Some of the most significant impacts AB 205 will have in the employment arena are described below.

Who is a Domestic Partner Under the Law?
Only domestic partners who have registered with the State of California qualify under the new law. Pursuant to Family Code §§ 297 and 298, a domestic partnership may be established by filing a notarized Declaration of Domestic Partnership with the Secretary of State. At the time of the filing, all of the following requirements must be met:

1. Both persons have a common residence;
2. Neither person is currently married to someone else or is a member of another domestic partnership;
3. The two persons are not related by blood in a way that would prevent them from being married to each other in California;
4. Both persons are at least 18 years of age;
5. Both persons are capable of consenting to the domestic partnership; and
6. One of the following: (A) Both persons are members of the same sex; or (B) Both persons are members of the opposite sex and one or both of them is over the age of 62.

Although many municipalities in California provide for domestic partnership registration, a local domestic partnership registration alone is not sufficient to trigger the rights provided under state law. In addition, California law does not recognize domestic partnership registrations from outside of the state.

Should Domestic Partners be Treated Like Spouses for Purposes of Health Benefits?
The new law does not explicitly require employers to extend health benefits to domestic partners. Since AB 25 took effect January 1, 2002, providers of health insurance have been required to offer domestic partner coverage to employers who wish to include it in their benefit plans. The law did not mandate, however, that employers provide health benefits to their employees’ domestic partners.

In all likelihood, AB 205 will be held to mandate that if an employer extends health benefits to spouses of employees, it must also allow coverage for domestic partners. The reason is twofold. First, the law clearly states that registered domestic partners are entitled to the same benefits that are granted to spouses whether those benefits derive from "statutes, administrative regulations, court rules, government policies, common law, or any other provisions or sources of law." Though there is no law requiring employers to extend health benefits to spouses, public employers that provide health benefits to employees invariably act under the auspices of a local ordinance, rule or regulation. These documents almost certainly qualify as "any other provisions or sources of law."

Second, the new law provides that domestic partners have the same nondiscrimination rights as spouses. (Family Code § 297.5 (a) and (f)). Under the Fair Employment and Housing Act (FEHA), an employer may not discriminate on the basis of marital status. Therefore, if an employer were to extend health benefits to spouses but not domestic partners, arguably the employer would be making a distinction based on marital status. Given AB 205's broad protection of domestic partners, an employer’s decision to extend coverage to spouses but not domestic partners may violate the law for this reason as well.

In any case, under SB 2, which takes effect January 1, 2006, employers with more than 200 employees will be required to provide health coverage to their employees and the domestic partners of those employees. The following year, employers with between 20 and 199 employees will be obligated to meet the same conditions. (Please note that Proposition 72, which will appear on the November 2004 ballot, seeks to repeal SB 2). In addition, beginning January 1, 2007 all businesses with state contracts worth more than $10,000 will generally be required to provide domestic partner benefits for employees in same-sex relationships if the employer offers spousal and dependent coverage under their group health plans. (Public Contract Code § 10295.3).

However, the new law is not without exceptions. For example, it does not modify eligibility for long-term care under the Public Employees’ Long Term Care Act.

Should Domestic Partners Be Added to An Employee's Health Plan During the 2004 Open Enrollment Period?
There is some ambiguity as to when employers must allow domestic partners to be added to an employee's health plan. On the one hand, under AB 205, employers likely have a duty to extend health benefits to domestic partners, if those benefits are provided to spouses, on January 1, 2005. It is reasonable, therefore, to concluded that a domestic partner should be added to an employee’s health plan during the current open enrollment period since the benefit will not take effect until the following calendar year.

On the other hand, on September 13, 2004 the Governor signed AB 2208, known as the California Insurance Equality Act. That bill requires health care service plans and health insurers to provide equal coverage to spouses and registered domestic partners when the policy is "issued, amended, delivered, or renewed in this state on or after January 1, 2005." According to the Legislature, the purpose of AB 2208 is to bring the law "in line with requirements made in ... AB 205." Nonetheless, under AB 2208 domestic partners could be excluded from health plans until those health plans are updated, which could be well after January 1.

