BILL ANALYSIS
AB 1059
Page 1
Date of Hearing: April 15, 1997
ASSEMBLY COMMITTEE ON INSURANCE
Liz Figueroa, Chair
AB 1059 (Migden) - As Amended April 10, 1997
SUBJECT : Health coverage; domestic partners
SUMMARY : AB 1059 would require health plans that offer benefits
to the dependents of an employee or subscriber to offer those
benefits on the same terms to a domestic partner. Specifically,
this bill :
1) Requires group health care service contracts to provide the
same benefits to the domestic partner of a subscriber or
employee as they provide to dependents.
2) Defines "domestic partnership" as an intimate and committed
relationship of mutual caring in which the partners have a
common residence and are jointly responsible for each other's
basic living expenses; that neither partner is married or a
member of another domestic partnership; nor are they related by
blood in a way that would prevent them from being married under
California law; and are at least 18 years of age.
3) Establishes a domestic partnership registry operated by the
Secretary of State financed by the fees charged for
registration, in conformity with AB 54 (Murray) which passed
out of the Assembly Judiciary Committee on April 2.
EXISTING LAW :
1) States that a legal marriage can only exist between members of
the opposite sex.
2) Provides for benefits to spouses and dependents in a number of
areas, including health care.
3) Prohibits discrimination based on marital status and sexual
orientation in a number of contexts, including the provision of
insurance, but appears in some cases to permit discrimination
against domestic partners.
FISCAL EFFECT : Unknown. The bill does not require any employer
to provide domestic partner benefits.
COMMENTS :
1) Purpose of the bill : The author introduced AB 1059 to address
the paradox current law poses for unmarried couples. The Unruh
Civil Rights Act, as well as an explicit regulation applicable to
the business of insurance, provide that no Californians will be
discriminated against based on their marital status or sexual
orientation. Yet health plans currently offer benefits to spouses
that are not available to a person's unmarried partner. This
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paradox is particularly acute for same-sex couples, who are
prohibited from having their committed and exclusive relationships
recognized as marriages. A court case ( Beaty v. Truck Ins.
Exchange
(1992) 6 Cal.App.4th 1455) appears to permit this under the Unruh
Act. Elderly couples who form committed and caring relationships
share a similar problem. AB 1059 helps resolve the current
conflict in law with respect to health benefits. Unmarried
couples who meet specific legal requirements will not be denied
access to health benefits for their partner solely because of
their sexual orientation or marital status.
2) Background : In 1984, the City of Berkeley was the first
employer in the country to offer benefits to the domestic partners
of its employees. In 1993, the Insurance Commissioner convened a
task force to address the problem of unfair insurance
discrimination against unmarried consumers. The report of that
task force pointed out the discrimination that exists, and
recommended recognition of domestic partnerships for insurance
purposes. Now over 500 employers, including cities, states,
universities and private sector businesses (e.g., IBM, Apple
Computer, Disney, Bank of America, Genentech, Montefiori Medical
Center, Orrick, Herrington & Sutcliffe, Time Warner and, most
recently, the San Francisco 49ers organization) provide such
benefits.
But while many health plans offer this coverage to large
employers, they deny the benefit to smaller employers, with
Kaiser being a notable exception. It is becoming clearer this
has no economic basis. In a number of cases, employers and
insurers initially included a surcharge on domestic partnership
coverage to address any potential adverse economic impact.
Such surcharges have almost universally been dropped as
experience shows that costs for domestic partners are nearly
identical to (and in some cases less than) costs for spousal
coverage. Employer fears of huge numbers of fraudulent claims
also proved groundless, as reported by the International
Foundation of Employee Benefit Plans.
3) Related Legislation : A current bill, AB 54 (Murray), which
would include the registry that this bill also utilizes, passed
the Assembly Judiciary Committee 10-4 on April 2. Two other
current bills deal with benefits for domestic partners. AB 427
(Knox) is awaiting hearing in the PERS Committee. SB 841
(Hayden) is set for hearing in the Senate Judiciary Committee
on April 22.
Prior similar legislation includes AB 2810 (Katz) (1994) (held
in Assembly Judiciary Committee); AB 627 (Katz) (1995) (held in
Assembly Judiciary Committee); SB 1159 (Hayden) and AB 1209
(Knox) (1995) (voted down in PERS Committee); AB 3332 (Kuehl)
(1996) (voted down in PERS Committee).
4) Support : The author argues that more than a decade of
experience with domestic partnership demonstrates that it is both
pro-civil rights and pro-business. It is for this reason that a
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fast-growing list of businesses are now offering domestic partner
benefits to their employees, including some insurance companies.
It is mostly smaller businesses that this bill would assist, which
is why the bill is intended to cover the Health Insurance Plan of
California (HIPC). The author acknowledges moral differences in
the discussion of domestic partnership, and concerning same-sex
couples in particular, but points out that nearly all religious
denominations are re-examining their position on same-sex couples.
