Until recently, same-sex couples could not legally marry. Now, some are finding they must wed if they want to keep their partner’s job-based health insurance and other benefits.
With same-sex marriage now legal in 35 states and the District of Columbia, some employers that formerly covered domestic partners say they will require marriage licenses for workers who want those perks.
“We’re bringing our benefits in line, making them consistent with what we do for everyone else,” said Ray McConville, a spokesman for Verizon, which notified non-union employees in July that domestic partners in states where same-sex marriage is legal must wed if they want to qualify for such benefits.
No further need for same-sex alternatives?
Employers making the changes say that since couples now have the legal right to marry, they no longer need to provide an alternative. Such rule changes could also apply to opposite-sex partners covered under domestic partner arrangements.
“The biggest question is: Will companies get rid of benefit programs for unmarried partners?” said Todd Solomon, a partner at McDermott Will & Emery in Chicago.
It is legal for employers to set eligibility requirements for the benefits they offer workers and their families — although some states, such as California, bar employers from excluding same-sex partners from benefits. But some benefit consultants and advocacy groups say there are legal, financial and other reasons why couples may not want to marry.
Requiring marriage licenses is “a little bossy” and feels like “it’s not a voluntary choice at that point,” said Jennifer Pizer, senior counsel at Lambda Legal, an organization advocating for gay, lesbian and transgender people.
About two-thirds of Fortune 500 companies offer domestic partner benefits, but only a minority is changing the rules to require tying the knot, said Deena Fidas, director of the workplace equality program at the advocacy group Human Rights Campaign.
How companies are handling the changes
Because same-sex marriage isn’t legal in all states, “many employers operating in multiple states … are retaining their partner benefit structures,” said Fidas.
Most companies making the changes, including Verizon, are doing so only in those states where same-sex couples can get married. And most give workers some time to do it.
“We gave them a year and a quarter to get married,” said Jim Redmond, spokesman for Excellus BlueCross BlueShield, which made the change for employees shortly after New York allowed same-sex unions.
Employers that offer domestic partner benefits — for both same-sex and opposite-sex partners — generally allow couples in committed relationships to qualify for health and other benefits upon providing documents, such as financial statements, wills, rental agreements or mortgages, proving they are responsible for each other financially.
Such benefits were particularly important before the federal health law barred insurers from rejecting people with pre-existing medical conditions.
“We had clients over the years who were living with HIV … the only health insurance they had, or had hope of getting was their partner’s, through a job,” said Daniel Bruner, director of legal services at the Whitman-Walker Health clinic in Washington DC. “Now folks have more health insurance options.”
Tax rules change when state marriage laws change
After the Supreme Court ruled the federal Defense of Marriage Act unconstitutional in 2013, the portion of the health insurance premium paid by employers on behalf of the same-sex spouse was no longer taxable under federal rules, although state taxes often applied where such marriages were not legal. When state marriage laws change, so do those tax rules.
In Arizona, Dena Sidmore and her wife, Cherilyn Walley are saving more than $300 a month in taxes on the health insurance from Walley’s state job, which covers them both. The savings came after the state’s same-sex marriage bar was thrown out by the courts in October.
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They didn’t marry for benefits. They already had coverage under domestic partner requirements affecting Arizona state workers. They simply wanted to be married. Indeed, they tied the knot in September 2013, after driving all night to Santa Fe, N.M., where same-sex marriage was legal.
“It was lovely,” Sidmore said of the ceremony at the courthouse. But for her, the real change came when Arizona’s bar on same-sex marriage was overturned by the courts. She remembers thinking: “This is real. It’s not just a piece of paper.”
After the courts lifted the same-sex marriage ban, Arizona dropped its domestic partner program. State workers had until the end of last year to marry if they wanted to keep a partner on benefits.
Sidmore has no objection to employers requiring a marriage license for benefits because “spousal benefits require marriage,” although she thinks there should be exceptions for older residents who might face the loss of pensions or other financial complications if they remarry.
Considering what marriage might mean for benefits coverage
Benefit experts recommend that employers consider what it might mean for workers if benefits are linked to marital status — especially those that operate in states where same-sex marriage is not legal.
While some couples, like Sidmore and Walley, may be willing to travel to tie the knot, others may not want to, or may be unable to afford it. Additionally, some workers may fear if they marry, then move or get transferred to a state where same-sex marriage is barred, they would face discrimination.
Joe Incorvati, a managing director at KPMG in New Jersey, married his partner, Chuck, in 2013 when it became an option. “We’d been together for 38 years, so it just seemed natural,” he said.
KPMG offers domestic partner benefits and does not require employees to be married for eligibility. While he’s comfortable in New Jersey, Incorvati said it could be a problem if his company wanted to transfer him to a state where same sex marriage is not legal.
Even though his work benefits would remain the same, “Would I have the same rights as in New Jersey?” Incorvati asked. “The answer may be no.”
This article is from kaiserhealthnews.org and published with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.