We believe that the most prudent course of action for an employer would be to allow registered domestic partners to be added to health insurance plans during the current open enrollment period. Apart from the clear language of AB 205 which places a duty on employers - and specifically public employers - to provide equal benefits beginning January 1, 2005, AB 205 and AB 2208 are not necessarily incongruous. For example, if an insurance company refused to alter an existing policy before January 1, 2005, it would not be in violation of the law under AB 2208. An employer’s obligations under AB 205, however, would require it to obtain equal benefits from a company willing to meet the employer's legal obligations. Only after January 1, 2005 would the insurance company be legally compelled to provide the same benefits to spouses and domestic partners.

How Does the New Law Impact an Employee's Right to Family and Medical Leave?
Currently, both the federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA), permit eligible employees to take up to 12 weeks of leave to care for a parent, spouse, or child with a serious health condition. AB 205 extends the right of an employee under the CFRA to take family and medical leave for the serious health condition of a registered domestic partner. It does not, however, extend that right under the FMLA.

This difference between the two laws may have unintended consequences. An employee who takes leave to care for a registered domestic partner may be eligible for more family and medical leave those with spouses. For example, if an employee took 12 weeks of leave to care for a registered domestic partner with a serious health condition, that employee would have exhausted his or her leave under the CFRA. Since that leave would not apply to the FMLA, the employee would still be entitled to 12 more weeks of leave under federal law. Yet an employee who took 12 weeks of leave to care for a spouse with a serious health condition would have exhausted all of his or her leave under both the FMLA and CFRA, because they would have run concurrently.

How Does the New Law Interact with an Employer’s COBRA Responsibilities?
AB 205 expressly states that it "does not amend or modify federal laws or the benefits, protections, and responsibilities provided by those laws." (Family Code § 297.5(k)). When the Legislature passed AB 25, it explicitly stated that it did not expand an employer’s obligation to provide COBRA health coverage to domestic partners. Under the new law, however, there is some ambiguity.

Clearly, domestic partners will not be eligible for COBRA coverage under federal law unless he or she also qualifies as a dependent under Internal Revenue Code § 152. In that respect, there is no change to the status quo. Whether the domestic partner is entitled to Cal-COBRA benefits, however, is another matter.

An employee and his or her dependents may be entitled to Cal-COBRA coverage if he or she has exhausted federal COBRA coverage. Conceivably, this coverage could extend to domestic partners even if they do not meet the federal definition of "qualified beneficiaries," which is limited to the employee and his or her spouse or child. (26 CFR § 54.4980B-3). Under Family Code § 297.5(e), to the extent that California law relies on federal law in a way that results in domestic partners being treated differently than spouses, registered domestic partners are to be treated by California law as if federal law recognized domestic partners in the same manner as California law.

Therefore, when determining whether a domestic partner is eligible for Cal-COBRA coverage, federal COBRA must be read as if domestic partners were also qualified beneficiaries. Thus, while domestic partners would not be eligible for benefits under federal COBRA, they would be eligible for any extension of benefits under Cal-COBRA. Nonetheless, we suggest that employers discuss this issue with their carriers to ensure compliance under the terms of their individual policies.

Do Employers Need to Amend Their Policies?
Under AB 205, the FEHA will extend the protection against "marital status" discrimination to individuals based on their "domestic partner" status. (Government Code section 12940(a)(3)(A)). Employers will want to insure that their policies prohibiting discrimination and harassment are updated to include domestic partners and to provide training to their employees on this new development. Training is especially important given that domestic partnership is a hotly debated political issue and employees expressing their opinion on this subject need to be mindful that discrimination based on domestic partnership status is unlawful.

Other policies will have to be updated as well. For example, employers will want to add domestic partners to any policies which reasonably regulate spouses from working in the same department, division, or facility. Similarly, a bereavement leave policy which allows an employee time off for the death of a spouse or in-law will need to be changed to cover domestic partners. Instead of altering each policy, however, employers may simply want to add a policy stating that references to "spouses" shall be read to include domestic partners as permitted by California law.

Finally, employers should be aware that they may need to do more than merely update their policies. For example, public retirement plans must now provide survivor benefits for domestic partners equal to those provided for a spouse. If a public employer's plan does not already provide this benefit to domestic partners, the employer will need to take the necessary legal steps to amend the retirement plan accordingly. The impact of AB 205 on private retirement plans is not fully known. ERISA may preempt the apparent obligations of state law in this regard.