Same-Sex Ruling Impact on Employers and Benefit Managers


The U.S. Supreme Court’s decision overturning same-sex marriage bans in the four remaining states that had them will shake things up for employers not offering coverage currently and ease the administrative burden on benefits managers at companies that already offer insurance coverage to spouses and partners. Approximately 77 percent of employers with employee health plans already offer same-sex partner coverage.
The ruling, overturned bans in Michigan, Kentucky, Ohio and Tennessee and changed laws for many states that did not have official bans. This could spur employers to consider dropping or increasing the cost-sharing of spousal coverage since the major concern is the liability of having to cover a substantially higher number of spouse/partners.
Following these changes, plan sponsors will need to carefully and strategically plan and design their employee benefit plans in order to balance cost, compliance and quality to maintain a comprehensive total compensation package that will still attract and retain talent. It is no surprise that compliance will continue to be a major concern and this is just one more thing to consider. As employers consider their strategy, they will need to consider state and local laws requiring domestic partner coverage.
Also Read: FMLA updated to include same-sex couples

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In the wake of the Supreme Court decision, employers to be mindful of the following:
  • Employers who offer health coverage for spouses will now be required to provide coverage to same-sex spouses if they aren’t already.
    • If an employer already offered the coverage during the past open enrollment, then the spouse will need to wait until the next open enrollment.
    • If coverage was not offered before, the spouse will have until July 31 to sign up for the employer’s plan or wait until the next open enrollment.
    • Newly married couples may add their spouse following the marriage as permitted under special enrollment guidelines.
  • Employers may need to make administrative changes to cover same-sex spouses in states where they were not previously covered. For example, employers will need to modify enrollment processes and create or modify consent and eligibility forms.
  • The state income tax treatment of employer-provided benefits could change for individuals with same-sex spouses.
  • Eligibility rules for employer-provided benefits could change, which would open up eligibility to same-sex spouses in all states. In contrast, employees should check with their employer about any possible changes to their benefits or necessary administrative steps they may need to take to ensure coverage.
  • With anticipated changes to the state income tax treatment, workers with same-sex spouses covered by employer plans will no longer need to pay imputed income on those benefits.