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Teachers Retirement System of Texas

Texas versus AirBnB update

From last week:

The Texas Comptroller’s office said Tuesday it’s reviewing the inclusion of Airbnb on a list of companies that boycott Israel and are banned from doing business with the state after the company announced a change to its policy for listings in the West Bank.

The home-sharing company said in a statement that it’s reversing a plan announced this November to remove about 200 rental listings from the territory, whose ownership is disputed by Palestinians. The company said it will donate the profits to humanitarian aid groups.

“Airbnb has never boycotted Israel, Israeli businesses, or the more than 20,000 Israeli hosts who are active on the Airbnb platform,” the company said in the statement. “We have always sought to bring people together and will continue to work with our community to achieve this goal.”

The company’s decision to delist the properties had prompted the state last month to blacklist it in keeping with a 2017 law that bans state agencies from contracting with or investing in companies that boycott Israel. The law was touted by Republicans, including Gov. Greg Abbott, as a way to show solidarity with Israel.

See here for the background. As I’ve said before, governments base policy decisions on who they do and don’t want to do business with all the time, so this policy is in and of itself not remarkable. It’s dumb and misguided, but not unusual. It’s also led to some other consequences.

Texas state agencies are beginning to divest nearly $72 million worth of stock in a company said to be boycotting Israel — the first financial move after a year-old law that bars Texas agencies from investing in such companies.

Two major state pension funds — the Employees Retirement System of Texas and Texas Permanent School Fund —own $68 million and about $4 million, respectively, worth of stock in DNB ASA, a Norwegian financial services company, officials said, though the company has denied it boycotts Israel.

[…]

The Comptroller’s office, upon the advice of two contracted consulting groups, identified four companies as having boycotted Israel, though all of them deny that they engage in any punitive ban.

Employees Retirement System spokeswoman Mary Jane Wardlow said the fund began divesting March 1, 2018, when it had about $68 million invested in DNB, and as of early April had divested about half that amount. Divestment should be complete by June, Wardlow said.

The Texas Permanent School Fund did not respond to a request for information on its divestment.

The state has no direct holdings in any of the other three companies on its divestment list, according to notifications to the state obtained by Hearst Newspapers.

Two of the six state agencies affected by the law —Texas County and District Retirement System and Texas Municipal Retirement System — had indirect investments in DNB, records show.

And three of the six state agencies affected by the law — the Employees Retirement System of Texas, Texas Municipal Retirement System and Teacher Retirement System of Texas — had indirect investments in Airbnb. (The only agency to disclose how much, ERS, had about $460,000-worth.)

But the law doesn’t require state governmental entities to divest from indirect holdings. It only requires them to send letters to the managers of the investment fund in question and request that they remove blacklisted companies from the fund or create a similar fund without those companies.

If the manager can’t come up with a fund with “substantially the same management fees and same level of investment risk and anticipated return,” the law requires no further action.

I mean, I don’t think this was a good idea, but if you do, then this is what you signed up for.

On to the benefits

Now that same sex marriage is the law of the land, Texas employers need to make sure that the spousal benefits they offer apply to all spouses.

RedEquality

“If an employer provides benefits to anyone who is currently married, they must now treat gay and lesbian employees the same and offer them the exact same benefits,” said Neel Lane, a San Antonio lawyer at corporate law firm Akin Gump Strauss Hauer & Feld.

“The ruling has an enormous impact on employers and employees in Texas,” said Lane, who represents on a pro bono basis a gay couple in Texas who have challenged the state’s ban on same-sex marriages.

[…]

Lawyers said they have been inundated with calls – mainly from small- and medium-sized business owners – seeking legal advice on updating employment and benefits forms but also asking if there are ways under Texas law to avoid having to make changes.

James Griffin, an expert on employment benefits and federal tax law at Jackson Walker in Dallas, said the legal advice he is giving his business clients is simple.

“Don’t waste your time looking for ways to defeat this,” Griffin said. “The Supreme Court decision is very broad. This issue is done. Make the changes and move on.”

Griffin and other lawyers say most large corporations implemented policies years ago that extend benefits to same-sex couples.

But they say some Texas-based companies that operate exclusively within the state have not addressed the issue because they have never had employees come forward and say they are gay and want benefits for their partners. Lawyers say that because Texas political leaders have been adamantly anti-same-sex marriage and benefits, many workers were afraid to step forward.

“Now, because of the Supreme Court ruling, a lot of people who have been reluctant are going to raise their hand for the benefits and the companies have to address it,” said Mark Shank, an employment law partner at Gruber Hurst Elrod Johansen Hail Shank in Dallas.

