TO MEMBERS OF THE COMMITTEE ON FINANCE:

ITEM FOR DISCUSSION

For Meeting of September 18, 1997

FOLLOW-UP ON THE JULY DISCUSSION OF DOMESTIC PARTNER BENEFITS

At the July 1997 Regents' meeting, Item 506 (Report on Domestic Parner Benefits) was presented to the Committee on Finance for discussion. At the conclusion of the discussion, the President was asked to consider the Regental views expressed at that meeting and to develop appropriate plans concerning the extension of benefits to domestic partners of University of California faculty, students, staff, and retirees.

The President, after consultation and consideration of such issues as the competitiveness of the benefits offered to UC faculty and staff, costs to the University, UC retirement policies, and administrative and operational matters, proposes to institute domestic partner benefits in two areas that are not currently available at the University of California. This item presents information regarding (1) health care benefits for same-sex domestic partners; and (2) guidelines for student family housing that will allow Chancellors to broaden eligibility to include new categories of students, including students with domestic partners. The President is prepared to implement these two items, under his existing authority, unless discussion indicates otherwise.

HEALTH CARE BENEFITS FOR SAME-SEX DOMESTIC PARTNERS

In 1994 the Academic Council recommended that health, pension, and other benefits be extended to the domestic partners of UC faculty and staff. Since then, the Office of the President has consulted extensively throughout the University community. This consultation process among faculty, staff, students, senior management, Chancellors, the Academic Senate, the Council of UC Staff Assemblies, and the UC Student Association revealed strong support for offering such benefits.

This widespread support for domestic partner benefits within the University community was among the issues covered in the presentation to The Regents in July, along with competitiveness issues, costs associated with health care benefit options and retirement benefit options, the definition of the term "domestic partner," and student family housing.

During the Committee's discussion the point was made that the University of California is not in step with a national trend, in both public and private institutions, toward offering some form of domestic partner benefits, and that the lack of such benefits is affecting the University's ability to recruit and retain the most qualified faculty and staff, as well as the most outstanding graduate students. Nationally, the list of universities granting domestic partner benefits is growing. Of UC's comparison eight universities, four private institutions (Stanford, MIT, Yale, and Harvard) and two of the four public universities (the University of Michigan and SUNY Buffalo) offer health benefits to the domestic partners of their employees and retirees. Such benefits are becoming more widely available in both the public and the private sectors. Their availability is thought to strengthen competitveness, improve morale, and promote diversity in the workforce.

After consultation about these issues, the President has concluded that offering health care benefits to same-sex committed partners would strengthen the University's ability to compete for faculty and staff, without involving significant costs. At the July 1997 Regents' meeting, the public comment period included many faculty and staff testimonials about the commitments exemplified in domestic partner relationships within the University community. Many emphasized the negative impact the current lack of health care benefit coverage has on University employees. The adoption of such benefits would also make the children of same-sex domestic partners eligible for health care benefits.

ELIGIBILITY FOR DOMESTIC PARTNER BENEFITS

To be eligible for domestic partner benefits, certain prerequisites would need to be fulfilled. These prerequisites are still being developed but are likely to include the following types of requirements:

The first prerequisite would be to meet the University's definition of domestic partner--an unmarried partner of the same sex as the University employee who is eligible for benefits. In addition, both partners must be at least 18 years of age; unmarried to any other person and uncommitted to any other domestic partner; not related by blood to a degree of closeness that would prohibit legal marriage in California; living together in a long-term relationship of indefinite duration with an exclusive mutual commitment similar to that of a marriage; and financially responsible for each other's well-being and for each other's debts to third parties.

The second prerequisite would be to sign and file with the University an affidavit declaring that the above-mentioned conditions have been met and that the partners have shared a common residence for at least twelve consecutive months. The third prerequisite would be to supply documentary proof of mutual financial support.

COST OF DOMESTIC PARTNER BENEFITS

Financially, the University estimates the annual cost of providing domestic partner health benefits (medical, dental, and vision care) to same-sex partners at UC would range from $1.9 million to approximately $5.6 million. These estimates are based on the experience of other institutions and businesses, as the University has no means to determine with accuracy the number of individuals who would sign up for benefits. Generally, the University of California portion of a benefit expense is borne by the fund source that pays the employee's salary. For State-supported faculty and staff, the General Fund budget pays for the employer's benefit expense. For a hospital worker at one of the UC Medical Centers, the Medical Center's revenue pays the employeer's benefit expense. The portion of these estimated expenses borne by the General Fund would be approximately 38%. Campuses support the funding cost for retiree health benefits through a general overhead fee charged against all retirement-covered salary. Those costs are included in the estimate range of expenses noted above. Provision for these benefits could be included in the next open enrollment and be effective January 1, 1998.

GUIDELINES FOR STUDENT FAMILY HOUSING

Since the inception of student family housing programs at the University of California, shared occupancy of units has been substantially limited to married couples and to students with children. In recent years, however, the changing nature of the student community and fluctuations in local housing markets have led students in different kinds of shared living relationships to request student family housing. Typically these requests come from undergraduate, graduate, and professional students living with domestic partners or with blood relatives--often a parent, brother, or sister. Further, they come at a time when demand for student family housing among those historically accommodated--married couples, and married and unmarried students with children--has diminished at some compuses.

The possibility of broadening the eligibility categories for student family housing was discussed throughout the University community and has gained the widespread support of students, faculty, and staff. The continued fiscal viability of student family housing programs, competition with other universities to attract the most qualified students, and concern for the morale and well-being of UC students all play a role in this support.

Authority over the administrative aspects of student family housing is vested with the Chancellors under Regents' Standing Order 100.6, which charges each Chancellor with responsibility for the organization and operation of the campus, its internal administratin, and its discipline. This authority includes establishing eligibility criteria for occupancy of student family housing units.

The President has concluded that there are advantages to issuing systemwide guidelines for student family housing at this time. These guidelines, dealing with categories of eligibility for occupancy and housing assignment priorities, would allow individual Chancellors discretion and maximum flexibility in determining housing eligibility at their campus while providing consistency across campuses. In essence, these guidelines would reaffirm that the Chancellors, under their existing authority, may adjust the housing applicant elegibility pool to meet local market conditions and the needs of their individual campuses, including the accommodation of students and their domestic partners, students living with blood relatives, and others, subject to the understanding that students with children will continue to be guaranteed first priority.

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