When the Montgomery County Council proposed extending health insurance benefits to the partners of homosexual employees, the Archdiocese of Washington hardly mentioned health care in a statement condemning the "ill-conceived proposal."

The Roman Catholic Church has been a leading advocate for expanding health insurance coverage to the millions of Americans without it. But the archdiocese urged quick defeat of the Montgomery bill on the grounds that it would weaken marriage by putting homosexual relationships on equal footing with heterosexual unions.

"This issue doesn't seem to be as much about health insurance as about legitimizing same-sex relationships," said Susan Gibbs, communications director for the archdiocese. "Obviously, church teaching promotes marriage, and we're recommending that counties adopt policies that really encourage marriage."

The response, and others like it, signaled Montgomery's entrance into a debate far broader than who is entitled to fringe benefits. Across the country, such proposals have sparked proxy fights between social conservatives and gay-rights activists over the legality and appropriateness of same-sex marriage.

Montgomery would join more than 70 state and local governments and 2,800 corporations in offering health benefits to partners of its gay employees, if the County Council approves the bill next month. A public hearing has been scheduled for Tuesday.

Supporters say counties like Montgomery are behind the times in extending the kind of domestic partner benefits that have become commonplace among some private-sector companies looking for an edge in a tight labor market. The policy, they note, costs relatively little--less than 1 percent of health insurance costs in many cases--and applies only to a small segment of the work force.

Opponents say the change would undermine legal statutes that prohibit same-sex marriages, and they say it is no accident that such proposals are coming forward now. Whether to recognize gay marriage is an issue being considered by state supreme courts in Hawaii and Vermont, with rulings expected any day.

Dozens of lawsuits challenging such benefits have been filed--including successful ones in Minneapolis and Arlington County--and letters opposing Montgomery's bill warn that the county could go the way of the Roman Empire if the measure passes.

"What will you consider next? Why not more than one partner? One, two, three or more as permitted in some places in the world," G. Stanley Doore, a Silver Spring resident, wrote in a letter to the council. "In essence you are considering throwing away male and female marriage and for what purpose?"

But many gay people say the issue has less to do with answering large social questions than giving them the same access to health care as their married colleagues. The Human Rights Campaign, the country's largest gay political organization, estimates that domestic partner benefits have extended health insurance to hundreds of thousands of formerly uninsured people across the country.

Terry Sidney hopes to join the list. As the founder of Emerald City Productions, a nonprofit theater group in Washington, Sidney has been without health insurance for five years. His partner, Reginald Jetter, is a Montgomery County manager with a benefits package many private-sector executives would envy: health insurance, bereavement leave, sick days, retirement plans.

But the couple still tucks away extra money each month in case of a medical emergency, and Sidney has found himself waiting out illnesses, skimping on medicine and postponing $5,000 worth of dental work to avoid dipping into savings.

"We're sort of helpless in the sense that if something develops, it comes out of our pocket," Jetter said. "We know we have to have available money and income to take care of anything that may come up."

Nationally, domestic partner benefits first became an issue in 1982 during labor talks with the Village Voice newspaper, and the private sector has since led the way in making them an accepted part of a fringe benefits package. Since 1990, the number of companies offering domestic partners benefits has risen from a few dozen to almost 3,000, including some of the nation's largest employers.

"It has made our members feel like part of the family," said Bob Baublitz, head of Bell Atlantic's 300-member gay, lesbian, bisexual and trans-gender group. The Advocate magazine ranked the company as one of the best places to work for gay employees.

Marriott International Inc. requires employees wishing to add domestic partners to their insurance benefits to present a notarized affidavit attesting to a relationship of at least six months. About 1 percent of Marriott International's 90,000 employees has signed up for the benefits since the company began offering them last year.

International Business Machines, the largest company offering such benefits, reports that several hundred of its 140,000 employees have enrolled over the past two years. The program has increased costs by less than 1 percent of the company's annual health insurance expenses.

"We really did it because we knew that if we wanted to compete for the best people, we would have to offer programs to a diverse work force," said Jana Weatherbee, an IBM spokeswoman.

Government agencies have been slower to follow suit, partly because many local jurisdictions do not have the authority to create domestic partners benefits under state law. Arlington's program was overturned in March after a judge found that the county violated Virginia law in creating the benefits. The lawsuit challenging the program was financed by the Alliance Defense Fund, a conservative legal institute, and the Virginia Supreme Court has agreed to hear an appeal.

"My definition of family is a group of individuals related to one another by marriage, birth or adoption. You can put a period after that," said Wendell Brown, a plaintiff who brought the Arlington suit. "That definition is under attack and that's why we are seeing these suits spring up all over the country."

Gay rights advocates say many local governments took on the issue after San Francisco adopted a law two years ago requiring companies doing business with the city to offer unmarried employees the same health benefits available to their married colleagues.

But California also serves as an example of a state conflicted over gay rights. Gov. Gray Davis (D) recently made it only the sixth state to extend domestic partners benefits to its employees. At the same time, a referendum has qualified for the March primary ballot that would prohibit gay marriages.

Legal scholars say the benefits are an attempt to find middle ground as corporations and government adapt to the changing nature of American families. There are more than 5 million unmarried couples living together, according to 1996 U.S. Census figures.

"It's an official recognition of same-sex relationships, but it's not calling them marriages and not providing all of the same benefits," said William Eskridge, a professor at Yale Law School.

In Montgomery, a liberal county that put off considering domestic partners legislation last year, there appears to be enough votes to pass the bill. The county would become the third Maryland jurisdiction to offer the benefits, following Baltimore and Takoma Park.

Last week, County Executive Douglas M. Duncan (D) announced his support for the bill, going against the expressed position of his church on the issue. He noted that the bill covers only same-sex relationships, not heterosexual ones for which marriage is legal.

"You have to separate your faith's position from your legal and elected position to look out for the whole community," said Duncan, who is a Catholic. "This targets people who can't get married. I don't support gay marriage, but this bill as drawn looks reasonable."

CAPTION: County employee Reginald Jetter's partner has not had health insurance for five years.