Wal-Mart Health Benefits Move Seen As a Gay Rights Win

Wal-Mart Stores Inc. said in August that it will offer health benefits to its U.S. workers’ domestic partners starting Jan. 1, just as a majority of Fortune 500 companies have already done.

“Most large companies, even midsize employers as well, … already offer benefits to domestic partners,” said Bruce Elliott, compensation and benefits manager at the Society for Human Resource Management in Alexandria, Va. “What they’re doing is nothing new.”

But the fact that Wal-Mart — the largest private employer with 1.3 million workers in the U.S. — has decided to offer the benefits is a high-profile win for gay-rights advocates and could cause other companies that haven’t offered the benefits to do so.

“This will be influential for other businesses,” said Deena Fidas, director of the workplace equality program at the Human Rights Campaign of Washington, D.C., which is working to achieve equality for lesbian, gay, bisexual and transgender Americans.

Even the Family Council, a conservative organization headquartered in Little Rock, didn’t have a problem with Wal-Mart’s decision.

“It’s a free county and they have a right to offer any benefits that they want to and we support their right to do that,” said Jerry Cox, president of Family Council. “And that’s pretty much the end of the discussion.”

He added that Wal-Mart’s decision to offer benefits to domestic partners includes the opposite sex too.

The Bentonville retailer’s announcement came just months after the U.S. Supreme Court ruled that the federal government must recognize same-sex marriages in states where they are legal.

In Arkansas, the state constitution’s ban on same-sex marriage, which was proposed by the Family Council and adopted by voters in 2004, is being challenged in U.S. District Court in Little Rock. Attorney Jack Wagoner III of Little Rock, who is representing a number of same-sex couples in the case, said he is first asking that the court immediately order Arkansas to recognize the marriages of same-sex couples who have been legally married in other states. State officials have filed a motion to dismiss the case, and both requests will be heard at a hearing set for Dec. 12.

Wagoner said the issue of whether Arkansas should be required to allow same-sex couples to legally marry in the state will be decided at a later date.

Wal-Mart spokesman Randy Hargrove told Arkansas Business last week that he doesn’t know how many workers have enrolled their domestic partners for health care benefits. The open enrollment period ends Nov. 1. But he said the company doesn’t think extending the benefits will have “a significant financial impact” on the company.

Fidas and Elliott said they think that other businesses will look at Wal-Mart’s decision and realize that it’s now become common to offer health benefits to workers’ domestic partners.

“This could have a knockdown effect in states where they do operate,” Elliott said. “This may actually spur the company that doesn’t offer domestic benefits to offer them … just as a means to be competitive.”

Currently, 62 percent of companies in the Fortune 500 offer medical benefits to employees’ spouses and partners, according to the Human Rights Campaign’s 2013 Corporate Equality Index.

Fidas said the percentage has remained about 60 percent for a number of years.

“So it’s significant whenever we get a major business like Wal-Mart extending partner benefits,” she said.

It’s unclear how many of Arkansas’ publicly traded companies offer health benefits to their workers’ domestic partners.

Acxiom Corp. of Little Rock said it has been offering benefits to domestic partners for more than a decade.

Dillard’s Inc. of Little Rock said it doesn’t comment on personnel matters. J.B. Hunt Transport Services Inc. of Lowell also declined to comment.

But the 2013 Corporate Equality Index shows Dillard’s, Tyson Foods Inc. of Springdale and Murphy Oil Corp. of El Dorado don’t offer health benefits to their workers’ partners.

Tyson and Murphy Oil didn’t respond to an email request for comment.

The Wal-Mart Definition

Hargrove, the Wal-Mart spokesman, said that a number of municipalities and states have their own definitions of marriage, domestic partners and civil unions, so Wal-Mart decided to define it for its workers.

“By us developing a single definition for all of our associates in the U.S., we’re going to be able to ensure consistency for our associates in various markets,” Hargrove said. “They will know what the company policy is, … whether they are in a state in the East Coast or West Coast.”

Wal-Mart’s definition to receive health benefits is for an employee’s legal spouse, as long as they aren’t legally separated, or domestic partner. The domestic partner can be the same or opposite sex “as long as you live together in an ongoing, exclusive, committed relationship similar to marriage and have been doing so for at least 12 months and intend to continue to do so,” Hargrove said.

Hargrove said no proof will be required to enroll a spouse or partner in the coverage. “Our basic beliefs are built on the foundation of integrity,” he said.

The domestic benefits are one of the benefits being offered for next year’s health care coverage.

Wal-Mart also is offering a vision plan for the first time, and covered employees can receive knee and hip replacements at one of four facilities across the country at no cost to them.

The vision plan for an employee-only plan is $2.62 for every bi-weekly pay period. The health care premium for an employee-only plan will rise in 2014 from $17 to about $18 every bi-weekly pay period.

To qualify for health insurance, employees who were hired after Feb. 1, 2012, have to work more than 30 hours a week. Hargrove said employees hired before Feb. 1, 2012, have to work 24 hours a week to be eligible for the company’s health care plan.

A Matter of Competition

For employers that offer domestic partner health benefits, the cost “has been negligible,” the Human Rights Campaign said on its website.

Coverage for domestic partners was “no more expensive than for other individuals and enrollment overall is far lower than original estimates,” HRC said.

Elliott, of the Society for Human Resource Management, said the reason companies offer domestic partner benefits is to give them a competitive edge in recruiting, attracting and retaining employees.

Fidas, of the HRC, agreed. “In no way is it a political statement or any other sort of statement, but a very straightforward decision to keep pace with peers and competitors to ensure more equitable benefits for the entire workforce,” she said.

Wal-Mart has been making moves to support gay rights for at least a decade, Fidas said.

“Wal-Mart implemented workplace protection on the basis of sexual orientation,” she said. “In other words, Wal-Mart as a private employer did something that the federal law doesn’t do — they barred any kind of workplace discrimination solely on the basis of one’s sexual orientation.”

She also said that in 2011, Wal-Mart added gender identity to its nondiscrimination policy. “Again, this was something that is, and was, well ahead of lawmakers,” Fidas said. “It was a straightforward business decision to ensure that the company was keeping pace with trends among the Fortune 500.”

Elliott said he doesn’t anticipate Wal-Mart will be harmed for its move to provide benefits for its workers’ domestic partners. “Other companies have been doing this for years,” he said. “There’s been very, very little backlash.”

Wagoner, the Little Rock attorney who is challenging the constitutionality of Arkansas’ ban on same-sex marriage, said even if his case is successful, it won’t have an impact on Wal-Mart because the company already said it recognizes domestic partnerships.

In June, the U.S. Supreme Court invalidated the federal Defense of Marriage Act, in which Congress defined marriage for purposes of all federal laws to only include marriage of opposite-sex couples.

“The Supreme Court held that this law served no legitimate purpose other than targeting a certain class of people for unlawful discrimination based on sexual preference,” Wagoner wrote in his complaint, which was filed July 15.

Wagoner said that if his lawsuit is successful, it will affect those companies that don’t recognize same-sex marriage. Companies, then, “will have to treat these people the same as any other married couple,” he said.