Among the employers who have already taken action is the state of Texas.

The state’s bureaucracy is moving forward to comply with the U.S. Supreme Court’s gay-marriage decision, even as state elected officials – including Gov. Greg Abbott – have lambasted the landmark ruling.

Starting Wednesday – less than a week after the decision – the Employees Retirement System of Texas, the University of Texas System and the Texas A&M System will extend benefits to spouses of gay and lesbian employees.

That means the state’s largest employer, the State of Texas, will join the list of those providing equal benefits to same-sex partners.

The decision is latest sign that state government is accepting the ruling, which struck down gay marriage bans in Texas and other states. And that bureaucratic churn provides a notable counterbalance to the saber-rattling by Abbott and other top Republicans.

“This is all kind of new for us,” said Catherine Terrell, a spokeswoman for the Employees Retirement System of Texas. “We’re just looking at what other employers have seen.”

The state employees some 311,000 people, according to the state auditor’s office. Terrell said ERS, which handles benefits for most state employees, was anticipating that about 1,500 spouses of gay employees would now enroll for benefits.

A “notable counterbalance to the saber-rattling”. I like that. When you consider all the county clerks who ignored Ken Paxton’s legal “advice”, it’s quite clear who’s really out of touch here. That doesn’t mean they’re going to acknowledge it any time soon.

The Teacher Retirement System of Texas is also providing these benefits now; they weren’t included in the Trail Blazers post. Regarding the UT and A&M systems, I like the quote in this Trib story about that:

Professors at Texas’ public universities celebrated the extension of benefits, saying the policy change will offer relief for many gay and lesbian employees and reduce the rate at which they leave Texas institutions in search of schools that accommodate same-sex couples.

Patrick Burkart, a communications professor at Texas A&M University, said extending benefits for same-sex couples will put the university on the “same competitive footing” as other research universities across the country because it will help retain and recruit top faculty and staffers.

“What we’re going to find out is how expensive it’s been to keep a discriminatory policy on the books as we have,” said Burkart, the secretary and treasurer of the A&M chapter of the American Association of University Professors, which has pushed for the benefits for years.

Burkart, who has served on several faculty search committees, indicated that the previous policy denying benefits to same-sex spouses or partners kept potential candidates from applying for posts at the school.

Hundreds of colleges across the country offer benefits to same-sex spouses or same-sex domestic partners.

”I think our university has suffered for it, and now is a great time to catch up and gather our strengths,” Burkart said.

I’m willing to bet none of our “saber-rattling” state leaders ever considered that, and if any of them did, I seriously doubt they cared. It is of course one big reason why so many private employers have been doing this for so long – you’ve got to keep up with the competition. Burying your head in the sand never works.

Let’s go back to the first story for a minute to see an example of another place where they can demonstrate that:

Legal experts also say the first major domino likely to fall will occur in federal court in Wichita Falls, where a federal judge in March, at the request of Gov. Greg Abbott and Attorney General Paxton, issued an injunction that prevented the federal Family and Medical Leave Act from applying to same-sex couples in Texas.

Because of the ruling, Texas was one of four states in the U.S. where FMLA benefits have been denied to gay couples involved in civil unions.

“That decision will almost certainly be reversed right away,” said David Coale, a partner at Lynn Tillotson Pinker & Cox. “State political leaders may try to fight it, but they are going to lose, and then they are going to have to pay a lot of money to lawyers for pursuing frivolous legal claims.”

See here and here for the background. The lawsuit involved federal employees in Texas, who were covered by an Obama executive order extending employment benefits to same-sex spouses. In the face of Obergfell v. Hodges, the injunction that was granted is clearly out of order. I presume a motion to lift the injunction will be filed shortly, and will be granted right away. Any other outcome is unfathomable.

Moving on, all the newly-married couples in Texas can now sign up for health insurance if they need to.

Same-sex couples who marry have had what the Affordable Care Act considers a “qualifying life event.” And that triggers a special 60-day enrollment period to purchase health insurance from Texas’ federally run, online marketplace, a group promoting enrollment said Tuesday.

Enroll America, a nonprofit supporting Obamacare, said in a release that under the health law, marriage is one of the unusual phenomena that allow consumers a mid-year bite at the apple. The others are having a baby, moving to a different coverage area, getting divorced and experiencing certain changes of income that would affect tax credits and cost-sharing subsidies.

“People don’t know that the special enrollment period exists,” Enroll America spokeswoman Annette Raveneau said in an interview.

[…]

Newly married same-sex couples and others with qualifying life events can sign up all by themselves, using HealthCare.gov.

