Businesses see no strain from new civil union law

Only routine changes needed to benefits programs and human resources procedures

By: Lauren Otis
   Businesses in the Princeton area say they do not foresee more than routine changes to their benefits programs and human resources procedures to accommodate New Jersey’s new civil union law.
   Many area employers already offer domestic partner benefits, and say their benefit costs will not increase as a result of the new state civil union law.
   New Jersey is the third state, after Vermont and Connecticut, to offer same-sex civil unions. Massachusetts is the only state to sanction same-sex marriages.
   There will be some need for New Jersey businesses to evaluate how the law affects them, and to make changes, but for the most part the impact should be small, said Stephen J. Hyland, an attorney with law offices in Westmont.
   In brief, partners in civil unions "are to be treated the same as a married couple," by a company, Mr. Hyland said. This includes people who have entered a civil union in another state, he added.
   "Clearly there is going to be some cost" to employers from the new law, Mr. Hyland said. However, "the estimate of the number of same-sex couples in New Jersey is 16,000 to 22,000, it’s not a huge number to begin with," Mr. Hyland said, so employers collectively are not likely to see a significant change in their health care outlays or benefits costs.
   Mr. Hyland said "there are a lot of very talented gay and lesbian employees out there" and, for competitive reasons, many New Jersey employers have already extended benefits to domestic partners of employees — a broader level of eligibility than civil union members — and so won’t be affected much at all by the new law.
   "I don’t really think it is going to change much," said Alan Shaw, president and chief executive officer of VaxInnate, a privately held Cranbury-based biotechnology company which develops vaccines and employs approximately 40. In VaxInnate’s policies and procedures "couples are couples, it doesn’t matter what they are made of," Mr. Shaw said.
   VaxInnate’s human resource function is handled by a third-party firm, so Mr. Shaw said of any changes needed in that realm, "I don’t think it will be a problem."
   The new state law will affect Princeton University’s existing domestic partner procedures to some degree, and the university is in the process of implementing the necessary changes, according to Lauren Robinson-Brown, a university spokeswoman. "We are reviewing our offerings to see that they are in line with the law," Ms. Robinson-Brown said.
   Because the university already offers domestic partnership benefits to its employees, any changes are likely to be "more a refinement" than anything substantial, she said. She cited the fact that federal tax law — where the value of domestic partner benefits are treated as "imputed income" and "bump up" employee income a little bit — now differs from state law on benefits reporting, an circumstance the university is addressing.
   The civil union law appears to fairly clearly affect "employment issues and policies governed by New Jersey law, such as workplace discrimination, workers’ compensation survivor’s benefits and leave under New Jersey’s Family Leave Act," according to an article posted on the Web site of the law firm Ballard Spahr Andrews & Ingersoll LLP, which has an office in Voorhees.
   Mr. Hyland said state versus federal jurisdiction over certain health and benefit plans may be one of the areas where there is a lack of clarity. Federal Employment Retirement Income Security Act (ERISA) covered employee retirement, pension or health and life benefit plans are federally regulated, and it is not currently clear whether the New Jersey Civil Union Act may pre-empt federal ERISA guidelines and to what degree, Mr. Hyland said.
   The Defense of Marriage Act of 1996 mandated that for federally-overseen employment-related issues marriage is defined as a union between a man and a woman, Mr. Hyland said, so in general an employee benefit which is governed by federal law is guided by this federal definition which doesn’t recognize same-sex unions.
   For New Jersey employers who sponsor self-insured health or life benefit plans, or any other employee spousal benefit where ERISA pre-empts state law, such as employee-sponsored pension benefits extended to spouses, they would not need to offer benefits to partners in civil unions if they didn’t wish to, according to a client alert issued by the law firm Proskauer Rose LLP, which has offices in Newark.
   "If an employer with a self-insured plan does not wish to cover civil union partners, the employer should carefully craft the definition of eligible persons in the plan to make that clear," stated the Proskauer Rose client alert. The alert went on to note, however, that "employers should bear in mind that the law is new and, therefore, the full impact of the law may not be apparent until guidance is provided by the courts or administrative agencies."
   "To the extent of the law we offer domestic partners the same benefits as spouses of married employees," said Laura Hortas, a spokeswoman for Bristol-Myers Squibb, which has a large facility in Lawrence. "For B-MS this is not going to have an impact on us because we already have a domestic partnership program which has been in place since 1989," Ms. Hortas said.
   In terms of costs related to updating employee human resources procedures and manuals, Ms. Hortas said there will probably be small changes required but "nothing significant."
   In an e-mail, Sheri Woodruff, a spokeswoman for West Windsor-based Tyco International wrote: "Tyco expects no impact on its health care expenses with New Jersey’s civil union legislation. We already offer coverage to domestic partners, just as we offer those benefits to opposite sex partners, at the same rates as spouses.
   "With respect to other benefits, we offer coverage to domestic partners (same as spouses) where legally permissible under federal and/or state regulations," Ms. Woodruff added.
   Michele Siekerka, president of the Mercer Regional Chamber of Commerce, said since the civil union law came into effect "we have not had too much feedback at all about this" from member organizations. There have been no member inquiries on the subject, or requests for chamber guidance, Ms. Siekerka said. "It has not been an issue."
   Although the directive to treat same sex couples in a civil union the same as married couples appears straightforward, Mr. Hyland said some care needs to be taken by employers to avoid potential liability. He said it may seem logical for an employer to ask for an employee to produce a copy of their new civil union license before extending benefits to their partner, but unless the company does this with married employees too — "in truth, how many people would be able to find a copy of their marriage license," he said — they are violating anti-discrimination statutes. So employers must ask for proof of a civil union or marriage from all employees, or none, he said.
   Another delicate area is general disclosure of an employee’s status, Mr. Hyland said. Even with identical offerings, if an employer distinguishes between married and civil union employees in employee postings or other disclosures, it may be unintentionally "outing" an employee in a civil union who may not want to disclose their sexual orientation at their workplace, he said.
   Rather than a separate packet and forms for civil unions, human resources departments might be better advised to create documents where appropriate sections are labeled "married slash civil union" in a way that preserves the privacy of the employee, Mr. Hyland said.
   In general liability terms, "as long as treatment is the same for married and civil union couples, then companies should be fine," he said.
   For more on the Web:The New Jersey Department of Health and Senior Services provides general information on the requirements for obtaining a civil union license. Go to:www.state.nj.us/health/vital/civilunion_apply.shtml.
   Some New Jersey law offices have posted initial guidance on the impact of the civil union law.They include:Proskauer Rose LLP at www.proskauer.com/index.htmlBallard Spahr Andrews & Ingersoll, LLP at www.ballardspahr.com/press/article.asp?ID=1587.