Business Coalition for Benefits Tax Equity to support the Tax Parity for Health Plan Beneficiaries Act of 2011

1. Business Coalition for
Benefits Tax Equity
Tax Parity for Health Plan
Beneficiaries Act of 2011
H.R. 2088 & S. 1171

2. Partner Benefits
291 Fortune 500 companies offer
health benefits to employees’
domestic partners 291
286
265
216
124
21
2
1990 1995 2000 2004 2006 2008 2010
Business Coalition for Benefits Tax Equity

3. Issue: The Tax Burden
for Partner Benefits
Federal Law treats
• Spousal health coverage as tax-exempt
wages/income
• Partner health coverage as taxable
wages/income
Increases Employer Payroll Tax
and Employee Income Tax burdens
Business Coalition for Benefits Tax Equity

4. Issue: The Tax Burden
for Partner Benefits
In Numbers...
Employee with a Employee with a
Single Employee Spouse Domestic Partner
Annual Employee Salary $32,000 $32,000 $32,000
Monthly Employer $335 $907 $907
Contributions for Benefits
Annualized $4,020 $10,884 $10,884
10,884 - 4,020 =
Imputed Income -0- -0- $6,864
32,000 + 6,864 =
Taxable Income $32,000 $32,000 $38,864
Employee’s 2006 Tax
Liability $3,155 $3,155 $4,710
Domestic partner vs. spousal benefits:
nearly 50% increase in tax liability
Business Coalition for Benefits Tax Equity

5. Tax Parity for Health Plan
Beneficiaries Act
• Would end the tax inequities that apply
to employer-provided health insurance
for domestic partners
– House: Introduced 6/21/2011
• Rep. Jim McDermott (D-WA)
• Rep. Earl Blumenauer (D-OR)
– Senate: Introduced 6/2/2011
• Sen. Richard Hanna (R-NY)
• Nan Hayworth (R-NY)
Business Coalition for Benefits Tax Equity

6. Business Case for Support
• Eliminates unfair taxation
that hurts your bottom line and places an extra
financial burden on employees
• Eliminates administrative burdens
of separate record keeping and imputed income
calculations for partner benefits
• Reinforces corporate reputation
as a champion of workplace fairness
– Drive recruitment and retention of dedicated,
fair-minded employees
Business Coalition for Benefits Tax Equity

7. Join the Business Coalition
“attract and retainhealth benefits have beenworkforce, of our effort to
Domestic partner
a qualified and diverse
a key part
and we are
pleased to support Representative McDermott’s legislation that would
end the tax penalties we and our employees face when we make
these benefits available.
”
– Julie Fasone Holder, corporate vice president for human resources, diversity & inclusion
and public affairs at the Dow Chemical Company
Business Coalition for Benefits Tax Equity

8. More than 80 businesses support...
Aetna, Hartford, CT Diageo North America, Norwalk, CT Moody's Corp., New York, NY
A.H. Wilder Foundation, St. Paul, MN The Dow Chemical Co., Midland, MI Morgan Stanley, New York, NY
Alaska Air Group Inc., Seattle, WA Eastman Kodak Co., Rochester, NY Motorola, Schaumburg, IL
Alcoa Inc., Pittsburgh, PA ERISA Industry Committee, Washington, DC Nationwide, Columbus, OH
AMR Corp. (American Airlines), Ft. Worth, TX Ernst & Young, New York, NY Nike Inc., Beaverton, OR
American Benefits Council, Washington, DC Exelon Corp., Chicago, IL Ocera Therapeutics, San Diego, CA
Ameriprise Financial Inc., Minneapolis, MN General Mills Inc., Minneapolis, MN PG&E Corp., San Francisco, CA
AT&T Inc., Dallas, TX GlaxoSmithKline plc, Philadelphia, PA PricewaterhouseCoopers, New York, NY
Bank of America Corp., Charlotte, NC Goldman, Sachs & Co., New York, NY Project for Pride in Living, Minneapolis, MN
Bausch & Lomb Inc., Rochester, NY Google Inc., Mountain View, CA Prudential Financial, Newark, NJ
Best Buy Co. Inc., Richfield, MN Herman Miller Inc., Zeeland, MI Quorum Review Inc., Seattle, WA
Bingham McCutchen LLP, Boston, MA Hewlett-Packard Co., Palo Alto, CA Replacements Ltd., Greensboro, NC
BlueCross BlueShield of MN, Eagan, MN HSBC North America, New York, NY Russell Investment Group, Tacoma, WA
Boehringer Ingelheim USA Corp, Ridgefield, CT IBM Corp., Armonk, NY Sempra Energy, San Diego, CA
Capital One Financial Corp., Falls Church, VA ICMA Retirement Corp., Washington, DC Society for Human Resource Management (SHRM),
Cardinal Health Inc., Dublin, OH Intel Corp., Santa Clara, CA Alexandria, VA
Carlson Companies, Minneapolis, MN J.P. Morgan Chase & Co., New York, NY State Street Corp., Boston, MA
Charles Schwab & Co Inc., San Francisco, CA JetBlue Airways Corp., Forest Hills, NY Texas Instruments, Dallas, TX
The Chubb Corp., Warren, NJ KPMG LLP, New York, NY The Depository Trust & Clearing Corporation, New York,
NY
Citigroup Inc., New York, NY Levi Strauss & Co., San Francisco, CA
Thomson Reuters, New York, NY
CNA Insurance, Chicago, IL Marriott International Inc., Bethesda, MD
TIAA-CREF, New York, NY
College & University Professional Association Marsh & McLennan Companies Inc., New York, NY
for Human Resources, Knoxville, TN Time Warner Inc., New York, NY
Massachusetts Mutual Life Insurance Co., Springfield, MA
Corning Inc., Corning, NY UBS AG, Stamford, CT
Medtronic Inc., Minneapolis, MN
Cullen Weston Pines & Bach LLP, Madison, WI Verizon Communications Inc., New York, NY
Merck & Co. Inc., New York, NY
Day One, South Portland, ME Winston & Strawn LLP, Chicago, IL
MetLife Inc., New York, NY
Deloitte LLP, New York, NY World at Work, Washington, DC
Microsoft Corp., Redmond, WA
Delta Air Lines Inc., Atlanta, GA Xerox Corp., Rochester, NY
MillerCoors Brewing Co., Chicago, IL
Business Coalition for Benefits Tax Equity

9. Business Coalition for Benefits
Tax Equity
• www.hrc.org/bcbte for latest information
• Contact Derek Dorn of Davis & Harman
LLP (202)662-2290 to join
• E-mail workplace@hrc.org for a copy of
these slides
Business Coalition for Benefits Tax Equity