McCarter & English Provides Employees Tax Offsets For Domestic Partner Health Benefits

Monday, August 1, 2011 - 00:00

McCarter & English LLP has announced that the firm's Executive Committee has adopted a compensation gross-up policy that offsets the tax disadvantage previously faced by the firm's lesbian, gay, bisexual and transgender employees who cover domestic orcivil union partners under their health insurance plans. The vote was unanimous.

Presently, the Internal Revenue Code treats the value of employer-provided healthcare benefits for a civil union or domestic partner as "imputed income" to the employee. This means that employees who elect domestic partner benefits must pay income tax on the value of those benefits, which is in direct contrast to employees with different-sex spouses.

In an effort to ensure equality in the workplace, some companies are adopting gross-up policies so that employees who claim health care benefits for same sex/civil union partners receive a bump in income such that, post-tax, the employees are in the same position as similarly situated employees electing healthcare benefits for their opposite-sex spouses.

"We make every effort to 'walk the walk' in the area of diversity," said Stephen M. Vajtay, Jr., managing partner of McCarter. McCarter's partner-in-charge of firmwide diversity, Stephanie J. Cohen added, "I am extremely proud that McCarter is among the first few law firms in the U.S. to actually adopt this policy. It is a powerful example of the firm's commitment to creating an inclusive work environment that ensures all of its employees are treated fairly."