Domestic Partner Benefits No Longer Treated as Income in Healthcare Bill

From the Left: If you’re gay or lesbian, one of the significant aspects of the sweeping healthcare reform bill passed last night by the Democratic Congress is the change to the way domestic partner benefits are treated by the IRS.

Under current law, domestic partner benefits are treated as taxable income — a blatantly homophobic and discriminatory practice that exposes employees and the employer to higher tax liability.

Gay or lesbian employees with domestic partner benefits, on average paid $1,100 more in taxes than their straight coworker. Under the healthcare reform bill, such benefits are tax-free.

From personal experience regarding domestic partner benefits, I can report that adding Jim to my health plan, or Jim adding me to his health plan, exposes the other to roughly $5,000 a year in additional taxable income. Because of this, neither of us have added the other to our employer sponsored health plan. Over the years, I have written more than a dozen complaint letters to my Congressional representatives regarding this discriminatory practice.

In the words of Congressman Jim McDermott (D-WA):

“[The change] would correct a longstanding injustice, end a blatant inequity in the tax code and help make healthcare covergae more affordable for more Americans.”

I couldn’t agree more.