Domestic Partnership Benefits Policy

Health Insurance Coverage for Domestic Partners (top)

Legislatively, the 72nd General Convention meeting in 1997 gave approval to the Episcopal Church Medical Trust to extend coverage to domestic partners. Legislative action and continuing theological reflection cannot be separated in this matter. We are a faith community that seeks to be a place where..."all are accepted and none are despised." our vision comes closest to fulfillment when we gather around the Eucharistic table. It is harder to give witness to a common walk of faith when we go forth into the world to do the work that Christ has given us to do. Most of us read the gospels and believe that the message of Jesus contained therein calls us to be agents of healing. Some of us hold that, in our hi-tech society, access to health care is both a way to respect the dignity of another human being and to share in providing one aspect of healing.

Diocesan Council on October 13, 1998, approved a policy allowing for domestic partner health insurance benefits for those on the diocesan plan. The Council also approved a definition of "domestic partners" to be used within the corporate life of the diocese, using the same definition recently enacted by the Executive Council of the National Church.

Effective January 1, 1999, the Diocese of Washington will make medical and dental coverage available to domestic partners of covered clergy and lay employees within the Diocese who request coverage.

Bishops and Council recognize that we are all not of one mine. Therefore, while domestic partners of those covered under our health insurance plan and who meet the requirements are eligible for health insurance coverage, it remains with the local vestry or mission committee to fund that coverage.

We have adopted the model definition of domestic partnership provided by the medical trust, but are not limited to it. In this diocese we have a common standard for all the faithful, gay-straight, young-old, male-female, wherein we aspire toward chastity in our singleness and monogamy in our intimate relationships. We are imperfect in an imperfect world and not all relationships endure. I do not give permission for clergy to enter a third marriage where there have been prior divorces and, as closely as possible, have the same expectation of gay and lesbian clergy. Our standards of chastity or monogamy and the vows of ordination speak against any ordained person co-habitating in an intimate relationship out of wedlock. The same standards are applicable to gay and lesbian clergy, canonically resident in the diocese or licensed to serve, but with the recognition that they do not have access to either civil or sacramental rites to give witness to a monogamous union.

Tax Issues

a. Imputed Income

Since a domestic partner is not a legal spouse for IRS purposes, the parish vestry is required to withhold taxes on the fair market value of the benefits provided to the domestic partner. The fair market value is defined by Treasury Regulation 1.61-21(b)(2) as the amount the individual would have to pay for the particular coverage in an arm's length transaction.

We can calculate the fair market value by subtracting the difference in what we pay in premiums between employee and spouse and employee only coverage. For example, under our current Capital Care health insurance plan, the employee and spouse premium per month is $603.00. The employee only rate is $302.00. Therefore, the imputed income for an employee enrolling a domestic partner on the group plan would be $301.00 per month, or $3,612.00 imputed income per year.

b. Tax exempt status

Though a domestic partner cannot be considered a ‘spouse', under certain circumstances, he or she might be considered a dependent under IRS Code 152.Code 152(a)(1) through (8) define certain relatives over half of whose support for the applicable tax year was received from the employee/taxpayer. However, Code 152(a)(9) describes an individual (other than a spouse) who receives over half of his or her support from the taxpayer, who is a member of the taxpayer's household, and whose principal place of residence is the home of the taxpayer.

If the domestic partner meets the above criteria, the employee would be exempt from taxes on the imputed income from the value of the domestic partner's coverage. Additionally, even if the domestic partner cannot be defined as a dependent, his or her children might be; thus the imputed value would only be for the rate assigned to employee and spouse coverage, not for employee and family.

c. Employer tax implications

The fair market value of the domestic partner's coverage includible in the employee's income is subject to federal, state, and FICA withholding and other applicable employment taxes. Parish subsidy of the domestic partner's coverage would generally be within the definition of "ordinary and necessary business expenses", as a part of an employee's compensation, and therefore deductible by the parish.

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