Same-sex marriage to change benefits options
When annual enrollment time rolls around later this year, employees will likely see a significant change in their benefit options, thanks to the Supreme Court ruling on gay marriage.
Many companies are expected to eliminate their domestic partner benefits, a perk initially designed to make it easier for employees to obtain health insurance and other benefits for their same-sex partners.
The benefit, which got its start in the 1990s, is especially common especially among larger employers. According to Aon Hewitt’s database of more than 1,000 employers, 77 percent offer same-sex domestic partner benefits.
Now that everyone can
legally marry, however, many companies don’t see a need to continue to offer the benefits that their gay and lesbian employees requested in the years same-sex marriage was prohibited, said Jesse Gelsomini, an employment lawyer with Haynes and Boone in Houston.
For many employers, that’s good news because it’s easier to run one benefit program for everyone rather than two separate programs, said Gelsomini, who said clients are already asking for advice on whether they can drop their domestic partner benefit option. And it will mean the end of collecting affidavits from employees to prove they’re in a “committed and caring relationship” in order to sign their spouses up for health insurance. More marriages likely
It’s also good news for employees who had to pay taxes on the value of the benefits to their unmarried domestic partners. With samesex marriages legal everywhere, the benefits will no longer be taxed as long as the couples are married.
In many companies, domestic partner benefits are also used by unmarried opposite sex couples. Companies typically extended the same domestic partner benefits to prevent claims of sex discrimination.
If Gelsomini’s hunch is correct, the elimination of domestic partner benefits will probably send more folks down the aisle.
“In all the euphoria of same-sex marriage, there is probably a little bit of nervousness out there,” he said. “They may not want to be married, but to keep the benefits they’ll have to get married.” Opposite-sex couples
And that’s not just same-sex partners who will be going to see the judge or the preacher. It will be opposite-sex couples who will no longer have the option to get domestic partner benefits.
That may give some companies pause, especially if they start hearing from employees who prefer the status quo.
No doubt some companies will drop their domestic partner benefits, J.D. Piro, senior vice president and leader of the Aon Hewitt health law group, said from his office in Norwalk, Conn.
But some will retain their domestic partner programs, he said, especially if the local workforce continues to value the benefit.
Other companies will retain domestic partner benefits because they don’t want their employees to think it’s a takeaway, said Mike Williams, health and benefits practice leader for Mercer’s Houston office.
A more pressing issue is how much is it going to cost to add all those new spouses along with their dependents, said Williams, who is fielding the calls from clients.
Every new member adds cost, he said, but a more detailed answer depends on the population. Men over the age of 50 tend to be more expensive because they don’t take care of their health as well as women, he said. The number of catastrophic claims will likely rise. Leave policies
Employees can also expect changes in other benefits.
Despite previous legal challenges, the Supreme Court ruling paves the way for same-sex spouses to take advantage of the federal Family and Medical Leave Act, which allows an employee to take up to 12 weeks of unpaid leave to care for his or her own illness, or the illness of a spouse, child or parent. It also covers care of newborns or adopted children.
Ditto for other types of leave such as paid time off to attend the funeral of family members, such as spouses, children, parents and grandparents. If you’re married and the policy covers spouses, same-sex spouses are covered the same way as opposite-sex spouses. Level playing field
The Supreme Court ruling “basically levels the playing field,” Gelsomini said. Employers will no longer have to ask where the employee got married or where they’re living now to determine if the marriage is legally recognized.
“A marriage is a marriage is a marriage,” he said.