Many companies provide health benefits to the spouses of their employees. So, most people assume that if a same-sex couple marries and lives in a place that recognizes the marriage that their spouse will be entitled to the same health benefits that a different-sex spouse is entitled to. Unfortunately, this is not always the case.
The reason is fairly complex, but basically it has to do with whether the company’s health plan is insured (the company pays a premium for each health plan to an insurance company) or the plan is self-insured or self-funded (which means that the company directly pays the health expenses that are incurred under the plan). The only way to tell whether your company’s plan is insured or self-insured is to obtain a copy of the plan or speak to your HR person, because even companies with self-insured plans often hire an insurance company to manage their paperwork.
With insured plans, usually the state’s insurance laws apply to the plan, and so in places that recognize the marriage, the company and health plan are required to treat same-sex spouses the same way they treat different-sex spouses.
Self-insured plans, however, are regulated by a federal agency, ERISA, which sets minimum standards that employers must meet. Because of DOMA, ERISA does not require employers to treat same-sex spouses the same way it does different-sex spouses, and so with self-insured plans employers can legally discriminate against same-sex spouses and not allow them to get on the health plan.
It is important to understand though that ERISA does not PREVENT employers from offering the same benefits to same-sex spouses. If the benefit is denied, it is because the employer is deliberately choosing to discriminate against its same-sex married couples. Also, sometimes even with self-insured plans, the definition of spouse may legally require that same-sex spouses be covered. So if you are denied spousal coverage, call GLAD’s Legal InfoLine. We can arm you with information that may persuade your company to provide coverage.
Even if a same-sex spouse is allowed on the other spouse’s health plan, DOMA steps in with another example of discrimination. Employer benefits to different-sex spouse are tax free, but since the federal government does not recognize the marriages of same-sex couples, any benefit the employer offers to a same-sex spouse gets considered as extra income to the employee (called imputed income) and gets taxed by the federal government. However, in places that recognize the marriage there is no state tax.
If DOMA goes away, both these forms of discrimination would disappear. There is more detailed information about this at www.glad.org. If you have any questions about this blog or any other legal question, contact GLAD’s Legal InfoLine at 800-455-GLAD (4523).