BILL ANALYSIS                                                                                                                                                                                                    






               SENATE COMMITTEE ON INSURANCE
             Senator Herschel Rosenthal, Chair


AB 1059 (Migden)                    Hearing Date:  July 2,  
1997

As Amended:     May 23, 1997
Fiscal:         Yes

  SUMMARY

  AB 1059 would require health plans and health insurers that  
offer group coverage benefits to the dependents of an  
employee or subscriber to offer those benefits on the same  
terms to a  domestic partner  .
  
DIGEST

Existing law
  
 1.  Provides for health insurance and health care benefits  
    to spouses and dependents in a number of areas.

2.  Prohibits discrimination based on marital status or  
    sexual orientation in a number of contexts, including  
    insurance.
 
This bill

     Would require health plans and health insurers that  
    provide group coverage to provide the same benefits to  
    the domestic partner of a subscriber or employee as  
    they provide to dependents.

  COMMENTS

  1.   Purpose of the bill  .  The author introduced AB 1059 to  
address the health insurance concerns of unmarried couples.  
 The Unruh Civil Rights Act, as well as an explicit  
regulation applicable to the business of insurance,  
prohibits discrimination based on an individual's marital  
status or sexual orientation.  Yet some health plans  
currently offer benefits to spouses that are not available  
to a person's unmarried partner.  This problem is  
particularly acute for same-sex couples who cannot have  









their relationships recognized as marriages.  Elderly  
couples who form committed and exclusive relationships  
share a similar problem.  AB 1059 helps resolve the current  
inequity in law with respect to health benefits.  Unmarried  
couples will not be denied access to health benefits for  
their partner solely because of their sexual orientation or  
marital status.
    The author argues that more than a decade of experience  
with domestic partnership demonstrates that it is both  
  pro-civil rights  and  pro-business  .  A fast-growing list of  
businesses is 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.

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 Task Force report 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, for example, IBM, Apple  
Computer, Disney, Bank of America, Genentech, Orrick, Time  
Warner and, most recently, the 
San Francisco 49ers, provide such benefits.

    But while many health plans offer this coverage to  
large employers, they often deny the benefit to smaller  
employers, with Kaiser being a notable exception.  There  
appears to be no economic basis for excluding this  
coverage.  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 costs for spousal coverage.  Employer  
fears of huge numbers of fraudulent claims also proved  
groundless.










3.   Support  .  Supporters present legal, health, social,  
religious and economic arguments in favor of the measure.   
On  economic  grounds, Spectrum Institute (SI) notes that  
virtually all the business-centered fears initially  
expressed about domestic partnership have failed to  
materialize. Experience has shown that the cost of  
providing domestic partner benefits is the same as or less  
than that of providing spousal benefits.

    Smaller employers who want to compete for employees  
have a hard time finding insurers who will offer this  
coverage.  The City and County of San Francisco cites the  
difficulties employers face in offering domestic partner  
health coverage because it is unavailable or too expensive.  
 SI notes that this bill will make it easier for small  
businesses to compete for a valuable pool of employees.

    Citing  religious  reasons in support, clergy from both  
the Protestant and Roman Catholic communities note that  
both the Old and New Testaments recognize a number of  
family forms.  They argue it is possible to support the  
bill on moral, and specifically, on Biblical grounds.   
Moreover, they maintain that it is fundamentally just and  
right that all persons have access to health coverage.  The  
Life Lobby and the California Nurses Association emphasize  
the  social  importance of partnership to provide mutual  
protection.  Because of the inability to enter a recognized  
marriage under state law, committed same-sex couples have  
long struggled within the legal system to protect one  
another.  The societal expectation that, when one partner  
has a job, the other will be covered for health costs  
breaks down with same-sex couples.  This not only creates  
hardships for both partners, but exacts a cost to the  
state.  The state may be called upon to pick up the costs  
for the uninsured domestic partner.  Various supporters  
also present the  legal  argument that AB 1059 is a matter of  
civil rights and equal protection under the law.

4.   Opposition  .  The Committee on Moral Concerns opposes  
the bill emphasizing 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 permanency 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 the 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, loss of jobs and insurance  
coverage for other workers.  Fifth, the historical family  
arrangement works best for society.  The Capitol Resource  
Institute opposes AB 1059 because it would force insurance  
companies to offer domestic partner benefits to employers,  
which they can already do.

5.   Related legislation  .  Two current bills deal with  
benefits for domestic partners.  AB 427 (Knox), in the  
Assembly PERS Committee, provides employers whose employees  
participate in the CalPERS health care program  the option  
to extend health benefits coverage to the domestic partners  
of their employees and annuitants; and SB 841 (Hayden), in  
the Senate Judiciary Committee, would prohibit a public  
entity from contracting with a contractor that  
discriminates in its provisions of benefits to employees  
with spouses and employees with domestic partners.

































  POSITIONS

Support
  
Aids Project Los Angeles
California Church IMPACT
California Labor Federation, AFL-CIO
California Nurses Association
California Optometric Association
California School Employees Association
California Teachers Association
California Women's Law Center
City of Berkeley
City and County of San Francisco
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  
    Diocese of Northern California, La Mission 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
East Bay Municipal Utility District
Kaiser Permanente Medical Care Program
LIFE Lobby
Older Women's League of California
Santa Barbara Stonewall Democratic Club
Spectrum Institute
Unity Pride Coalition of Ventura County  
  Several Individuals

  Oppose
  
Capitol Resource Institute
Committee on Moral Concerns
Several Individuals











Consultant:   Beverly Hunter