LGBT faculty still subject to tax inequality
At Penn, LGBT employees hopeful that U. will change policy soon
January 28, 2011, 4:35 am · Updated January 28, 2011, 12:00 am·
Though Penn has been hailed as a particularly welcoming place for those who identify as lesbian, gay, bisexual or transgender, an equality gap still exists between heterosexual married employees and those in same-sex domestic partnerships.
Currently, LGBT faculty and staff at Penn in same-sex domestic partnerships are required to pay an extra tax on employer-provided health coverage — leveling out to around $1,000 per year — from which married faculty and staff are exempt.
This disparity exists since the Internal Revenue Service does not view domestic partnerships in the same light as heterosexual marriages.
Last year, several companies — as well as Syracuse University — began to offer employees with same-sex domestic partners an additional payment to account for the continued disparity. Penn, however, is not among the institutions that have begun “grossing up” — compensating for the additional tax.
LGBT Center Director Bob Schoenberg said that “the practice of ‘grossing up’ has been discussed, and I am hopeful that it will be enabled.”
The University “has always been at the forefront of progress” in LGBT matters, he said.
Penn has offered health benefits to employees with same-sex partners since 1994.
“Penn was the first Ivy League institution and among the first mid-Atlantic region employers to include same-sex domestic partners in our benefits coverage,” Terri Ryan, manager of Strategic Communications for Penn’s Division of Human Resources, wrote in an e-mail.
However, Penn has no concrete plans to compensate LGBT employees for the additional taxes they pay, according to Ryan.
“It is Penn’s position that it’s not prudent for us to try to correct for differences in federal, state, and local tax law,” she wrote.
Syracuse University, however, took a different approach.
In March 2010, Syracuse made the decision — effective July 1, 2010 — to offer its employees with same-sex domestic partners a sum of up to $1,000 to cover the extra tax costs.
The decision was made in response to interest from Syracuse’s LGBT community, and based in an effort “to essentially structure benefits in the most inclusive fashion,” said Syracuse Senior Vice President for Public Affairs Kevin Quinn.
While Syracuse is the only university to equalize health benefit taxes, many companies have made similar initiatives. Google began “grossing up” at the same time as Syracuse, and other companies such as Facebook, Bain and Company and Barclays have plans to do so in 2011, according to The New York Times.
At Penn, employees in same-sex domestic partnerships are hopeful that the University will soon follow the example laid out by these companies.
Working to implement additional compensation “would be consistent with Penn’s overall support of the LGBT community,” said Elise Betz, executive director of Alumni Relations.
“The penalty is real and personally does create a cost for me and others,” School of Engineering and Applied Science professor Rob Carpick wrote in an e-mail. “It can be a particularly difficult expense to bear for those at lower incomes.”
Jordan Pascucci, a regional director of Admissions and LGBT liaison, was disappointed with the lack of additional support for employees in same-sex partnerships, given Penn’s progressive nature. Though she and her partner are registered domestic partners in Philadelphia, they decided to keep separate health insurance plans to avoid the additional tax, she wrote in an e-mail.
With Penn as a national leader on the LGBT front, she wrote, this policy deserves “a closer look.”