Writers Guild pens novel health care plan.

Multi-employer plan to cover same-sex partners 

The Writers Guild of America has developed the nation's first multi-employer health plan to offer health insurance benefits for same-sex domestic partners.

The coverage will become available on April 1 to same-sex partners of eligible guild members who meet a certain set of specifications, according to the Writers' Guild-Industry Health Fund, the autonomous trust that operates the WGA's health plan.

For instance, according to health fund officials, same-sex coverage will be available only to people "who have decided to become domestic partners indefinitely, as evidenced by a relationship of mutual financial support." The coverage will also be limited couples who have maintained a relationship for at least six months as verified through affidavits and written documents.

The fund has no estimate for the number of same-sex partners initially expected to take advantage of the health coverage, said Rocco N. Calabrese, administrator for the fund. The WGA currently covers more than 12,000 members and their legal dependents.

Only a handful of entertainment companies, such as MCA/Universal, Warner Bros. and Sony Pictures Entertainment, have developed same-sex benefits policies for their employees. And the WGA will be breaking new ground in terms of multi-employer plans offered by unions and other organizations, said Peter Boland, president of the Berkeley, Calif.-based Boland Healthcare Inc. consulting firm.

As such, Boland said, the ultimate success of the WGA plan is largely unknown.

'Shot in the dark'

"There isn't historical data on which to base the underwriting," Boland said. "It's a shot in the dark as to how it will work out.

"It's a social and economic commitment that will take a number of years to see what the impact is," he said.

Opposite-sex domestic partners do not qualify for health coverage under the guild's plan.

The WGA's health benefits are decided through collective bargaining with the various production companies that hire union screen and television writers. Both WGA members and their changing employers make contributions to the plan, making it a multi-employer plan.

Taxing situation

Under federal guidelines, such health packages can only provide benefits to "legal dependents" of the plan's participants or the plan would risk losing its tax-free status. In most cases, legal-dependent status is conferred only on married partners and a participant's children.

However, the Internal Revenue Service recently ruled that same-sex partners could be included in the WGA plan if the added cost of including them was "de minimis" (insignificant).

The IRS and WGA agreed that as long as that added cost was kept under 3.4 percent of the health plan's total cost, it would meet the de minimis standard.

Another legal obstacle to be overcome was that the IRS deemed the WGA's health benefits to same-sex partners as taxable "supplemental wages" because they were not provided to a legal dependent. Thus, the health plan participant - the covered writer - must pre-pay all state and federal withholding taxes applicable to the additional health benefits.

The WGA estimates that the cost of providing the added benefits will run about $300 a month. State and federal withholding taxes are about half that amount, according to fund officials, which means that participants wishing to sign up their same-sex partners must submit $450 each quarter to the WGA, which will then be turned over to state and federal tax officials.

The additional coverage had been suggested by the union's membership as a way to level the playing field between married partners and same-sex partners, guild officials said.

Same-sex domestic partners under the law are unable to marry and were therefore unable to get the benefits protection that married couples had, said WGA spokeswoman Cheryl Rhoden.

"This introduces fairness to the dependent status under the health plan," she said.