by Edward C. Kelleher
DTCC has announced it will reimburse all U.S.-based employees for the federal tax paid on same-sex domestic partner health coverage, making it one of the first financial services firms to offer this benefit. The reimbursement is effective immediately and will cover the entire 2011 tax year.
DTCC offers its employees the opportunity to enroll eligible domestic partners in its medical, dental and vision health plans. Under current federal law, however, this health benefit for domestic partners is subject to tax, unlike coverage for legal spouses and dependents as defined by the Defense of Marriage Act of 1996.
“This reimbursement will mirror the favorable tax treatment for same-sex domestic partners that the law now provides for married couples recognized by the federal government,” said Donald F. Donahue, DTCC president and CEO. The reimbursement decision was reached by senior management in partnership with DTCC’s LGBT (Lesbian, Gay, Bisexual and Transgender) Business Professional Network.
‘Leading the way’
Donahue said he was pleased that DTCC was in the vanguard of financial services firms to offer the tax reimburse-ment.“This decision demonstrates our commitment to an open, non-discrim-inatory environment for our employees and our desire to maintain a diverse and inclusive organization that values innovation, creativity and productivity,” Donahue said.
Two other leaders in the financial services area – Barclays and Credit Suisse – already offer tax reimburse-ment for same-sex domestic partners, along with other major U.S. companies such as Google and Cisco Systems.
Empire State Pride Agenda and the Human Rights Campaign – two organizations that advocate for LGBT employees – praised DTCC for its decision.
“Once again, the private sector is leading the way as companies update their policies to make up for these discriminatory taxes in order to treat their LGBT employees fairly,” said Empire State Pride Agenda Executive Director Ross D. Levi. “Federal tax law penalizes same-sex couples for no good reason. We applaud DTCC for its leadership and think this issue highlights the need to allow loving, same-sex couples to marry.”
Daryl Herrschaft, director, Human Rights Campaign Workplace Project, said “We applaud DTCC for joining a growing list of companies that gross-up employees’ wages to offset the unfair taxation of health insurance premiums for employees with domestic partners. It stands with many others in picking up the slack when the law doesn’t recognize the diversity of today’s workforce.”
Coalition of business leaders
DTCC also has joined a coalition of businesses supporting a bill that would amend the Internal Revenue Code to end taxation of health insurance benefits for domestic partners and treat them the same as health benefits for federally recognized spouses and dependents. The bill is called The Tax Equity for Health Plan Beneficiaries Act and to date has the support of more than 70 companies including Hewlett-Packard, General Mills, Citigroup, Microsoft, Xerox and Morgan Stanley.
DTCC has offered healthcare coverage for employees’ domestic partners since January 2001. @