Two days after news broke that Morgan Stanley was subsidizing the tax penalties gay employees pay for domestic partner benefits, American Express announced they were following suit.
If a gay employee receives domestic partner health benefits they are counted as taxable income if the partner is not a dependent -- gay employees can not use pre-tax dollars to pay for their health premiums while opposite-sex married couples can. And because of the Defense of Marriage Act, even if gay couples marry, their nuptials are not recognized by the federal government. Referred to as a "gross up," companies reimburse gay employees for the tax burden they incur as part of this government inequality.
Aside from Morgan Stanley and American Express -- both of which will starting offering gross ups in January -- Bank of America recently started the practice. Read more here.