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House Health Bill Expands Tax Benefits To Same-Sex Partners

By Martin Vaughan, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- House legislation that would overhaul health care would also expand tax benefits for employer-provided health insurance to same- sex partners.

The provision authored by Rep. Jim McDermott, D-Wash., was a last-minute addition to a $1 trillion-plus health-care rewrite being considered by the House Ways and Means Committee Thursday.

"The provisions added to the Chairman's mark would eliminate the added tax burden incurred by same-sex partners, as well as other non-spouse, non-dependent beneficiaries who are offered employer health benefits," Human Rights Campaign President Joe Solmonese wrote to House Ways and Means Committee Chairman Charles Rangel, D-N.Y., in a letter of support.

Expanding tax benefits to same-sex partners of covered employees - as well as opposite-sex domestic partners or adult children of employees - is estimated to cost the government $4 billion over the next 10 years.

A second last-minute addition to the bill is a provision to exclude over-the- counter drugs from eligibility for reimbursement by a flexible-spending account plan. That provision would raise $8 billion over 10 years, more than offsetting the cost of the domestic partner provision.

The measure to extend tax benefits for health coverage to domestic partners has broad support from the business community. A coalition of dozens of Fortune 500 firms including the Chubb Corporation (CB), General Mills Inc. (GIS), Marriott International, Inc. (MAR), and Nike Inc. (NKE) has been lobbying for the provision.

Under current law, the value of employer-provided health benefits may be excluded from income tax for certain dependents. Those dependents include a qualifying child, a spouse, or other qualifying relative supported by the employee.

Many employers offer coverage for domestic partners - more than 57% of Fortune 500 companies, according to the Human Rights Campaign - but employees must pay tax on the value of that coverage if they elect it.

The McDermott provision added to the House health-care bill has 11 House co- sponsors, including one Republican, Rep. Ileana Ros-Lehtinen, R-Fla.

-By Martin Vaughan, Dow Jones Newswires; 202-862-9244; martin.vaughan@ dowjones.com

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