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BioTech Company To Offset Tax Burden For Married Same-Sex Employees

WESTON, MA -- A Vice-President of a drug development team at a leading bio-tech firm in this suburban Boston township brings about $3,000 less per year than his colleagues because he is gay. Amit Rakhit earns the same salary as other vice presidents at the Weston-based biotech company Biogen Idec, but unlike his married straight co-workers, he is taxed on income that goes toward his husband’s health insurance plan; his colleagues contributions for their spouses, that money is tax-free.

Under the terms of the Defense of Marriage Act,(DOMA), even in states like Massachusetts where gay marriage is legal, same sex spouses don’t get a tax break from Uncle Sam on medical, dental, and vision insurance because gay marriage isn’t recognized under federal law.  

The Boston Globe reports that beginning January 1, Biogen Idec will begin addressing this inequity, joining just a few dozen companies in the United States that offer a similar type of reimbursement, including three based in Massachusetts.

“We cannot let our employees go one more year with this additional burden,” said Javier Barrientos, director of global inclusion at Biogen Idec. “We’re part of the innovation economy, and we’re looking for exceptional talent, and exceptional talent comes in all backgrounds.” 

Money spent on health care premiums is not considered taxable income, allowing employees to use pre-tax dollars to buy health insurance. While heterosexual couples get the tax break, same-sex couples do not. To negate the impact, Biogen Idec will add money to affected employees’ paychecks equal to the amount of taxes taken out for their spouses’ benefits — and their children’s, too. This practice, known as grossing up a worker’s pay, will restore an average of $2,000 to $5,000 a year to around 40 of Biogen Idec’s nearly 4,000 US employees, costing the company around $120,000 a year.

Biogen Idec plans to offer this benefit to employees in every state, even those where same-sex marriage isn't legal, such as North Carolina, where the company has a big presence. Employees simply have to provide proof of marriage, domestic partnership, or a civil union to receive compensation.

Rakhit, who is working on a drug to treat amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease, estimates that he has paid tens of thousands of dollars for this “unfair tax” since he got married in Boston in 2004.

The fact that the company has displayed this willingness to start reimbursing him for this financial inequity makes him realize the company is supportive of its employees’ lives, he told The Globe. It also reflects a bigger shift on LGBTQ equality rights battles underway across the nation;

“It’s a growing realization that this is not what the US is founded on,” he said. “It’s equality and freedom for all, so you can’t say that in one breath and then in another breath take away the freedom and equality of a certain group.”