Welfare Benefit Plan Might not be Required to Cover Same Sex Spouses
Much has been written about the impact of the Supreme Court’s decision last term declaring unconstitutional the provision of the Defense of Marriage Act (DOMA) that required federal law not to recognize same sex marriages. Since then, more states have recognized same sex marriages either by court order or legislation. The IRS has also issued guidance requiring the recognition of same sex marriages where spousal benefits are imposed under federal law, such as spousal benefit requirements under qualified retirement plans.
In states where same sex marriage is recognized, it is likely that welfare benefits, such as life insurance (with respect to default beneficiaries) and health insurance (with respect to permissible enrollees), that are provided through insurance contracts will recognize same sex spouses. For example, if a health plan allows an employee to enroll a spouse, the insurance contract will probably be written to require that same sex spouses also be permitted to enroll. However, that may not be the case for a self-funded welfare benefit plan even in a state that recognizes same sex marriage.
A recent case from a New York federal district court reaches that conclusion. In that case, an employee sued Empire Blue Cross Blue Shield and her employer, wanting to add her same sex spouse to her employer’s self-funded medical plan. The court took into account both the Supreme Court decision declaring DOMA unconstitutional and the recent IRS guidance relating to retirement plans and concluded that neither mandated same sex spousal coverage under welfare benefit plans. According to the court, the discrimination rules with respect to race, sex, gender, etc. are not inherent in ERISA, but instead are applied through the federal non-discrimination laws, such as Title VII of the Civil Rights Act. The employee had brought her claim only under ERISA; therefore her case was dismissed.
Employers with self-funded plans can point to that case and to the fact that ERISA does not impose on employers a requirement that they cover spouses under their plans as support for excluding same sex spouses from plan coverage. Employers wishing to do so, however, should make certain that the definitions in their plans exclude same sex spouses and should keep in close touch with their plan advisors since the law in this area is changing rapidly.
Contact Benefits Notes for more information.