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Confusion over benefits for same-sex couples February 16 , 2007 Excerpted from Arkansas Employment Law Letter, written by attorneys at the law firm Jack, Lyon & Jones, P.A. Q: I'm an HR manager in a midsize company. Recently, one of my employees went on vacation to another state, and while there, she got "married" to her lesbian partner. Now she's claiming that because they're legally married, we have to provide the same insurance and other benefits for her partner that we do for the spouses of heterosexual couples. We have never discriminated against gay couples, but I'm worried about the message that providing those benefits might send to our other employees. Is she right that she's entitled to the same benefits as other married employees? A: This question raises a number of issues. Courts in a few states have ruled that same-sex marriages are legal. Other states have recognized civil unions between same-sex "domestic partners." And a number of states have enacted amendments to their state constitutions banning gay marriage or defining marriage as only between a man and a woman. Those developments have created challenges for employers with employee benefit plans. Employers should consider the effect those developments will have on the design and administration of their plans. Same-sex marriage developments and considerations In 2004, Massachusetts became the first state to recognize gay marriage, and under Massachusetts law, same-sex couples are required to be treated the same as heterosexual couples. Massachusetts soon was followed by city and county officials in a number of other states that issued marriage licenses to same-sex couples. At this point, the legal status of those marriages isn't clear and is subject to review by the state courts where couples were issued licenses. Employers should be prepared to address those issues, however, when reviewing and potentially revising their benefits plans. Employers that provide employee benefits to employees who are legally married to a member of the same sex under Massachusetts law will need to review their employee benefit plans to determine how a "spouse" is defined under the plan. A typical group health plan provides coverage to a covered employee's spouse, who is defined as someone legally married to the covered employee under applicable state law. Because same-sex couples would be married legally under Massachusetts law, a same-sex spouse of a covered employee would be entitled to benefits under a plan that includes that definition of a spouse. It's unclear how this issue will affect employers with non-Massachusetts employees who were married to a same-sex partner under Massachusetts law. Generally, states recognize legally valid marriages in other states. Under the U.S. Federal Defense of Marriage Act, however, states aren't required to recognize a same-sex marriage in another state, and 38 states have adopted laws that prohibit them from recognizing any marriage other than one between a man and woman. Still, depending on the definition of "spouse" in an employer's plan, a same-sex spouse may be eligible for benefits under the employee benefit plan regardless of the employer's location. Strategies for clarifying the uncertainty surrounding same-sex marriages These developments undoubtedly will spawn many lawsuits. Employers nationwide already are facing requests similar to the one posed in this question. Employers can clarify how recent developments will affect their plans by conducting a thorough review of (and making necessary changes to) the definitions of "spouse" contained in all their benefit plan documents. One approach for employers to consider would be to amend the definition of spouse in their plans to require that a "spouse" be married as defined under federal law. That approach could apply both to employers that do or don't want to provide benefits to same-sex spouses or to employers that want to provide domestic-partner benefits (but not "spousal" benefits). Employers may need to amend certain enrollment forms to continue to administer their plans consistently. For example, employers may need to revise plan enrollment forms to request information about the sex of an employee's spouse to determine whether the individuals are "spouses" within the meaning of federal law. Employers that want to cover same-sex spouses as a "spouse" under their plans also may need to revise the definition of spouse in their plans. One approach would be for an employer to amend benefit plans to specifically incorporate same-sex spouses into the definition. Employers still should bear in mind that under federal law, neither same-sex spouses nor domestic partners are recognized as spouses for whom favorable tax benefits apply. That means that tax-favored benefits (like pretax cafeteria plan or flexible spending account benefits) can't be provided to employees who add same-sex partners to group health plan coverage. Employers that wish to provide for same-sex partner benefits need to consider the tax implications for employees. Also, certain benefits for spouses mandated by federal law, such as COBRA continuation health coverage and Family and Medical Leave Act leave, aren't available to same-sex spouses or domestic partners. Employers that voluntarily choose to offer such benefits will need to amend their plans to provide for such coverage and consider how the legal rules will apply in the context of same-sex relationships in which there's no recognized marriage or divorce. Domestic partner benefits Domestic partner benefit laws require same-sex partners be afforded all the same state rights as heterosexual couples. Employers that already provide domestic partner benefits to same-sex partners also need to review their benefit plans. Among employers that offer domestic partner benefits to same-sex partners only, "domestic partner" is commonly defined in part as someone who can't marry the employee legally. Until recently, that definition effectively limited eligibility for benefits to same-sex domestic partners. The developments allowing same-sex couples to marry, however, raise the possibility that domestic partners actually could lose coverage under an employer's plan if they can (under the new law) legally marry. Therefore, depending on the definition of domestic partner in an employer's plan, some same-sex domestic partners may no longer be eligible for benefits under the plan unless the definition of domestic partner is amended. What employers should consider in making benefits decisions Employers should begin to review the new developments and consider reevaluating their current policy on same-sex partner benefits. As part of that reevaluation, employers should consider the following factors:
Bottom line Each employer should evaluate its situation to determine whether it wants to offer such benefits. The plus side for employers is that doing so might help retain or recruit good employees and the cost of doing so seems relatively low. The down side is that many employers, their employees, and customers might find offering such benefits objectionable. Copyright 2007 M. Lee Smith Publishers LLC. ARKANSAS EMPLOYMENT LAW LETTER should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. Anyone needing specific legal advice should consult an attorney. The State Bar of Arkansas does not certify specialists in labor law, and we do not claim certification in any listed area. For further information about the content of any article in this newsletter, please contact any of the editors. Additional resources on HRhero.com Subscribers Area Resources (available to Employment Law Letter subscribers)
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