In light of the U.S. Supreme Court’s ruling in Obergefell v. Hodges, employers must treat plan participants who are legally married to same-sex spouses in the same manner as they treat plan participants who are legally married to opposite-sex spouses. It follows that employers should review their benefit plans in order to ensure compliance and determine whether changes to plan documents are warranted.
However, Obergefell was silent on how employers must treat unmarried employees in civil unions or with registered domestic partners. Before the Supreme Court put same-sex marriage on equal footing with opposite-sex marriage, it wasn’t all that common for employers to make distinctions based on whether same-sex couples were married or part of a civil union or domestic partnership. Because marriage wasn’t even an option for many couples, the availability of same-sex coverage didn’t typically hinge on marital status.
In the wake of Obergefell, employers seeking to contain costs and reduce administrative burdens are considering whether or not they should continue to allow unmarried employees to enroll civil union and domestic partners in health-care coverage. Ultimately, an employer’s course of action will be influenced by whether the employer’s plan is an insured or a self-funded health-care plan.
Employers with insured health plans purchase insurance from commercial insurers. In contrast, employers with self-funded plans act as their own insurers by deciding which benefits to offer employees and paying all claims directly.
All states and the District of Columbia require insurance issuers to include certain provisions, also known as mandated benefits, in all insurance plans and policies offered for sale. Employers with self-funded plans can, but are not required to, include coverage for state mandated benefits.
Several states require insured plans to offer employees’ civil union and domestic partners the same benefits offered to employees’ opposite-sex spouses. As a result, employers must be familiar with individual state health benefit mandates when determining whether or not to offer benefits to employees’ civil union and domestic partners.
For example, California mandates that employers treat both employees’ same sex spouses and registered domestic partners in the same manner as they treat employees’ opposite sex spouses. In addition, California requires that all insured plans and policies issued in California that provide coverage to participants that live in California must provide identical coverage to employees’ same-sex spouses or domestic partners as provided to employees' opposite-sex spouses or domestic partners, regardless of where employers' principal place of business is located.
Similarly, Washington requires that employers treat employees’ same-sex spouses and registered domestic partners in the same manner as they treat employees’ opposite-sex spouses for purposes of plan enrollment.
Additionally, Illinois requires that employers treat employees’ same-sex spouses and civil union partners in the same manner as employees’ opposite-sex spouses.
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