Joining other major Hollywood studios, Walt Disney Co. will extend health coverage to the partners of gay and lesbian employees beginning Jan. 1.
"We made this decision because it brings our health benefits in line with our corporate non-discrimination policy," Disney spokesman John Dreyer said Friday. "We constantly review our benefits."
While Disney called the change routine, observers said the company had considered the issue for three years, studying the costs as well as the potential impact on its family-oriented image.
The issue had been the subject of intense lobbying efforts within the company that had once been viewed as so anti-gay that it prevented two men from dancing together at Disneyland.
Among Hollywood studios, Disney was one of the last holdouts to offer "domestic partner benefits." Analysts said Disney joined the bandwagon because it did not want to risk losing talented workers in a highly competitive industry. As with the high-tech and medical industries, the entertainment field is believed to have a larger proportion of gay workers.
Under Disney's new policy, an employee wanting to claim the benefit must sign an affidavit affirming that he or she is living with the person who will receive the benefits. Domestic partners also must show they are financially dependent upon each other, and their children will also be eligible for coverage.
Disney employs about 60,000 people companywide, including 9,000 who work at Disneyland in Anaheim. Not all employees are eligible for the benefit, however.
Disney's decision, revealed in an employee newsletter this week, was hailed by gay activists but drew fire from some anti-gay groups.
At Disneyland, Steve Valkenburg, co-chairman of the park's Lesbian and Gay United Employees, said: "I think it's wonderful that the company recognizes all the individuals within the company."
Health insurance executives said Disney's move would likely spur corporate America--which is only beginning to embrace the policy--to consider health benefits for gay partners.
"I think other people will say, 'If it's good enough for Disney, maybe it's something we should consider,' " said Gary Schmidt, marketing director of PacifiCare Health Systems, a health maintenance organization based in Cypress.
Despite concerns over rising costs and some fears about paying for AIDS cases, an increasing number of public and private employers have adopted domestic-partner benefits policies in recent years, including Microsoft, Levi Strauss and Apple Computer.
In Orange County, PacifiCare and the city of Laguna Beach are among employers that have extended or agreed to provide health coverage to employees' domestic partners. PacifiCare adopted the policy last October, and 2% of its 3,070 eligible employees have signed up for the benefit.
However, experts said, private employers have been slow to adopt such policies.
"It isn't seen as a big deal," said Mark Straus, an analyst at Watson Wyatt Worldwide in Los Angeles, a benefits consultant. "There are some employers who just don't feel it's appropriate."
Most employers who provide domestic partner benefits extend coverage to same-sex couples as well as unmarried heterosexual partners of employees.
Disney's policy, like those at other major Hollywood studios, limits coverage to gay employees. Disney officials declined to comment on why heterosexual partners are excluded.
Richard Jennings, executive director of Hollywood Supports, a nonprofit group promoting awareness of AIDS and gay issues, said Disney Chairman Michael Eisner had made a commitment to his group late last year that the company would adopt the policy.
"It's been a long effort," Jennings said of his group's attempts to turn Disney around. Initially, Jennings said, Disney expressed concerns about taxes. But "their greatest concern," he said, "is their reputation as a maker of family entertainment."
Disney officials declined to speculate about how many employees might sign up for the new benefits. Some analysts said that at many other companies only 1% to 2% of the employees have filed for the benefits. Jennings said the percentage is much smaller at companies offering benefits only for same-sex partners, partly because some workers don't want to disclose their sexual orientation.
Experts agreed that domestic-partner benefits generally have not significantly added to employer costs.
In the last three years, media giants such as MCA/Universal, Paramount Pictures, Sony and Warner Bros. have extended health benefits to their gay or lesbian workers. Until now, Disney was on a short list with Fox and MGM of not offering same-sex benefits.
Fox officials were unavailable for comment Friday. MGM spokeswoman Anne Corley said the studio hasn't ruled out domestic partner benefits. "Benefit plans are always under review," she said.
Disney's new policy elicited strong feelings on both sides.