She notes that more and more denominations are able to articulate
a moral argument in favor of committed, loving relationships
between two adults, and that this moral argument specifically
applies to couples of the same sex.
An array of clergy from both the Protestant and Roman Catholic
communities
also acknowledge those who oppose any recognition of domestic
partners on moral grounds, but offer another view. They note that
both the Old and New Testaments recognize a number of family
forms, all centering around the concept of the household, and that
those who live together in domestic partnerships would be able to
meet such a conception of family. Thus, they argue, it is
possible to support the bill on moral, and specifically, on
Biblical grounds. For this reason they offer their own support of
the bill. Moreover, they argue, it is fundamentally just and
right that all persons have access to health insurance.
The Spectrum Institute (SI) from Los Angeles supports the bill
on economic grounds. SI notes that virtually all of the
business-centered fears initially expressed about domestic
partnership have failed to materialize. Surcharges by insurers
and employers were dropped when no adverse claims experience
developed; no unmanageable influx of applicants materialized,
with, on average, only about 1% of employees signing up for
such benefits when offered; to date, thirteen years after
introduction of domestic partner benefits, there have been
virtually no claims of couples fraudulently signing up for
benefits; and experience has shown that the cost of providing
domestic partner benefits is the same as, or, in some cases,
less than that of providing spousal benefits. In addition, SI
notes the recent Field Poll showing that while a majority of
Californians still oppose same-sex marriage, 59% of
Californians support domestic partner benefits such as pensions
and health coverage, and 67% approve of domestic partners
receiving non-economic benefits such as hospital visitation and
conservatorship.
Finally, SI notes that the bill will make it easier for small
businesses to compete for a valuable pool of employees. Over
500 employers, including some of the most prominent in the
nation, now include domestic partner benefits. Smaller
employers who want to compete for employees have a hard time
finding insurers who will offer the coverage. The San
Francisco Chamber of Commerce explicitly made this point in a
press release regarding that city's contractor law, noting that
the availability of insurance covering domestic partners at
competitive rates was "a major hurdle for companies" wanting to
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purchase the coverage.
LIFE Lobby urges that, because of the inability to enter a
recognized marriage under state law, committed same-sex couples
in particular have long had to struggle within the legal system
to protect one another. This not only creates hardships for
both partners, but exacts a cost to the state. Where only one
partner works or has a job that provides health coverage, the
societal expectation is that, by virtue of their commitment to
one another, both partners will be covered for health costs.
But by limiting such coverage only to legally defined spouses,
the state ends up providing health care for the non-working
partner in such relationships. Many, if not most of such
couples view themselves as spouses, and hold themselves out to
the world as partnered. The state's continued refusal to
recognize such relationships, according to LIFE, is thus poor
public policy that this bill can correct.
5) Opposition : The Committee on Moral Concerns makes five
points. First, homosexual couples are simply friends, and should
not be viewed as dependent on one another irrespective of their
own assessment of the importance, intimacy and permanence of their
relationship. Second, heterosexual couples who are unwilling to
commit to a marital relationship should not be given taxpayer
recognition. Third, roommates might sign up for these benefits,
and the constitutional right to privacy
would prevent government from determining whether their
relationship was more than just casual. Fourth, the cost to
employers of domestic partnership benefits would result in lower
wages, higher prices, elimination of jobs, and reduction in
insurance coverage for other workers. Fifth, the historical
family arrangement works best for society.
6) Proposed Amendments : The California Association of HMOs
proposes (1) that the requirements for domestic partnership
include a provision that after termination of a domestic
partnership, an employee may not register another domestic
partner until a minimum of six months after termination; (2)
that domestic partners be registered with a state or county
agency (a concern addressed in the Legislative Counsel
amendments in the current bill); (3) that domestic partners
have an obligation to file a notice of termination of the
partnership within 30 days of termination; and (4) that the
facts constituting the basis of the partnership be certified in
writing.
SUPPORT : California School Employees Association
California Teachers Association
Clergy:
John P. Bingham, Samaritan Counseling Center
Vincent Brady, Cathedral of the Blessed Sacrament
Donald G. Brown, Trinity Episcopal Cathedral
Carol M. Carter, Wesley United Methodist, First United
Methodist
Catherine M. Campbell, Hispanic Office, Episcopal
Dioscese of
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Northern California, La Mision Hispana el Divino
Salvador
Barry F. Cavaghan, United Campus Ministry
Steven Fietz, First Christian Church
George E. Herbert, Westminster Presbyterian Church
George K. Meier, Pioneer Congregational Church
Jay K. Pierce, Central United Methodist Church
Carlos Schneider, St. John's Lutheran Church
Congress of California Seniors
LIFE Lobby
Santa Barbara Stonewall Democratic Club
Spectrum Institute
Unity Pride Coalition of Ventura County
OPPOSITION : Committee on Moral Concerns
Four individuals
Analysis prepared by : David Link / ains / (916) 445-9160