News Archive

Domestic Partner Benefits Remain Popular But Present Challenges (PDF)

20 pages. "Despite the acceptance and prevalence of domestic partner benefits, they pose complex legal, tax, administration and other compliance issues.... This GRIST summarizes the major issues, provides a tax-dependent flowchart and a domestic partner checklist for employers and includes two charts summarizing applicable state laws."  MORE >>

What Documentation Should We Require to Demonstrate Eligibility for Domestic Partner Benefits? (PDF)

"As the sponsor of a self-insured plan, your company is generally free to define the term 'domestic partner' as it chooses and to determine what documentation will be required as evidence of the domestic partner relationship.... For purposes of tax treatment of the benefits provided, plans may require an affidavit or similar document indicating whether a domestic partner enrolled for coverage qualifies as a tax dependent and imposing an affirmative obligation on the employee to notify the employer of any changes."  MORE >>

Imputed Income for Domestic Partner Health Coverage

"The Internal Revenue Code generally does not provide employees with an exclusion from income for domestic partner health coverage. Employers must therefore (in most situations) take the employee contribution for domestic partner coverage on an after-tax basis, and treat the fair market value of the employer payment for the domestic partner's coverage as taxable imputed income to the employee."  MORE >>

Access to Employer-Sponsored Health Coverage for Same-Sex Spouses: 2020 Update

"[As] of mid-2020, while employer offer of same-sex spousal coverage has increased over time, it remains less common than opposite sex spousal coverage. These increases follow two other Supreme Court rulings (United States v. Windsor and Obergerfell v. Hodges) which guaranteed the right to marriage nationwide and paved the way for wider access to health insurance through the workplace[.]"  MORE >>

HSAs and Domestic Partners

"The employee will have the standard family HSA contribution limit, but the employee typically will not be able to take tax-free medical distributions from the HSA for the domestic partner's medical expenses."

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Employee Benefit Plans Must Consider Sexual Orientation and Gender Identity Issues After Bostock

"Consistent with the Bostock decision, the Michigan Department of Insurance and Financial Services (DIFS) issued Bulletin 2020-34-INS on August 11, 2020 confirming that it interprets 'sex' in all statutes and rules under its administration to include sexual orientation and gender identity."

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Impact on Employee Benefit Plans of Supreme Court Ruling on LGBTQ Bias (PDF)

11 pages. "While [this] ruling is about wrongful employment termination, the decision has implications for employer-sponsored health plans and other benefits. For example, employers may want to adjust group health plan coverage of gender dysphoria and related services, including gender-affirmation surgeries; review and compare benefits for same-sex and opposite-sex spouses; and review the need for gender assignment as an identifier in benefit plan administration." [Bostock v. Clayton County, Ga., No. 17-1618 (S. Ct. June 15, 2020)]  MORE >>

Ninth Circuit Rules ERISA Pension Plan Must Pay Survivor Benefits to Registered Domestic Partner

"[The] plan document specifically incorporated California law, which has long required that registered domestic partners be given the same rights, protections, and benefits under law as are granted to spouses. The terms 'spouse' and 'married' were not defined in the plan document.... The Court of Appeals held that the plan's incorporation of California law meant the term 'spouse' must include a domestic partner, and that neither ERISA nor the Code provided binding guidance that was inconsistent with that interpretation." [Reed v. KRON/IBEW Local 45 Pension Plan, No. 17-17176 (9th Cir. May 16, 2019; unpub.)]

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Access to Employer-Sponsored Health Coverage for Same-Sex Spouses: 2018 Update

"In 2018, nearly two-thirds (63%) of employers offering health insurance to opposite sex spouses also offered coverage to same sex spouses and the share of employees with such access has increased over time so most (88%) now have access."  MORE >>

Text of OPM Final Regs: Federal Employees Health Benefits Program and Federal Employees Dental and Vision Insurance Program: Expiration of Coverage of Children of Same-Sex Domestic Partners

"Understanding that we have provided agencies with additional time for compliance given that overseas federal employees may not have been able to marry immediately following the Supreme Court decision, OPM is issuing a final rule removing references to domestic partners and domestic partnerships from the regulations. Based on the Supreme Court decision and the two additional year's lead time for domestic partners overseas to marry, the current language in the CFR is not needed and may be somewhat confusing. There is no change in coverage for children whose same-sex partners are married."

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May Terminating Employees Elect COBRA Coverage for Domestic Partners?

"[D]omestic partners -- unlike spouses -- do not qualify as qualified beneficiaries under COBRA and, therefore, do not have independent COBRA rights. But if you wish to provide continuation coverage rights like those provided to spouses, you may do so through plan design."

