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Federal Eye
Posted at 11:50 AM ET, 11/27/2012

Benefits expansion for domestic partners would have small impact on costs, CBO says

Extending federal employee health insurance and retirement survivor benefits to same-sex domestic partners wouldhave arelatively small impact on the number of people covered and on the cost of those programs, according to an analysis done for Congress.

A Congressional Budget Office cost estimate released Mondayexamined a bill to make those partners eligiblefor the full range of benefits that apply to opposite-sex spouses offederal employees and retirees. The measure passed the Senate Homeland Security and Governmental Affairs Committee in May but has not advanced. The bipartisan sponsors say that the federal government should expand its benefits as a matter of fairness and to keep up with employers that include same-sex partners in their benefit programs.

Currently, same-sex partners are eligible under some federal employee family benefits, such as counseling programs and certain travel and relocation payments. They also are eligible for the Federal Long Term Care Insurance Program, for which the government makes no contributions toward premiums, and for a less generous form of a survivor benefit, called an "insurable interest" annuity.

Those benefits were extended to same-sex partners by a series of Obama administration actions. However, legislation would be required to make those partners eligible for two of the most valuable benefits, Federal Employees Health Benefits Program coverage and standard retirement survivor annuities.

"CBO expects that few federal employees (less than 1 percent) would choose to register a same-sex domestic partnership if given the opportunity. That figure is based on information from state and local governments as well as research on the experience of organizations that have adopted similar policies," CBO said.

CBO said that apart from the U.S. Postal Service which self-funds the employer share of health insurance for its employees and retirees extending FEHBP coverage to same-sex partners of active employees would increase the cost to the government by $133 million over 10 years. That is a net figure, consisting of $243 million in added premium costs, partly offset by savings from requiring the program to recover payments when a third party is liable for the health care costs of an enrollee.

For retirees, there would be a net savings of $60 million because projected recoveries would exceed the projected new costs.

CBO assumed that about 300 new federal retirees per year would add survivor benefits for domestic partners. Because choosing that benefit reduces the retiree's own benefit, CBO projected a net savings of $22 million over 10 years. It did not assess the potential liability to pay benefits to survivors after that period.

It similarly found that extending coverage under the injury compensation program would affect only about 100 people a year at a cost to non-postal agencies of $1 million. There are about 2.1 million non-postal federal employees, plus nearly 2.5 million retirees and survivor beneficiaries, both postal and non-postal.

Opposite-sex domestic partners are not eligible for those benefits. Proposals to extend benefits typically do not include them on grounds that those workers have the option of marrying. But although same-sex marriage is recognized in some jurisdictions, federal law bars eligibility for federal employment-related benefits.

A spokeswoman for co-sponsor Sen. Joseph Lieberman (I-Conn.), chairman of the committee, said the cost "is well worth the equality it will bring to those who will benefit."

"Senator Lieberman wants to attract the best men and women possible to service in federal government," Leslie Phillips, director of communications for the committee, said in an e-mail. "One way to do that is by offering competitive benefits to the family members of gay federal employees. The bill makes good economic sense. It is sound policy. And it is the right thing to do."

By  |  11:50 AM ET, 11/27/2012

Tags:  domestic partners, federal employees, federal employment benefits, federal health insurance, federal retirement

 
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