Raveneau, though, strongly recommends that shoppers meet in person with a certified assistance counselor or Obamacare navigator. They can schedule appointments using Enroll America’s “Get Covered Connector.”

“The people who use an in-person assister, which are free, are twice as likely to finish the enrollment process and actually get a plan,” she said.

How many people might be able to do this? We can only guess, in part because the state has no plans to count how many same-sex couples get hitched.

Though Texas collects detailed data on marriages by county and age, getting better information on same-sex marriage rates in Texas could take years since the state has no plans to separately track those unions. Following Friday’s ruling, the Department of State Health Services released a new gender-neutral marriage application for counties to use. The application does not ask for the sex of either of the applicants.

“We are not specifically tracking those at this time,” said Carrie Williams, a spokeswoman for the department. “The application asks for Applicant One and Applicant Two and currently does not ask for gender.”

States in which same-sex marriage was legal before Friday have taken different record-keeping approaches. Oregon, Vermont and Washington track marriage licenses specifically issued to same-sex couples. California and Florida simply track all marriages, and do not differentiate between same-sex and opposite-sex unions.

The U.S. Census Bureau’s American Community Survey estimated in 2013 that there were 252,000 married same-sex couples in the country, but later said that was likely an overestimate, citing flawed data. A recent paper from a census researcher put the figure at closer to 170,000.

The patchwork of data collection means reliable numbers on how many same-sex couples are getting married in different states may not be available until the next census in 2020, said Drew DeSilver, a senior writer with the Pew Research Center who has researched the issue.

I guess I’m not too bothered by this, since there doesn’t seem to be a single standard practice nationwide. It would be nice to know, but given the way the updated form is worded, I understand the reasoning. I’m sure there will be a million ways to come up with reasonably accurate estimates – new Obamacare enrollments will be one data point – and we’ll have Census data soon enough.

Moving on to the benefits issue

And as we move on to other fights, the terrain changes.

RedEquality

Texas Gov. Greg Abbott opened the door for state agencies to withhold benefits from same-sex couples Friday, hours after the Supreme Court legalized same-sex marriage nationwide.

In a letter released Friday afternoon, Abbott ordered heads of state agencies to prioritize religious freedom, writing that no adverse action should be taken against a state official “on account of the person’s act or refusal to act that is substantially motivated by sincere religious belief.”

“This order applies to any agency decision, including but not limited to granting or denying benefits, managing agency employees, entering or enforcing agency contracts, licensing and permitting decisions, or enforcing state laws and regulations,” Abbott wrote.

In anticipation of this response, a lawsuit has already been filed for force the state to recognize the same-sex unions of its employees and grant them the same benefits. I have no idea what legal justification Abbott thinks he has for this, but we already knew he was a crappy lawyer.

The Trib makes it clear that this is little more than saber-rattling on Abbott’s part.

Public employers including Texas agencies, universities and schools may now be required to extend benefits to spouses of married gay employees in light of the U.S. Supreme Court’s ruling Friday that marriages between same-sex couples are constitutional.

But when those benefits will be extended is unclear as state officials examine the high court’s ruling and consider new policies.

“At this point, all I can say is we’re aware of the ruling and we’re examining it,” said Catherine Terrell, director of governmental affairs for the state Employee Retirement System, which oversees retirement and health benefits for state employees and those of most public universities and community colleges.

A spokeswoman for the Teachers Retirement System of Texas, which serves public education employees, echoed that sentiment, saying it was also “analyzing” the ruling’s impact on the programs it administers.

The ruling is likely to have little impact on state employees’ retirement benefits, because employees can already assign any person as a beneficiary, Terrell said. But “the major benefit issue” could be with employees’ health insurance plans.

[…]

Legal experts agreed that when it comes to extending benefits for same-sex couples, the state is now bound by the Supreme Court ruling to recognize all marriages.

Brandon Rottinghaus, a political science professor and Texas Constitution expert at the University of Houston, said the state has no legal basis to exclude same-sex couples from the benefits it offers married couples.

“If you’re legally married by the law, no agency or government can restrict you,” Rottinghaus said. “Exactly how this is applied in Texas is going to be a bit shaky.”

But he added that extending benefits to same-sex couples is inevitable. “It’s not a question of when, but how,” Rottinghaus said.

That’s true of county clerks, too, but that doesn’t mean it’s a straight line to get there. There’s already been a lawsuit filed to push the issue, in anticipation of this reaction from Abbott. It would be nice to think that we could avoid doing this the hard way, but of course we won’t. We will get where we need to be, We’re just gonna be mulish about it.