Health Benefits for Same-Sex Spouses Post-Windsor. Presented by: Finn Pressly Littler Mendelson, P.C. Chicago

Transcription

1 Health Benefits for Same-Sex Spouses Post-Windsor Presented by: Finn Pressly Littler Mendelson, P.C. Chicago

2 Road Map Summary of Windsor v. U.S. Same-Sex Relationship Recognition Nationwide Unanswered Questions Effect on Health Plans

3 DOMA and Windsor v. United States

4 Anatomy of DOMA Defense of Marriage Act (1996) Section 1: Title Section 2: Full faith and credit provision Provides that one state does not have to recognize a same-sex marriage from another state. Section 3: Provides a federal definition of spouse and marriage

5 Windsor strikes down Section 3 Defense of Marriage Act (1996) Section 1: Title Section 2: Full faith and credit provision Provides that one state does not have to recognize a same-sex marriage from another state Section 3: Provides a federal definition of spouse and marriage

6 Effect of Windsor No longer a definition of spouse for purposes of federal law. Broad effects not just benefits! Key areas to watch for benefits: Internal Revenue Code HIPAA COBRA

7 Recognition of Same-Sex Relationships

8 State-by-State Analysis Each state has different rules Three traditional categories: Full marriage equality Limited benefits No recognition of same-sex couples Limited benefits becoming rare. The civil union conundrum.

9 Current State Laws Yellow = marriage Blue = civil unions Wisconsin = limited rights Source:

10 State Laws: Examples Florida Inasmuch as marriage is the legal union of only one man and one woman as husband and wife, no other legal union that is treated as marriage or the substantial equivalent thereof shall be valid or recognized. (Fla. Const., Art. 1, Sec. 27) Vermont Marriage is the legally recognized union of two people. When used in this chapter or in any other statute, the word marriage shall mean a civil marriage. Terms relating to the marital relationship or familial relationships shall be construed consistently with this section for all purposes throughout the law, whether in the context of statute, administrative or court rule, policy, common law, or any other source of civil law. Hawaii Partners to a civil union shall have all the same rights, benefits, protections, and responsibilities under law, whether derived from statutes, administrative rules, court decisions, the common law, or any other source of civil law, as are granted to those who contract, obtain a license, and are solemnized pursuant to chapter 572.

11 Meanwhile in Wisconsin Registered domestic partnerships receive some rights. Last of the limited states. Intestate succession, presumption of joint tenancy, hospital visitation. Not a spouse for state tax purposes; no sharing of marital income.

12 Open Questions

13 Unresolved Questions Currently awaiting guidance from the IRS and DOL regarding implementation of Windsor decision. Hold off on making major plan changes until guidance is released. Two key unresolved issues: Retroactivity Domicile Rule vs. State of Celebration Rule

14 Retroactivity Technically speaking, Section 3 of DOMA has never been constitutional! Can same-sex spouses file amended returns to correct uneven tax treatment in past year? What about plans that offered a gross-up to same-sex couples?

15 Domicile vs. Celebration Will the federal government recognize a marriage if the local state laws do not? Compare: Couple 1 has a New York marriage certificate and lives in Minnesota. Couple 2 has a New York marriage certificate and lives in Florida. Couple 3 has a Hawaii civil union certificate and lives in New York.

16 Effect on Health Plans

17 Why are plans affected? State insurance laws will affect insured products (e.g., medical, dental, LTD). The Internal Revenue Code governs taxation of benefits provided to spouses including cafeteria plan elections. Other federal laws (COBRA, HIPAA) offer important rights to spouses.

18 What s changing? Benefits provided to same-sex spouses are eligible for favorable federal tax treatment. Cafeteria plan (Section 125) rules now recognize same-sex spouses including FSAs. HIPAA special enrollment rights now apply to a same-sex spouse. COBRA coverage must offered to a same-sex spouse. HSA limits for married couples apply to same-sex spouses.

19 Can Plans Exclude Same-Sex Spouses? Neither ERISA nor PPACA requires plans to offer spousal coverage. Technically speaking, still permissible to exclude same-sex spouses.but risky going forward! Possible discrimination actions based on gender? Employee relations concerns.

20 Plan of Attack Watch for federal guidance! Check your plan documents! (e.g., a legal spouse in Iowa includes a same-sex spouse.) Consider your design. Will you replace existing domestic partner coverage with same-sex spouse coverage? Coordinate with payroll. Talk to your vendors! Communicate changes clearly.

21 Questions?

22 Finn Pressly Littler Mendelson, P.C. August 2013