Mr. Chad Griffin President
Human Rights Campaign
1640 Rhode Island Avenue NW
Washington, DC 20036
Dear Mr. Griffin,
We are writing about some of the new criteria added to the 2019 Corporate Equality Index (CEI) announced by the Human Rights Campaign (HRC).
Our organization, The ERISA Industry Committee (ERIC), applauds the HRC’s successes in the advancement of LGBTQ inclusion and equality in workplaces across the country. The CEI – as the national benchmarking tool on corporate policies and practices related to domestic partner benefits and LGBT –inclusive employment practices –has encouraged businesses across all industries to strive for creating more inclusive work environments. We would like to share concerns regarding the 2019 CEI Survey criteria related to providing equivalent health care & retirement benefits to spouses and partners.
ERIC is the only national association that advocates exclusively for the nation’s biggest employers to create the best-possible policy environment for health, retirement, and compensation plans at the federal, state, and local levels. ERIC members have been voluntarily providing health and retirement plans for workers and families for decades. Across the country they work hard to advance health and economic wellness as well as retirement security, provide paid leave, and improve health care quality and lower costs. ERIC’s members have been at the forefront of ensuring their employee benefit programs are equally available to all employees and their families no matter their sexual orientation. Our members were some of the first large, private sector employers to provide same-sex domestic partner health care benefits decades prior to marriage equality. Our members understand that employee happiness and fulfillment fuels productivity and increases talent retention. They take seriously their role as good corporate citizens and have a desire to advance LGBTQ inclusion and equality in the work environment.
Starting in 2002, the CEI has evaluated and ranked employers on domestic partner benefits and LGBTQ-inclusive employment practices and policies. Over the past several years, a substantial number of ERIC’s members have consistently scored a perfect 100 rating on the CEI, with the remaining members also achieving a very high rating. Our members strive for a high score to show their commitment to LGBTQ equality in the workplace and attract and retain the most talented workforce possible. In prior years, when HRC added new criteria to the CEI rating system, companies readily adopted these recommendations. For the most part, the new criteria required a change in corporate policies without imposing a significant financial burden on a company. This is not the case with respect to the proposed criteria adjustments for the 2019 CEI Survey. It will be extremely difficult for many employers to apply the new criteria by 2019, and it will impose a significant cost increase for certain benefit programs—costs that were not built into the fiscal plan for most companies.
ERIC members support the addition of new criteria to reflect legal developments and societal progress, and they do not stand in opposition; however, it is not feasible for large companies to make the necessary changes before the new survey takes effect for 2019. For example, the addition of opposite-sex domestic partner benefits to health plans alone will cost millions of dollars in additional expense to health care plans per employer. Large employers design their benefit programs and forecast benefit costs and changes many years in advance.
In addition to the unplanned costs, it can take several years to implement new benefits. As you know, same-sex and opposite-sex domestic partner benefits are complex to administer, especially given the unfavorable tax treatment of benefits for non-dependent partners under federal and certain state laws. Employers need time to develop administrative processes to track dependent status and properly tax these benefits. In addition, employers want to have resources in place to help educate employees on the individual tax implications of such benefits and properly respond to employee inquiries.
The 2019 criteria also require employers with active defined benefit pension plans to extend survivor annuities to an employee’s same-sex or opposite-sex domestic partner. Employers incur additional plan costs and funding requirements as the result of extending the equivalent of a qualified pre- retirement spousal death benefit to the domestic partner of an employee who dies prior to benefit commencement. Employers also need time to work with their plan actuaries and plan administrators to add these survivor benefits.
To satisfy these new criteria for 2019, employers will need to implement the changes immediately, which is not feasible. Additional time is needed to plan for the administrative and financial impact that these changes necessitate, and that is why we request that these changes be delayed until 2020, which would give companies adequate time to make the necessary modifications to their plans and policies. We respectfully request a meeting to discuss this proposal as well as provide input on the process involved in making changes to benefit programs at large employers.
We appreciate you accepting our input on this important issue and hope to have further discussions on how to make America’s workplaces the best they can be. We look forward to meeting with you and serving as a resource on the process involved in making changes to the CEI that could alter corporate benefit programs. I can be reached at (202) 627-1930 or whansen@ERIC.org.
Senior Vice President, Retirement & Compensation Policy