University of Nebraska Board of Regents to consider expanding benefits eligibility to include employees' partners
Under the “employee plus one” proposal, to be outlined by President James B. Milliken and Vice President for Business and Finance David Lechner, the university would extend eligibility for coverage to an “adult designee” who shares an employee’s household and with whom the employee is financially interdependent, with family coverage to include the adult designee and their dependent children. Benefits would include health, dental and vision insurance, sick and bereavement leave and eligibility for the Dependent Scholarship Program.
“I support extending equitable benefits to University of Nebraska employees,” Milliken said. “This includes providing benefits for employees’ partners. Every other Big Ten university provides such benefits, as do a majority of the peers of the NU campuses. We should provide similar benefits not only to be competitive in attracting and keeping top faculty and staff, but because treating our employees equitably is the right thing to do.”
Faculty senates and student government organizations on all four campuses support the proposal. The change was also endorsed by the University-wide Fringe Benefits Committee, and all four NU chancellors.
The University has obtained an opinion from the Omaha law firm of Fraser Stryker PC LLO that the University's Plus One Plan is constitutional. Their analysis found that the proposed Plus One plan does not reference a civil union, domestic partnership or other similar same sex relationship; that it does not confer any of the traditional rights of marriage upon plan participants; and that the majority of courts in other states (with laws banning same sex marriage) have upheld public employer benefit plans providing benefits to same-sex couples. Similar proposals have been adopted in a number of other Defense of Marriage Act states, including Michigan, Ohio, Wisconsin, Montana and Kentucky among others. Milliken said adoption of a “plus one” proposal would bring the University of Nebraska in line with the prevailing practices of comparable higher education institutions. Nationally, more than 300 higher education institutions offer partner benefits, including public universities and systems in at least 30 states and most of the highly ranked research institutions.
Providing benefits to employees’ partners is a strong trend in the private sector also, with more than 80 percent of Fortune 100 companies and almost 60 percent of Fortune 500 companies offering health insurance benefits to employee partners. In Nebraska, a number of major companies offer such benefits, including ConAgra Foods, Union Pacific, Peter Kiewit & Sons, Mutual of Omaha, Ameritas, HDR, Baker’s Supermarkets, Baird Holm and Kutak Rock LLP.
NU should offer partner benefits in order to compete effectively in the global marketplace for talent, Milliken said. “The University of Nebraska plays a key role in the economic success of the state,” he said. “If we are at a competitive disadvantage, the talent will go elsewhere – which will adversely affect our goal to help grow a knowledge-based economy in Nebraska.”
The proposal is consistent with the university’s existing policy and strategic goals, including its nondiscrimination policy, which includes sexual orientation and marital status. The university’s Strategic Framework includes several objectives related to competitive employment policies and practices, including fringe benefits. The Board’s philosophy has been to strive for compensation that is at least at the midpoint of peer institutions. Benefits can account for up to 20 percent of an employee’s total compensation. Though benefits have traditionally been extended to the spouse and children of an employee, this has not been the case for unmarried couples, effectively resulting in less compensation for similar work.
According to the U.S. Census Bureau, about half of the nation’s households are headed by unmarried adults. Only about 25 percent of households meet the “traditional” definition of the family – a husband and wife living together with their children.
In 2005, Hewitt Associates, a human resource consulting and outsourcing company, found that 64 percent of companies that added partner benefits saw a financial impact of less than 1 percent on total benefits costs and 88 percent of companies saw an impact of less than 2 percent. On average, for every 1,000 employees, one to four people will enroll in same-sex coverage and 13 to 21 will enroll in opposite-sex coverage.
NU officials have estimated the cost of extending health insurance benefits to qualifying adults of the same and opposite gender to be $750,000 to $1.5 million based on an estimated increase in enrollment of 1 to 2 percent, or about 100 to 200 new employee sign-ups. Total costs for the university’s health insurance plan today are more than $120 million. According to Lechner, the extended benefits would require a $1-$3 per month increase in employee health insurance premiums. If approved, the benefits would become available beginning Jan. 1, 2013.