On June 26, 2015, the U.S. Supreme Court of the United States ruled that the 14th Amendment to the United States Constitution compels all states to issue marriage licenses to two people of the same gender and recognize legal marriages between two people of the same gender.
The Obergefell v. Hodges decision was sweeping, all but ending a decades-long battle to bring marriage equality to gay couples. Thirty seven states and the District of Columbia already recognized same-gender marriages before the ruling. Michigan was among 13 states that banned gay marriage through a state constitutional amendment defining marriage to be between one man and one woman.
With this historic decision, all U.S. states and territories can no longer ban same-gender marriage either by state constitutional amendment or popular ballot vote.
Although the decision comes from the highest court of the United States, there are many unanswered questions. The decision did not address matters of discrimination based on religious beliefs, nor did it lay out a step-by-step plan for employers and health insurers to handle the new legislation. This blog specifically focuses on the impact the SCOTUS decision has on employer-sponsored benefits.
Fully insured health plans are now legally bound to recognize same-gender marriages exactly as they would marriages of opposite genders. Although 2013’s United States v. Windsor SCOTUS ruling extended favorable tax treatment on premium dollars paid by employees towards same-gender spouses and dependents coverage, that ruling did not extend those benefits nationwide. The favorable tax treatment of premium dollars now applies to same-gender married couples in every U.S. state and territory.
Small-group employers have always had the option of excluding spousal coverage under their benefit plans. Now, however, the exclusion must be uniform and not directed at same-gender marriages. If an employer disqualifies spousal coverage or requires spouses to take insurance through their own employer prior to enrolling in the company’s plan, the condition must be applied to both same-gender and opposite-gender spouses.
Employers with self-funded medical plans are not forced by the Obergefell ruling to allow same-gender spouses to enroll in their group health plan. It is advised that employers with self-funded plans consider the potential for litigation if they choose, at this point, not to allow same-gender spouses to enroll in their group health plans.
There are still several roadblocks and gray areas due to this ruling: How do groups handle their plan if they already allowed “domestic partners” to enroll? Is there a time limit that vendors will allow domestic partners to become legally married before they disallow coverage? If employers choose to continue allowing domestic partner coverage for same-gender couples, they should be sure to open it to opposite-gender domestic partners, if they did not before.
As always, BCN Services will guide clients and employees through these complexities as they occur. Please encourage your employees to call us with any questions they may have. Timeliness can play a factor, depending on the specific situation
Frank Lewandowski, Partnership Manager