WESTON, Mass. — A Massachusetts-based biotechnology company announced it will join just a few dozen companies in the United States to supplement gay employees for taxes incurred when covering their spouse or partner in the company’s health plan — taxes that are not paid by their straight counterparts.
Under the terms of the Defense of Marriage Act (DOMA), even in states like Massachusetts where same-sex marriage is legal, gay employees don’t get a tax break on spousal coverage for medical, dental, and vision insurance because same-sex marriage isn’t recognized under federal law.
Biogen Idec said it will begin addressing the inequity, joining just a few dozen companies in the United States that offer a similar type of reimbursement, including three based in Massachusetts, reported the Boston Globe.
Money spent on health care premiums is not considered taxable income, allowing employees to use pretax dollars to buy health insurance. While heterosexual couples get the tax break, same-sex couples do not. To negate the impact, Biogen Idec will add money to affected employees’ paychecks equal to the amount of taxes taken out for their spouses’ benefits — and their children’s, too. This practice, known as grossing up a worker’s pay, will restore an average of $2,000 to $5,000 a year to around 40 of Biogen Idec’s nearly 4,000 US employees, costing the company around $120,000 a year.
Biogen Idec plans to offer this benefit to employees in every state, even those where same-sex marriage isn’t legal, such as North Carolina, where the company has a big presence. Employees simply have to provide proof of marriage, Domestic Partnership, or a civil union to receive compensation.
“We cannot let our employees go one more year with this additional burden,” said Javier Barrientos, director of global inclusion at Biogen Idec. “We’re part of the innovation economy, and we’re looking for exceptional talent, and exceptional talent comes in all backgrounds.”