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4 <br />for other employers and represents about seven to eight employees. <br />Participation is impacted by such factors as: <br />• Whether County domestic partner benefits cover same sex partners only or also cover <br />opposite sex partners. <br />• The criteria used to establish domestic partner eligibility. <br />• Employee willingness to disclose information about a domestic partner relationship. <br />• Tax consequences of participation. <br />Tax Issue <br />The Federal Internal Revenue Code does not recognize a domestic partner as a dependent. <br />This means that the employee will be required to pay taxes on the "fair market value" of any <br />contribution the County and the employee make for domestic partner coverage for that <br />employee. <br />Estimated Cost <br />The County cost for domestic partner coverage will be the cost of dependent coverage for any <br />domestic partners enrolled in the health insurance plan. If seven employees elected to <br />participate in domestic partner coverage, the estimated annual County cost will be about <br />$17,000 for the County's dependent health insurance contribution. There is no additional <br />health insurance surcharge for offering domestic partner coverage so the cost is that for the <br />dependent coverage only. <br />FINANCIAL IMPACT: With the adoption of the 2004 -2005 budget, the Board provided funding <br />of $10,500 for implementation of domestic partner coverage effective January 1, 2005. The <br />projected cost of the coverage effective January 1 for 2004 -05 is about $10,000 if seven <br />employees enroll. <br />RECOMMENDATION(S): The Manager recommends that the Board: <br />• Approve the implementation of benefits for domestic partners as provided under `Benefits <br />Offered" above. <br />• Adopt the Attachment 1 Personnel Ordinance revisions effective January 1, 2005. <br />