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F I S C A L I M P A C T R E P O R T

SPONSOR Stewart

DATE TYPED 3/8/05

HB 86/aHBIC

SHORT TITLE Domestic Partner Benefits

SB

ANALYST Rosen

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

NFI

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB340

SOURCES OF INFORMATION

Responses Received From

Attorney General’s Office (AGO)

Department of Corrections (DOC)

Retiree Health Care Authority (RHCA)

Public Regulation Commission (PRC)

SUMMARY

Synopsis of HBIC Amendment

House Business and Industry Committee amendment to House Bill 86 deletes part of the original

bill’s definition of a domestic partner, striking: “A domestic partner is a family member, and

domestic partners constitute a family; the dependent child of a domestic partner may be included

as a family member at the election of the insured domestic partner; a domestic partner is included

in the term "spouse".”

Significant Issues

PRC reports the deleted language was unnecessary.

RHCA reports the amendment should obviate debate on what constitutes a “family” and should

limit the bill’s impact to coverage of unmarried partners.

House Bill 86/aHBIC -- Page 2

Synopsis of Original Bill

This bill amends the Insurance Code and enacts new sections of law to allow for the purchase

and coverage of health and life insurance for “domestic partners”. It also amends the Medical

Care Savings Account Act (NMSA Section 59A-23D-2 1978 comp.) to allow coverage for do-

mestic partners and children of domestic partners. The Act defines “domestic partner” and gen-

erally requires that they be an adult in a mutually exclusive domestic relationship, sharing a pri-

mary residence for twelve or more consecutive months with another person. The domestic part-

ner must also be jointly responsible for the common welfare and share financial obligations with

that other person. A “domestic partner” is defined as a family member and is included within the

definition of “spouse” for insurance purposes. The Act does not make a distinction between

same-sex and opposite-sex domestic partners.

The Act allows an insurer to require an affidavit of domestic partnership, confers an “insurable

interest” in the life of a domestic partner upon the other partner, allows group health plans to

voluntarily offer coverage to domestic partners, allows small employers to offer health insurance

coverage to domestic partners of their employees, and allows employees with Medical Care Sav-

ings Accounts to pay health costs for their domestic partners, or children of domestic partners.

Significant Issues

This bill highlights the policy issue of whether to allow life and health insurance coverage of

persons who meet the definition of “domestic partner”, regardless of marital status or gender.

PERFORMANCE IMPLICATIONS

Group health providers who choose to offer coverage for domestic partners would be required to

process claims on their behalf. AGO indicates there has been concern expressed regarding a pos-

sible increase in premiums for those already participating in group health plans.

CONFLICT, DUPLICATION, COMPANIONSHIP OR RELATIONSHIP

RHCA reports SB340 proposes coverage of domestic partners specifically under the Retiree

Health Care Act, Sections 10-7C-1 through –19.

TECHNICAL ISSUES

AGO indicates several insurance companies in New Mexico already offer domestic partner bene-

fits and the federal ERISA law may pre-empt state law attempting to regulate employer spon-

sored benefit plans.

The Governor, by Executive Order 2003-010, required the extension of state insurance benefits

to domestic partners effective July 1, 2003.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

AGO indicates the difficulties that unmarried domestic partners face now in procuring life and

health insurance under current New Mexico law could continue.

JR/yr