GLAA endorses DP health care benefits tax exemption bill
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GLAA endorses DP health care benefits tax exemption bill

Fighting for Equal Rights Since 1971
P. O. Box 75265
Washington, D.C. 20013

Testimony on Bill 16-405,
Domestic Partner Health Care Benefits Tax Exemption Act of 2005

Before the Committee on Taxation and Revenue

September 28, 2005

Good morning, Chairman Evans, Councilmembers and fellow citizens.

My name is Bob Summersgill. I am the treasurer of the Gay and Lesbian Activists Alliance of Washington, D.C. (GLAA), the oldest continuously active gay and lesbian civil rights organization in the country.

We are in favor of this legislation and we are pleased that you, Chairman Jack Evans, have introduced it.

The bill will address a significant failing of the original Health Care Benefits Expansion Act of 1992 by exempting from gross income the employer contribution to health insurance for a domestic partner.

Currently, we have a tax disincentive for people to add their domestic partner to their employer’s health insurance plans. The so-called Defense of Marriage Act prohibits the IRS from recognizing the reality of same-sex couples in relationships. Therefore, they must tax employer contributed health care benefits as income.

Because D.C. tax returns follow the federal forms, the District likewise taxes this benefit as income. The employer contribution for a married spouse on an identical health care plan would not be considered taxable income.

The tax makes the cost of health care hundreds of dollars more expensive for domestic partners compared to their married counterparts receiving identical benefits.

The result has been that many people who would otherwise register as domestic partners, and add their partners to their health care plan find it too expensive, and leaving their partners underinsured or uninsured. The greater expense for health care for the uninsured falls to the D.C. Government and a financially distressed health care system.

By amending section 47-1803 of the District of Columbia Official Code, this legislation helps and encourages couples to register as domestic partners and get into private insurance plans.

We don’t anticipate that the number of domestic partners will dramatically increase as a result of this legislation. Nor do we expect a large percentage of domestic partners to take advantage of this exemption. For many couples, both partners already have employer paid health care plans, which will still be less expensive because of federal taxes.

However, for those who would benefit, the savings will be significant, anywhere from $200 to $1,000 per year. The cost to the District government will be negligible, and may result in a net savings in health care costs.

Thank you, I am available to answer any questions that you may have.