Same-Sex Marriage Ruling and its Impact on Health Insurance
On Friday, June 26th, the Supreme Court of the United States issued a decision in Obergefell v. Hodges, holding that all 50 states must license marriages between two people of the same sex and must recognize a same-sex marriage lawfully licensed and performed out-of-state. The decision could have repercussions for both self-insured and fully insured employer-sponsored group health plans.
Under Obergefell, state insurance departments, taxing authorities and domestic relations courts are now required to recognize same-sex marriage. This could have the following effects on employer group health plans:
- Insurance carriers may be required by state insurance regulators to offer same-sex spouses the same coverage and benefits offered to opposite-sex spouses (if not already required).
- Self-insured medical plans that are not subject to state insurance laws may be required by non-discrimination laws to cover same-sex spouses if the plan covers opposite-sex spouses.
- States will align the preferential tax treatment of benefits offered to same-sex spouses with that offered to opposite-sex spouses, which will align with the federal preferential tax treatment.
- State-conferred benefits for spouses will extend to same-sex spouses (e.g., state continuation laws).
- Group health plans providing coverage to adopted children of employees will be required to provide benefits to the adopted children of same-sex married couples who now have the right to adopt. Previously, some states did not allow same-sex couples to adopt, resulting in just one of the two individuals being the legal guardian of the child.
- Group health plans providing coverage to step-children of employees will be required to provide benefits to the step-children of same-sex married couples. Previously, states that did not perform or did not recognize same-sex marriages would not have recognized a same-sex spouse as a step-parent.
- Employers offering coverage to domestic partners with the intention of extending coverage to same-sex spouses may now rescind the domestic partner benefits for those same-sex couples who are not married. If, however, the employer extends coverage to domestic partners of both the same and opposite-sex, that extension of coverage will continue.