February 2004

On January 12, 2004, New Jersey Governor McGreevy signed the Domestic Partnership Act (“DPA”), which provides certain rights to unmarried homosexual couples, and heterosexual couples who are 62 years or older, and who satisfy certain standards indicating joint-support. To qualify as a domestic partnership, the couple must file an Affidavit of Domestic Partnership with their local registrar, and present evidence of interdependence, such as joint bank accounts, cohabitation, joint ownership of property, designation of one as the primary beneficiary of the other in a will, life insurance policy, or retirement plan, and state neither is presently married or in another domestic partnership or one that was terminated less than 180 days prior, and that both partners are over 18. If the applicants satisfy the aforementioned criteria, the registrar will issue a Certificate of Domestic Partnership, which will serve an analogous purpose to that of a marriage license.

The rights provided under the DPA include the right to visit a loved one in the hospital, the right to make medical decisions, to file for a state income tax deduction for dependents, a State inheritance tax exemption, and of most interest to employers, the right to medical insurance.

Specifically, the DPA requires that all commercial health and dental insurers modify their contracts to expand the definition of “dependent” to include “domestic partners”. Nevertheless, other than the State itself, employers, including private employers, county and local government, and boards of education may, but are not required to provide health insurance coverage to the domestic partners of their employees.

Employers who voluntarily offer insurance coverage for domestic partners are permitted to charge employees from 0 to 100% of the insurance premium cost for this coverage. (Note, however, that to avoid a violation of the non-discrimination requirements under HIPPA, the contribution charged for employees’ domestic partners should be consistent with what you presently charge to other similarly situated dependents, such as employee’s spouses.) The DPA also extends to domestic partners New Jersey “mini-COBRA” which requires employers with plans of less than 50 employees to provide benefit continue for 12 months following termination of employment. Employers with 20 or more employees are covered by COBRA, which does not protect domestic partners, so all employers of 50 or fewer employees who offer insurance benefits to domestic partners also should provide post-termination benefit continuation to domestic partners for 12 months following loss of coverage.

Finally, the DPA amends the New Jersey Law Against Discrimination, which prohibits discrimination in employment and housing, etc., to include domestic partnership as a protected status.

RECOMMENDATIONS

Given this change in the law, employers are likely to feel some increased pressure from employees to offer medical insurance to domestic partners of your employees. The choice rests solely with the employer, however, if you decide to offer such coverage, we recommend that you offer it under the same terms as you presently offer other dependent coverage (e.g., employees contribute the same percentage of the premium for domestic partners as spouses or other dependents). In addition, if you elect to provide insurance to domestic partners, you should modify your COBRA policy to include 12 months of post-termination benefit continuation for domestic partners in New Jersey.

Finally, all employers should amend their non-discrimination and workplace harassment policies to include domestic partnership status in the list of protected statuses. The DPA will become effective on July 12, 2004.