 400,000 employees. Giving nonmarried partners access to the same benefits as spouses marks a growing trend across a wide variety of industries in both the public and private sectors in the United States. In the past year, according to the Human Rights Campaign, the number of Fortune 500 companies offering domestic partner benefits increased from 70 to 102.
While increasing numbers of employers are offering these benefits to both same-sex and opposite-sex couples, there is limited information about the additional expenses incurred as a result. Clearly, one important factor in assessing this added expense is the extent to which employees will use the domestic partnership benefit, known as the “take-up” rate. On average, how many workers will request domestic partner benefits?
While statistics on heterosexual cohabitation rates are fairly widely available, little has been recorded about same-sex couples. For the first time in 1990, U.S. census data allowed for the identification of both same-sex and opposite-sex couples as “unmarried partners” — different from “roommates” or “unrelated adults.” Researchers from Carnegie Mellon University and the University of Kentucky used the census, along with data from the General Social Survey and the National Health and Social Life Survey, to provide a detailed demographic portrait of the gay and lesbian population. Building on that work, along with other calculations from the census data, we can estimate an average take-up rate for domestic partner benefits in the United States.
The researchers estimated, based on the percentage of men and women who had exclusively same-sex partners during the year before the census, that approximately 2.5 percent of the male population and 1.4 percent of the female population are gay men and lesbians, respectively. In addition, an estimated 29 percent of gay men and 44 percent of lesbians currently have partners. If we assume that a company has 10,000 employees, split evenly between men and women, approximately 36 men (5,000 x 0.025 x 0.29) and 31 women (5,000 x 0.014 x 0.44) would be in same-sex partnerships and potentially eligible for domestic partner benefits. However, the actual take-up rate would likely be much lower, since a large number of same-sex partners are employed full-time and have individual benefits from their employers. Census data (the percentage who reported working more than 35 hours in an average work week during the previous year) suggest that 85 percent of women in lesbian partnerships and 89 percent of men in gay partnerships are employed full-time. If we assume that 80 percent of those in full-time employment have individual benefits from their employers, then only 10 men (36 — [36 x 0.89 x 0.8]) and 10 women (31 — [31 x 0.85 x 0.8]) are likely to request same-sex benefits in our hypothetical company (0.2 percent of the work force). As for opposite-sex partnerships, census data show that 4 percent of the population are in heterosexual unmarried partnerships. Of this group, 91 percent of the men and 81 percent of the women are employed full-time. Using the assumptions made above, this suggests that 54 men and 70 women would request benefits. Combining our estimates of same-sex and opposite-sex domestic partners, we would expect our hypothetical company to have a take-up rate of 1.4 percent (see figure).
Projected Take–Up Rate for Domestic Partner Benefits in the United States
Sources: Author’s calculations based on 1990 census data; and D. Black, G. Gates, S. Sanders, and L. Taylor, Demography 37, no. 2 (2000).
Interestingly, this estimate is consistent with take-up rates for same-sex benefits reported last year by labor economist M.V. Lee Badgett. A survey of public employers found an average rate of 2.1 percent, while a survey of private employers found most reporting a 1 percent rate. Clearly, numerous factors could affect the actual take-up rate for any given organization. Using census data could allow for more precise estimates of take-up rates because respondents are asked about what industry they are employed in and provide their age, education level, and location.
These estimates of take-up rates suggest that a very small portion of employees would avail themselves of domestic partner benefits. While determining the total cost of these benefits includes other factors (like the health profiles of new participants), these data suggest that the costs associated with adding domestic partner benefits are most likely quite small. And the gains from fostering an inclusive, open environment could be great.
Gary J. Gates is a research associate in the Population Studies Center of the Urban Institute in Washington, D.C.
For More Information
Dan Black, Gary Gates, Seth Sanders, and Lowell Taylor, “Demographics of the Gay and Lesbian Population in the United States: Evidence from Available Systematic Data Sources,” Demography 37, no. 2 :139-154 (2000).
Daryl Herrschaft and Kim I. Mills, The State of the Workplace (Washington, DC: Human Rights Campaign, 2000). Available online at: www.hrc.org.
M.V. Lee Badgett, “Calculating Costs with Credibility: Health Care Benefits for Domestic Partners,” Angles 5 no. 1: 1-8 (Institute for Gay and Lesbian Strategic Studies, 2000). Available online at: www.iglss.org.