Will Marriage Help Us Get Spousal Health Insurance?
Considerations for Same-Sex Couples
The number of states providing protections for couples in committed same-sex relationships keeps increasing, and that has led to increased security for thousands of couples. That security has often included better support in the everyday financial struggles faced by all families, including the need for health insurance. But for some same-sex couples, even getting married and living in a non-discriminatory state might not be enough to gain spousal health coverage from employers who already offer it to different-sex married couples. There are employers who must treat you equally and those who should do so. Whether they must depends on many factors, and you may have to consult an attorney for an evaluation. This document is intended to give you some general background that may be helpful for understanding the law that covers spousal health benefits. For more general information, see “Protecting Same-Sex Relationships.”
To begin to evaluate whether marriage will help you obtain spousal health coverage from an employer, consider the following:
- Is the employer public (meaning governmental) or private? Private employers are regulated differently.
- If the employer is private, is the employer “insured” or “self-insured?” Generally speaking, an “insured” employer purchases health insurance for employees from an insurance company subject to regulation by the state. By contrast, a “self-insured” company creates its own health insurance program, which is likely subject to regulation under a federal law called the Employment Retirement Income Security Act (ERISA). ERISA trumps state law and employers have argued it leaves the door open to discrimination that is otherwise barred by state law. Figuring out whether an employer is self-insured is not always easy. For example, an employee’s health insurance card may be issued by an insurance company that sells insurance in a particular state and is regulated by the laws of that state, but the employer may have hired the company to be the administrator of its self-insured, federally regulated program. On the other hand, a self-insured employer may elect to offer different options for health plans, including one subject to state law rather than federal law, so employees can switch to the most favorable plan.
- Even if an employer is self-insured and provides no favorable health plan options, the “summary plan description” for the health plan may include terms that clearly create coverage for your partner. Or, if the workplace is unionized, the “collective bargaining agreement” (CBA) may do the same. In either case, this is where ERISA may help rather than hurt, because the employer may have a contractual obligation that is enforceable under ERISA to provide coverage, as was true in the case of Lambda Legal’s representation of UPS employees. But keep in mind that an employer looking to be harmful might change the terms of the plan.
For help identifying an attorney who may help with the evaluation, contact Lambda Legal’s Help Desk at 866-542-8336.
It's important to remember that all private employers should provide spousal or domestic partner health coverage, no matter what state they are in. Just because federal law may allow a self-insured private employer to discriminate, that does not mean the employer is required to discriminate. Instead it means that the employer can choose whether or not to discriminate, and it should choose to do the right thing, even if that means changing the terms in its health plan. Over half of Fortune 500 companies provide health benefits to employees’ same-sex domestic partners. To advocate with your current employer for these benefits, see the benefits section in Lambda Legal’s Out At Work: Toolkit for Workplace Equality.
Despite so many employers choosing to do the right thing, the federal government still undermines that good choice, mostly through the power of taxation. Unless an employee’s spouse or domestic partner meets the standards of dependency as defined by the IRS, health coverage provided by the employer for a same-sex spouse or domestic partner is considered taxable income to the employee. That can push employees into a higher tax bracket, and needs to be factored into the family budgets. On the bright side, some employers have begun to explore whether to “gross up” or “round up” an employee’s wages or salary to compensate for the federal government’s added harms to the couples. That means the employer would increase an employee’s wages or salary to roughly offset the extra tax burden from the federal government.
For the most part, despite the federal government’s added tax burdens undermining employers’ efforts to support their employees, same-sex couples often still do come out ahead with spousal or domestic partner health coverage. That underscores the importance of advocating for employers to do the right thing, especially because it’s a mistake to assume that suing for a marriage to be respected is the solution. The great news is that the number of states providing protections to lesbian and gay couples is increasing, so the options continue to increase, too. In the meantime, make sure you have done the best you can to protect yourself and your family appropriate legal documents like a health care proxy.
PLEASE NOTE: This document offers general information only and is not intended to provide guidance or legal advice regarding anyone's specific situation. This is an evolving area of law in which there is bound to be uncertainty. If you have additional questions or are looking for contact information for private attorneys to advise you, contact Lambda Legal's Help Desk toll-free at 866-542-8336 or firstname.lastname@example.org.