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Front Page » Top Stories » Miami Gives Initial Ok To Providing Employment Benefits To Domestic Partners Despite 10 Million Budget Shortfall

Miami Gives Initial Ok To Providing Employment Benefits To Domestic Partners Despite 10 Million Budget Shortfall

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Written by on May 28, 2009

By Yudislaidy Fernandez
A $10 million budget shortfall hasn’t deterred Miami commissioners from giving an initial nod to providing employment benefits — including healthcare — to the domestic partners of city employees.

Extending the benefits to the partners and their dependents is projected to have only a slight fiscal impact, perhaps increasing city healthcare costs by only 2%, city officials say.

The measure received preliminary approval this month and is going through additional changes before a final vote.

The legislation, sponsored by Miami Mayor Manny Diaz and City Commissioner Marc Sarnoff, describes the domestic partnerships as personal, emotional and economic relationships with persons to whom city employees are not married and would apply to same-sex relationships.

The ordinance is not geared toward a group of people, Mr. Sarnoff said, but is designed to give domestic partners of employees the same benefits as their married counterparts.

"This is nothing more than treating people equally," he said.

The employee can also request sick, annual, funeral or family leave time to care for his or her domestic partner, according to the ordinance.

But those who choose to enroll must be committed, Mr. Sarnoff said, since the Internal Revenue Service applies a tax.

Miami-Dade County, Broward County and its school board, and cities such as Hialeah, Key West and Gainesville all have similar measures in place, he added.

Employees interested in enrolling in the benefits program must register their domestic partnership with Miami-Dade County. Neither the city nor county ordinance indicates the specific requirements couples must meet to register.

With fraud a potential concern, Mr. Sarnoff asked that strict penalties be established to prevent it. In a case of fraud, employees must refund all benefits received.

A report from the Society of Human Resource Management, a national association, shows that the cost of adding domestic partners to benefits plan is fairly small, said Risk Management Director LeeAnn Brehm.

A resource management association poll states that 85% of businesses that offer domestic partnership benefits have seen no increase in overall benefit cost, she said.

The fiscal impact is expected to be small based on its history in other places including Miami-Dade, where out of 40,000 employees about 25 have added the benefit coverage, Mr. Sarnoff said.

In a later interview, City Manager Pete Hernandez said the potential fiscal impact is not high.

"It’s not significant, and when you bring it to the scale of the city with 4,000 employees it could be about 30 or 40 applying for it," he said.

The city’s current health benefit plan covers city employees except police officers, who are covered by the Fraternal Order of Police Health Insurance Trust. Union employees pay about 15% of the health insurance premium for themselves and their families, said Kelly Penton, city spokeswoman.

Domestic partners and their dependents would pay the same premiums, the proposal says.

Managerial employees are covered by the city’s plan in full but must pay 100% for spouse and dependent coverage.

Ms. Brehm, of risk management, said the likely increase on the city’s healthcare plan could be about 2%, but it’s hard to know exact costs until the ordinance takes effect.

The domestic partnership would fiscally impact the city if it increases medical expenditures, Mr. Hernandez said.

But if the number of participants is low, he said, "It should not have a significant impact."

Cost could be key. The city is confronting a $10 million budget shortfall this fiscal year and is looking at tend of millions of dollars in red ink next fiscal year.

Commissioner Tomás Regalado also supported the measure, saying with the burden healthcare represents for many nowadays it helps some people "piggyback on a good healthcare system.

"I know many cases of people who are living together and are not married," Mr. Regalado said, "not because they don’t want to but their Social Security or pension checks will be reduced."

The ordinance — which passed on first reading — is to undergo revisions to put an administrative policy in place, address fraud concerns and ensure it’s in line with the city’s collective bargaining agreement before a final vote.

Mr. Hernandez said: "We are looking to add some additional criteria to strengthen the requirements and tighten it [the ordinance] up to prevent potential benefits from being abused."