In Sickness and in Health?

The promise of equal benefits for domestic partners is uncertain under S.F.'s new law

In an overheated upstairs room at the War Memorial building one afternoon in December, about 50 San Francisco business owners met with city officials at the temporary city hall to talk about the city's new domestic-partners ordinance. It was the first such meeting, even though the landmark legislation was introduced last May. The event was long overdue, considering the myriad questions the ordinance has raised -- and the fact that roughly $1 billion worth of city business with as many as 12,000 contractors turn on how and when they are answered.

The businesspeople in the room that day, and thousands more like them, are the law's main targets. If they don't comply with the city's new rules requiring equal benefits protection for domestic partners, they will no longer qualify for city contracts and must seek work elsewhere. At the front of the room, a panel of weary-eyed bureaucrats listened as business owners spoke.

"I provide full benefits, all spouses, all children," said Keith Gentel, who owns Center Hardware on Potrero Hill and employs 18 workers. He estimates that city contracts make up roughly 10 percent of his business. "I have no problem providing benefits to domestic partners, but I don't perceive this as being a viable commodity for me to purchase within your time constraints."

Marivic Bamba, head of the city's Human Rights Commission (HRC), which is charged with enforcing the ordinance, nodded sympathetically: "We don't have the answers to your questions at this point in time." Gentel's response was half outburst, half growl. "Well unfortunately, nobody has conveyed that to the public at large. The communication has been terrible. All it's been is, 'You have to do this by then.' "

It's little wonder Bamba and the other city bureaucrats have no answers. Politicians hastened the legislation forward in the weeks directly preceding last November's election -- the bill passed its final reading Nov. 4, the day before the election. By the week's end, Mayor Willie Brown had signed it. As of June 1, all companies seeking to do business with the city of San Francisco will have to provide benefits to registered domestic partners -- straight as well as gay.

The media and gay and lesbian groups hailed the legislation as a civil rights victory. Other cities called, saying they might enact similar bills. City politicians applauded the law's progressiveness. Supervisor Leslie Katz, a lesbian and a civil rights lawyer, had become its chief proponent.

San Francisco's new domestic-partners ordinance sounds fine and good, in theory. It extends the city's anti-discrimination rules, so that city contractors must offer the same benefits to employees' domestic partners as they do to employees' legal spouses.

Simple, straightforward, and fair, right?
But buried deep beneath all the rhetorical fanfare and the euphoria, unanswered practical and legal questions about the new legislation remain. Insurance experts doubt that small businesses will be able to buy health coverage for domestic partners. Legal experts say the city is likely to be sued, because the ordinance tampers with employee-employer relations in areas that are the exclusive preserve of the federal government.

For all their enthusiasm when the law passed, city legislators have since revisited the ordinance, amending its wording and narrowing its scope so that it can pass muster on these and other practical and legal grounds. But the general language of the law remains as passed, and to date, the city has offered little help to the 6,000 to 12,000 contractors on whom it falls the hardest. The actual steps they need to take to comply with the ordinance come June 1 are still largely a mystery.

The city's Human Rights Commission hopes to present a set of rules and regulations in April. That deadline sounds ambitious, considering that the HRC is still scrambling for information on the most fundamental element for compliance, a list of insurance providers that actually offer domestic-partner benefits to small businesses. The commission has been trying to compile such a "resource list," but so far nothing has materialized.

Tom Sher, a benefits consultant who has helped Bay Area businesses arrange employee insurance plans for the past 18 years, says that list is difficult to come by, because those resources barely exist. "What the city has done is they've told small businesses to go buy a product that is neither universally available, nor is it easily found in the marketplace," Sher says.

The few insurance companies that currently cover domestic partners serve mostly large-scale employers, he says. Generally, those with 50 or fewer employees are out of luck. The state-sponsored Health Insurance Plan of California (known as the HIPC) is the health insurance cooperative that was established specifically for small businesses. But even the HIPC, which covers more than 100,000 employees statewide, won't cover domestic partners.

Sher says that practice is unlikely to change, because insurers fear the costs of providing domestic-partners insurance to small groups will outweigh the profits that even the potential growth in business might bring. He says several major insurance companies have said they won't cover domestic partners because state and federal laws don't recognize such relationships.

And there are no legal incentives, says Sher. "Insurance companies don't have to cover domestic partners, so they don't." On the state level insurers are required merely to offer small businesses fair rates, but there's no mention of who insurers must cover.

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