Economic Development in the South: How Not To

          Last year, 52 percent of all employers offered domestic partner health benefits, with the percentage varying widely by region and industry, according to a nationally representative sample of about 3,000 employers surveyed by benefit consultant Mercer. That's up from 31 percent in 2010.

          The biggest factors driving that change are employers' views on whether such benefits help them attract and retain desirable workers.

          "Employers started doing this because they felt they needed to be competitive in the labor market, just like with other benefits," said Paul Fronstin of Employee Benefit Research Institute, a think tank in Washington D.C. "I don't see that changing."

          The Village Voice newspaper in New York is credited with being the first private employer to offer workers domestic partner benefits in 1982. In 1995, Vermont became the first to offer coverage to state workers.

          "There's been a steady growth for a long time," said Joan Smyth, a partner at Mercer. In the early days, some employers worried that adding coverage for domestic partners could make their costs skyrocket by attracting people with higher-than-average health risks, she said, but "that did not happen."

          The District of Columbia and almost half of states currently offer benefits to domestic partners or same-sex spouses of state workers, according to the advocacy group Human Rights Campaign.

          Same-sex partners of federal workers are not eligible for coverage under the Federal Employees Health Benefits Program (FEHB) because the Defense of Marriage Act, passed in 1996 and signed into law by President Bill Clinton, defines marriage as a legal union between a man and woman, according to the FEHB website. That law is being challenged and may well end up before the Supreme Court. The Obama administration has said it will not defend the statute.

          In the Mercer survey, coverage of same-sex partners was most common in the West, with 79 percent of large employers offering such benefits. It was least common in the South, at 28 percent. Big differences were also noted within industries. Among manufacturing firms, for example, the coverage rate ranged from a high of 96 percent for pharmaceutical companies to 18 percent for machinery and heavy equipment makers.

          Public-sector jobs had a lower rate of coverage, averaging 26 percent across state, county and municipal workers, the Mercer survey found.