Fears of numerous and costly HIV and AIDS claims prevented many organizations from considering such a bold move. Even insurers were uneasy. The few insurance companies that would add these types of benefits to a policy added surcharges in anticipation of excessively high claims (University of Iowa 4). Another area of anticipated costs was utilization of the benefits. "Early estimates from the Employee Benefits Research Institute indicated that three to four percent of the workforce would use the benefits" (Forman 2). These projections indicate that insurance programs would surely realize a significant increase in administrative costs due to the greater number of program participants. .
Despite the concerns with costs, companies slowly began offering domestic partner benefits in an effort to meet the needs of a changing workforce. Because of this, today's employers have the benefit of data gathered over the last 15 years that has proven that the initial cost concerns were unfounded. There has been no evidence of extremely large HIV or AIDS related claims. In fact, research from The Segal Company, a New York based human resources consulting firm, indicates that costs associated with HIV and AIDS are typically lower than more common conditions such as heart disease, premature births, and cancer (Wells 4). Furthermore, indication that unusually high claims have not materialized is the fact that the vast majority of insurance companies have done away with the surcharges they initially imposed because they simply were not justified (University of Iowa 4). Additionally, the number of employees utilizing the benefits is also lower than expected. There are three primary reasons for this: (1) domestic partners do not meet the IRS definition of "dependent", thus the cost of the benefit is taxable, (2) some partners already have insurance and do not wish to change, and (3) some people do not want to reveal their sexual orientation at work.
