How the gay marriage ruling impacts group benefits

The Supreme Court’s early summer ruling in Obergefell v. Hodges affects more than just same-sex couples seeking equal marriage rights — it also impacts employers and the benefits they offer. As open enrollment season approaches, advisers would be wise to help their employer clients take a close look at plan offerings.

Also see: Marriage ruling streamlines benefits administration  

Prior to the June 26 decision — which requires states to issue marriage certificates to same-sex couples as well as recognize same-sex marriages performed in other states — some self-funded employers didn’t offer coverage to same-sex spouses. Now, they must decide whether to extend coverage for all spouses or eliminate it for all spouses.

Employers could eliminate spousal coverage and still meet the minimum essential coverage requirement under the Affordable Care Act, said Joseph Lazzarotti, a shareholder in the Morristown, N.J., office of the national workplace law firm Jackson Lewis P.C. However, it might affect recruitment and retention, he said this week during a United Benefit Advisors’ webinar.

Fully insured plans don’t have this flexibility. Per Department of Health and Human Services guidance, health insurers that offer non-grandfathered coverage in the group or individual market must offer the same coverage to same-sex couples that is offered to opposite-sex couples, Lazzarotti said.

Also see: Will domestic partner benefits be a casualty of SCOTUS decision?

Another issue employers have to address is how to deal with domestic partners. Neither the SCOTUS decision in the Obergefell case or U.S. v. Windsor — which struck down part of the Defense of Marriage Act and left it up to the states to decide the definition of marriage — addressed domestic partnerships, Lazzarotti said. Likewise, guidance from both the IRS and DOL discussed spouses only, he added.

Employers have to determine if they’re going to offer coverage to domestic partners, and if that should include both same-sex and opposite-sex couples, Lazzarotti said. “It’s gotten less important now following Obergefell” because same-sex couples can marry, he said.

If an employer does offer coverage for domestic partners, they must make sure certain requirements are met, Lazzarotti said. State requirements can be used and so can a plan sponsor’s requirements — many employers had to come up with their own set of criteria because not all states had legal status for domestic partners, he said.

Also see: Post-Windsor: Does your plan need a year-end amendment?

Documenting eligibility for spouses is another issue for employers. To avoid any discrimination claims, it’s best to require proof of marriage for both same-sex and opposite-sex spouses, Lazzarotti said.

Administration of the Family and Medical Leave Act became easier after the Obergefell ruling, Lazzarotti said. As long as an employee is eligible, they can take FMLA leave regardless of where they live, he said. “This really opens up and makes more uniform the issue of FMLA leave,” Lazzarotti said.

Eligible employees can take FMLA leave to:

• Care for their lawful same-sex spouse with a serious health condition;
• Care for their stepchild (a child of the employee’s same-sex spouse);
• Care for a stepparent who is a same-sex spouse of the employee’s parent;
• Take qualifying exigency leave due to their lawful married same-sex spouse’s covered military service;
• Take military caregiver leave for lawful same-sex spouse.

Also see: Re-examine definition of ‘spouse’ in all plan documents

Having consistency in the way both benefits and leave are managed is essential, Lazzarotti said. Any changes to benefits and/or leave policies must be reflected in the plan document, he said. It’s crucial that employees know about the modifications and that third-party administrators are aligned with the updated coverage as well, Lazzarotti said.