Judge: State can't cancel benefits of gay employees - East Valley Tribune: Arizona

Judge: State can't cancel benefits of gay employees

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Posted: Friday, July 23, 2010 6:21 pm | Updated: 8:19 pm, Mon Jul 26, 2010.

Calling it illegal discrimination, a federal judge has blocked the state from cancelling insurance benefits for the domestic partners of gay and lesbian state and university employees.

In an order issued Friday, U.S. District Court Judge John Sedwick rejected arguments by attorneys for the state that there is nothing unfair in the law, approved by legislators last year and signed by Gov. Jan Brewer. They called it a “neutral policy’’ that treats all unmarried employees equally.

Sedwick acknowledged that the provision, tucked into the state budget, is not discriminatory on its face.

But the judge cited the Arizona constitutional amendment that bars same-sex marriages. What that means, Sedwick said, is the state is making benefits for the partners of its employees available “on terms that are a legal impossibility for gay and lesbian couples.’’

“As a result, (the law) denies lesbian and gay state employees in qualifying domestic partnership a valuable form of compensation on the basis of sexual orientation.’’

Sedwick also brushed aside claims by the state that providing benefits to the partners of gay and lesbian employers would mean cuts in other services.

He said the evidence shows that the cost of providing benefits to then partners of gay and lesbian workers is no more than 0.27 percent of total health care spending by the state. And even if cuts had to be made elsewhere, the judge said, that still doesn’t make the law right.

“It is not equitable to lay the burden of the state’s budgetary shortfall on homosexual employees, any more than on any other distinct class, such as employees with green eyes or red hair,’’ the judge wrote.

Gubernatorial press aide Paul Senseman said Brewer and her staff ``will review the court decision’’ with attorneys and decide next week what to do next.

The injunction actually affects only what the judge called “a small fraction’’ of the more than 800 state and university employees who are now getting domestic partner benefits.

The ruling does not affect unmarried heterosexual couples who also gained coverage as part of a change in state policy pushed through by the administration of former Gov. Janet Napolitano. Absent some change in policy -- or a different lawsuit -- they will lose their domestic partner benefits at the end of this year.

Attorney Dan Barr said the lawsuit did not cover these “straight’’ unmarried workers because they are in a different legal situation: Unlike gays, they can get married to obtain benefits.

In making that 2008 change, Napolitano staffers argued that offering the benefits will help the state and universities get and keep qualified workers.

But the process of doing that by rule change rankled legislators. After Napolitano quit last year to take a job in the Obama administration, the Republican-controlled Legislature tucked a provision into the budget defining what constitutes “dependents’’ for the purpose of insurance coverage. That specifically excluded the partners of those who are not married, whether gay or not.

With insurance benefit contracts already in place by the time the law took effect, the effective date of that change was pushed back to the end of this year.

The Lambda Legal Defense and Education Fund responded by filing suit on behalf of state workers, arguing the change denied equal protection to gay and lesbian employees.

Sedwick said some of the arguments of the state hold no water.

One of them is that Arizona is saving money by reducing the number of dependents getting coverage. Another is that there is a legitimate government interest in favoring marriage.

The state figured it paid out about $4 million in claims for domestic partner benefits in the first year of the change, and $5.5 million in the just completed fiscal year, though there were no figures about how much of that was related solely to gay and lesbian employees.

“If the state’s interest were simply saving money, the companion goal of promoting marriage would seem to do the opposite,’’ Sedwick wrote. “If (the law) succeeds in promoting marriage, the state will have to provide health benefits to more people, thus increasing the state’s expenditures.’’

Anyway, the judge said, nothing in the law actually can promote marriage, at least not among gays and lesbians, given the prohibition against same-sex nuptials.

Friday’s order is not the last word, as there will still be a full-blown trial to sort out whether the law is legal. But Sedwick, in issuing the injunction, said the challengers to the statute have shown him they are likely to succeed at that time.

The judge also said that, without the injunction, the gay and lesbian workers who would lose domestic partner benefits at the end of the year would suffer “irreparable harm’’ that could not be remedies by giving them a financial settlement later should they win the case.

“Like the loss of one’s job, the loss of one’s benefits does not carry merely monetary consequences,’’ Sedwick wrote. “It carries emotional damages and stress, which cannot be compensated by mere payment of back wages.’’

He said some of those challenging the law say that they will not be able to get health coverage on the private market, as their partners have pre-existing conditions which make them uninsurable.

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