Magazine article Workforce Management
Decision Time on Same-Sex Benefits
Gay-marriage ruling in California puts pressure on firms to determine whether they will extend health coverage to same-sex spouses.
The recent California Supreme Court ruling allowing for same-sex marriages may not stick, but employers throughout the U.S. had better know now whether they will extend health care benefits to same-sex spouses.
On May 15, California's high court ruled that same-sex couples must be permitted to legally marry. However, on June 3, an initiative banning same-sex marriages received enough voter signatures to qualify for the November 4 ballot.
What happens after the fall vote is up for speculation, but since the Supreme Court ruling took effect June 17, employers need to decide how to handle health care benefits for same-sex spouses, experts say.
Most large private employers with employees in California have a choice as to whether they are going to allow same-sex spouses to qualify for health care benefits, says J.D. Piro, head of Hewitt Associates' health law consulting practice.
Most large private employers have health care plans that are governed by the Employee Retirement Income Security Act, which says that states can't regulate employer benefit plans. Therefore, employers that do not want to offer health care benefits to same-sex spouses could argue that they don't have to under ERISA, Piro says.
Similarly, consultants say large employers with self-funded plans may be able to argue that they don't have to recognize same-sex spouses when it comes to health care benefits under the 1996 Defense of Marriage Act, which defined marriage as a legal union between a man and a woman.
Whether employers would win these arguments would likely be decided in litigation, Piro says.
Employers need to review their plan documents and make sure they are comfortable with how they define a spouse, says Joanne Hustead, senior health compliance specialist at the Segal Co. "Most plan documents talk about a legal spouse as the person you are married to under applicable law, and there was never a need to define that," she says. …