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An independent arbitrator's decision in a contract disagreement could be the impetus for change in a major Vermont insurance agency's handling of domestic partnership benefits.
Last month, an arbitrator settling a dispute between the city of Winooski and the association representing its police department ruled that the city must provide health insurance for domestic partners of city employees.
A wrinkle developed when the city learned that Blue Cross Blue Shield of Vermont, its current insurance provider, offers domestic partner benefits only to entities with 50 or more employees. The city employs only 42 people. Michael O'Brien, a Winooski city councilor, asked, "How can we offer a policy that we can't get?"
The difference in policy came as a surprise to the state as well.
"I didn't realize that they discriminated between large and small groups," said Elizabeth Costle, Vermont's commissioner of banking, insurance, securities, and health care administration.
Although state laws do not require insurers to offer domestic partner benefits nor to make them available to all clients equally, she said she had contacted Blue Cross Blue Shield Vice President and General Counsel Bob Opel. "I told him that they had better change their policy or the legislature would probably make them change it," she said.
Representative Bill Lippert of Hinesburg said he would be willing to introduce such a bill himself. Although he acknowledged chances were "slim" the state could require insurers to offer domestic partner benefits, he felt the distinction between employer sizes could be eliminated.
But according to Opel, it may not take legislation for Blue Cross Blue Shield to change its policy.
He denied allegations that the policy is based on a fear of insuring more people with HIV and AIDS. "We are the largest insurer by far of direct payers in the state," he said. "If someone has HIV or AIDS in Vermont, we probably already insure them, and if we don't, we would."
Opel said Blue Cross Blue Shield didn't know how to assess costs or identify legitimate domestic partners when the coverage issue first came up six years ago. Because larger customers handle their own administration and because cost fluctuations can legally be reflected in their premiums almost immediately, he said, the company tested benefits in that market first.
"Time has passed," he said. "Domestic partnerships are more widely accepted and documented, and we've learned that there are no different risk characteristics involved."
Opel said there has been "active internal discussion" at Blue Cross Blue Shield for several months about offering insurance to partners in smaller groups. In light of the Winooski ruling, he said, the discussion is "now being actively revisited."
But there is no guarantee any change in company policy will come in time for Winooski. The city has 60 days from the arbitrator's July ruling to act.
The city council will meet in executive session to discuss the matter on August 3. "We have to change things," said O'Brien. "We'll have to come up with some options."
The ruling came after a two-year-old dispute that started when Winooski police officer Jesica Kraus requested health insurance benefits for her partner. After city council refused requests from the police association and from Kraus herself to add domestic partner language to the contract, the matter went to binding arbitration.
Although encouraged by recent developments, Kraus said, "Having heard 25 different explanations and excuses over the past two years, I'm cynical."
