Business Coalition for
Benefits Tax Equity
Tax Equity for Health Plan
Beneficiaries Act of 2009
(H.R. 2625 & S. 1153)
November 3, 2009

Partner Benefits
286 Fortune 500 companies offer
health benefits to employees’
domestic partners 265
286
216
124
21
2
1990 1995 2000 2004 2006 2008
Business Coalition for Benefits Tax Equity November 3, 2009

Issue: The Tax Burden
for Partner Benefits
Federal Law treats
• Spousal health coverage as tax-exempt
wages/income
• Partner health coverage as taxable
wages/income
Increases Employer Payroll Tax
and Employee Income Tax burdens
Business Coalition for Benefits Tax Equity November 3, 2009

Issue: The Tax Burden
for Partner Benefits
In Numbers...
Employee with a Employee with a
Single Employee Spouse Domestic Partner
Annual Employee Salary $32,000 $32,000 $32,000
Monthly Employer $335 $907 $907
Contributions for Benefits
Annualized $4,020 $10,884 $10,884
10,884 - 4,020 =
Imputed Income -0- -0- $6,864
32,000 + 6,864 =
Taxable Income $32,000 $32,000 $38,864
Employee’s 2006 Tax
Liability $3,155 $3,155 $4,710
Domestic partner vs. spousal benefits:
nearly 50% increase in tax liability
Business Coalition for Benefits Tax Equity November 3, 2009

Tax Equity for Health Plan
Beneficiaries Act
• Would end the tax inequities that apply
to employer-provided health insurance
for domestic partners
– House: Introduced 5/21/2009
• Rep. Jim McDermott (D-WA)
• Rep. Ileana Ros-Lehtinen (R-FL)
– Senate: Introduced 5/21/2009
• Sen. Chuck Schumer (D-NY)
Business Coalition for Benefits Tax Equity November 3, 2009

Business Case for Support
• Eliminates unfair taxation
that hurts your bottom line and places an extra
financial burden on employees
• Eliminates administrative burdens
of separate record keeping and imputed income
calculations for partner benefits
• Reinforces corporate reputation
as a champion of workplace fairness
– Drive recruitment and retention of dedicated,
fair-minded employees
Business Coalition for Benefits Tax Equity November 3, 2009

Join the Business Coalition
“attract and retainhealth benefits have beenworkforce, of our effort to
Domestic partner
a qualified and diverse
a key part
and we are
pleased to support Representative McDermott’s legislation that would
end the tax penalties we and our employees face when we make
these benefits available.
”
– Julie Fasone Holder, corporate vice president for human resources, diversity & inclusion
and public affairs at the Dow Chemical Company
Business Coalition for Benefits Tax Equity November 3, 2009

More than 60 businesses support...
Aetna, Hartford, CT Diageo North America, Norwalk, CT MillerCoors Brewing Co., Chicago, IL
A.H. Wilder Foundation, St. Paul, MN The Dow Chemical Co., Midland, MI Moody's Corp., New York, NY
Alcoa Inc., Pittsburgh, PA Eastman Kodak Co., Rochester, NY Morgan Stanley, New York, NY
AMR Corp. (American Airlines), Ft. Worth, TX ERISA Industry Committee, Washington, DC Motorola, Schaumburg, IL
American Benefits Council, Washington, DC Ernst & Young, New York, NY Nationwide, Columbus, OH
Ameriprise Financial Inc., Minneapolis, MN Exelon Corp., Chicago, IL Nike Inc., Beaverton, OR
Bausch & Lomb Inc., Rochester, NY General Mills Inc., Minneapolis, MN PG&E Corp., San Francisco, CA
Best Buy Co. Inc., Richfield, MN GlaxoSmithKline plc, Philadelphia, PA PricewaterhouseCoopers, New York, NY
Bingham McCutchen LLP, Boston, MA Herman Miller Inc., Zeeland, MI Project for Pride in Living, Minneapolis, MN
BlueCross BlueShield of MN, Eagan, MN Hewlett-Packard Co., Palo Alto, CA Prudential Financial, Newark, NJ
Boehringer Ingelheim USA Corp, Ridgefield, CT HSBC North America, Prospect Heights, IL Quorum Review Inc., Seattle, WA
Capital One Financial Corp., Falls Church, VA IBM Corp., Armonk, NY Replacements Ltd., Greensboro, NC
Carlson Companies, Minneapolis, MN ICMA Retirement Corp., Washington, DC Russell Investment Group, Tacoma, WA
Charles Schwab & Co Inc., San Francisco, CA Intel Corp., Santa Clara, CA Sempra Energy, San Diego, CA
The Chubb Corp., Warren, NJ J.P. Morgan Chase & Co., New York, NY Society for Human Resource Management (SHRM),
Citigroup Inc., New York, NY KPMG LLP, New York, NY Alexandria, VA
CNA Insurance, Chicago, IL Levi Strauss & Co., San Francisco, CA State Street Corp., Boston, MA
College & University Professional Association Marriott International Inc., Bethesda, MD Texas Instruments, Dallas, TX
for Human Resources, Knoxville, TN Massachusetts Mutual Life Insurance Co., Springfield, Thomson Reuters, New York, NY
Corning Inc., Corning, NY MA TIAA-CREF, New York, NY
Cullen Weston Pines & Bach LLP, Madison, WI Medtronic Inc., Minneapolis, MN Time Warner Inc., New York, NY
Day One, South Portland, ME Merck & Co. Inc., New York, NY Verizon Communications Inc., New York, NY
Deloitte LLP, New York, NY MetLife Inc., New York, NY World at Work, Washington, DC
Delta Air Lines Inc., Atlanta, GA Microsoft Corp., Redmond, WA Xerox Corp., Rochester, NY
Business Coalition for Benefits Tax Equity November 3, 2009

Business Coalition for Benefits
Tax Equity
• www.hrc.org/bcbte for latest information
• Contact Jamey Delaplane of Davis &
Harman LLP (202) 662-2294 to join
• E-mail workplace@hrc.org for a copy of
these slides
Business Coalition for Benefits Tax Equity November 3, 2009