Why Should Companies Offer LGBT Benefits [DiversityInc-2009]

1. Why Should Companies Offer LGBT Benefits?
By Daryl C. Hannah
June 02, 2009
Ann-Marie Yap never planned to stay at Cisco Systems for a decade. She initially viewed her job as
vice president of information technology as a career steppingstone. So when the San Jose--based
tech company asked her to relocate from Atlanta to California, she saw it merely as an opportunity to
make a lot of money.
"Cisco [employees] had a reputation of working a lot of hours, and I knew I didn't want that," says
Yap. "I never wanted to work in Silicon Valley because of the culture. But I figured I would suck it up
for a few years after the company moved me to California, and then I'd do something else."
But Yap's desire to start a family with her partner prevented her from making a swift career move.
"After we realized that we wanted to start a family, we knew we couldn't afford the nearly $30,000 [in-
vitro fertilization] procedure," says Yap. "I began looking into the benefits Cisco offered and found out
that Cisco would pay a significant portion of the costs."
Thanks to Cisco's comprehensive benefits package, which includes medical insurance for in-vitro
fertilization, Amy, Yap's wife, was able to give birth to Anneke--which cost the couple only a $10
copay five years ago, despite the need for an emergency C-section. Anneke was then followed by
Arie, the couple's now-six-month-old. Total cost of the birth of Arie (including medical complications
for the baby): $1,500. Why the significant increase to give birth five years later? California laws for
same-sex couples who want children had changed, which reclassified the procedures covered under
Cisco's adoption and medical benefits for LGBT employees.
"Cisco's benefits … have kept me here longer than I expected," says Yap. "This is the most
comfortable I've ever felt with a company."
Key 'Life Balance' Tools
For progressive companies such as Cisco, No. 9 on The DiversityInc Top 10 Companies for LGBT
Employees list, offering same-sex domestic-partner benefits, gender-correction surgery and other
medical benefits have become key "life balance" tools for recruiting and retaining valued employees--
especially LGBT people. But they're also important for heterosexuals who seek out and are more
engaged at companies with inclusive workplace policies.
"Cisco approaches this issue from the point of view of helping all our employees achieve 'life
balance,' regardless of their sexual orientation," says Marilyn Nagel, director of inclusion and
diversity. "We see a positive correlation between flexibility and productivity, low attrition and a work
force equipped to meet the demands of a 24-hour global business environment."
In 2008, Cisco began offering coverage for eligible healthcare expenses related to transgender

2. support and surgery, covering 80 percent of the cost (after payment of the annual deductible) up to a
lifetime maximum benefit of $75,000.
Cisco didn't stop there. This March, the company rolled out a new tax-initiative program aimed at
reducing the tax burden gay and lesbian couples often incur if they are unable to get married because
their state does not allow same-sex marriage.
"This is still a relatively unique initiative … and we are encouraging other companies to adopt this
breakthrough practice for their employees in same-gender domestic partnerships," says Nagel.
Since 1982, when The Village Voice, a New York City weekly newspaper, became the first employer
to offer same-sex domestic-partner health-insurance benefits, an increasing number of companies
have begun offering them. For job seekers, such benefits have become the litmus test to determine
whether a company has an inclusive corporate culture or not.
All of The 2009 DiversityInc Top 50 Companies for Diversity® offer same-sex domestic-partner
benefits--a requirement to make our list. Also, 74 percent of these companies received a 100 percent
rating on the Human Rights Campaign (HRC) 2009 Corporate Equality Index (CEI), the national
analysis and rating of large U.S. employers' policies and practices pertaining to LGBT employees.
This compares with 52 percent in 2006 and 28 percent in 2004.
According to the CEI, 57 percent of Fortune 500 companies currently offer same-sex domestic-
partner benefits, up 43 percent from 2003. In addition, 75 percent of all Fortune 500 companies report
having at least one transgender-inclusive benefit this year, up 8 percent from 2008. "In the absence of
a federal law that prohibits workplace discrimination based on sexual orientation and gender identity
or expression, it is up to employers to take the lead and implement policies that ensure all their
employees are protected," said HRC President Joe Solmonese.
What's the ROI?
To answer this question, you have to look at two factors: the business case and the civil-rights issue.
The Business Case Companies often cite the cost of implementing same-sex domestic-partner
benefits as an excuse to deny extending coverage to the spouses/partners of LGBT employees
and/or to hide their perceived fear of backlash from consumers, employees and partners. In reality,
the cost is minimal.
A 2005 Hewitt Associates study of large U.S. employers found that 88 percent of the respondents that
introduced same-sex domestic-partner benefits experienced a financial impact of 2 percent or less.
What's more, only 5 percent of the companies surveyed experienced a financial impact of more than
3 percent.
The payoff of such programs clearly outweighs the costs. These companies report lower attrition
rates and reduced turnover costs and are able to recruit from a greater pool of candidates. Employers
that understand the financial burdens of LGBT people also understand the financial burdens of all
employees--and offer group benefits to retain them.
The 2007 "Study of Employee Benefits Trends" by MetLife, No. 43 in the DiversityInc Top 50, found:
• 80 percent of the respondents who were "highly satisfied" with their benefits also expressed strong
job satisfaction
• 70 percent of the respondents said their benefits package was the reason they joined their current

3. employer
• 83 percent of those surveyed said their benefits package was the reason they remained with their
current employer
Wells Fargo & Co. (No. 31 in the DiversityInc Top 50) saw a return on its benefits-package
investment five years ago when it recruited executive catch Stephanie Smith, now senior vice
president of online sales and marketing.
"I'd never work for a company that didn't support me," says Smith. "The fact that Wells Fargo
understands that my partner and family also need and deserve health benefits makes my job easier
because I don't have to worry about them."
Wells Fargo has historically maintained an inclusive culture, having protective policies for employees
from traditionally underrepresented groups since the late 1800s. The organization made its first LGBT
financial donation to the AIDS Project of Los Angeles as early as 1986. Today, the financial-services
institution offers inclusive health benefits for transgender employees, including pre- and post-
hormone therapy.
The Civil-Rights Issue Both corporations and employees recognize the positives of LGBT benefits.
Corporate leaders who have welcoming cultures realize that it's impossible to be a good company for
Blacks or women while discriminating against LGBT people. All employees must be treated equally.
Likewise, heterosexual employees who have LGBT friends and family members are advocating for
equal protections and health benefits in the workplace for all.
A 2007 Harris poll of 2,868 U.S. employees, of whom 350 self-identified as LGBT employees, found:
• 64 percent of employees support equal untaxed health-insurance benefits for same-sex partners
and spouses
• 56 percent agree that all employees should be granted transfers when their spouses or partners are
asked to relocate by employers
• 64 percent say the Medical Leave Act should apply to both heterosexual and same-sex couples
This study was conducted in conjunction with Out & Equal Workplace Advocates, a national
organization that measures LGBT workplace issues, and LGBT communications firm Witeck-Combs
Communications.
With the offering of benefits, progressive companies are undoubtedly leveling the playing field for
LGBT employees--but it's just the start. "Equal opportunity and benefits are not the only factors that
prospective employees should consider," says Solmonese. "They are vital to ensuring a business
values and respects its LGBT work force."