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Wisconsin Governmental Entities Now Prohibited from Offering Domestic Partners Benefits

"[T]he official passage of the 2017-2019 biennial budget [included] the creation of Wis. Stat. Section 66.0510, which prohibits all municipalities, counties, and school districts from offering employee benefit plan coverage to domestic partners of employees as of January 1, 2018.... [T]he Legislature pointed to the State's recent legalization of same-sex marriage as eliminating the need for government employers to offer benefit plans which cover domestic partners."

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More Employers Are Requiring Same-Sex Couples to Marry to Receive Health Benefits

"In 2016 ... the number of employers offering health care benefits to unmarried same-sex couples has dropped. Employers report that: 31 percent are providing benefits to same-sex partners in civil unions (down 20 percent from 2014) 48 percent are providing benefits to same-sex domestic partners (down 11 percent from 2014)."  MORE >>

Texas Supreme Court Disputes Reach of Obergefell in Employee Benefits Case

"[T]he Texas Supreme Court held that Obergefell v. Hodges ... does not necessarily require state governments to extend marital benefits to same-sex married couples.... The Texas Supreme Court remanded the case, so the trial court could decide if the Constitution or Obergefell 'requires citizens to support same-sex marriages with their tax dollars.' " [Pidgeon v. Turner, No. 15-0688 (Tex. June 30, 2017)]

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The Retro-Effect: Outstanding Issues in Qualified Plan Recognition of Same-Sex Marriage as Highlighted by Schuett v. FedEx

"[This case] highlights the reality and potential impacts of a retroactive application of Windsor. Plan administrators and fiduciaries should remain aware of the possibility of claims brought under Title I of ERISA to enforce a benefits claim by a participant in a same-sex marriage who retired before the Windsor decision ... Furthermore, Plan administrators should be aware that plan amendments that provide for recognition of same-sex marriages beginning on the date of the Windsor decision will not protect the plan and fiduciaries from Title I claims stemming from events prior to the Windsor decision." [Schuett v. FedEx Corp., No. 15-cv-0189 (N.D. Cal. Jan. 4, 2016)]

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IRS Notice of Hearing on Definitions of Terms Relating to Marital Status

"This document provides notice of public hearing on proposed regulations relating to the holdings of Obergefell v. Hodges, 2015, Windsor v. United States, 2013, and a revenue ruling that define terms in the Internal Revenue Code describing the marital status of taxpayers. The public hearing is being held on Wednesday, January 27, 2016, at 10:00 a.m. The IRS must receive outlines of the topics to be discussed at the public hearing by Friday, January 15, 2016."

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IRS Provides Guidance on Application of Federal Tax Law to Employee Benefit Plans in Light of Obergefell Decision (PDF)

"Solely for federal tax law purposes, Obergefell does not require additional amendments to be made to qualified retirement plans or to health and welfare plans. However, [Notice 2015-86] provides helpful guidance in the event that an employer wishes to make discretionary changes to its plan and/or to allow employees to make mid-year cafeteria plan election changes in light of Obergefell -- and it reminds employers that there may be changes in the operation (as opposed to the form) of their health and welfare plans as a result of Obergefell."

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Text of IRS Notice 2015-86: Application of Obergefell to Qualified Retirement Plans and Health and Welfare Plans (PDF)

"This notice provides guidance on the application of the decision in Obergefell v. Hodges to retirement plans qualified under section 401(a) of the Internal Revenue Code (Code) and to health and welfare plans, including cafeteria plans under section 125 of the Code. This guidance relates solely to the application of federal tax law with respect to same-sex spouses."

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Text of OPM Final Regs: Federal Long Term Care Insurance Program Eligibility Changes

"[OPM] is issuing a final rule to amend the Federal Long Term Care Insurance Program (FLTCIP) regulation to expand ... the definition of 'qualified relative' to include opposite-sex domestic partners of Federal and U.S. Postal Service employees, annuitants, members of the uniformed services, and retired members of the uniformed services. In addition, this rule provides that adult children of domestic partners will be considered one of the types of individuals comprising the statutory term 'qualified relative' who may apply for FLTCIP coverage."

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FedEx May Owe Same-Sex Spouse Pension Benefits

"FedEx Corp. may owe pension benefits to the widow of a worker who died a week before the U.S. Supreme Court struck down bans on same-sex marriage in 2013, a federal judge ruled. The judge found in her Jan. 4 decision that FedEx acted reasonably in interpreting its pension plan -- which, prior to 2013, limited spousal benefits to opposite-sex spouses. But she said the company's denial of benefits may have violated [ERISA], which now bars plans from distinguishing between same- and opposite-sex spouses." [Schuett v. FedEx Corp., No. 15-cv-0189 (N.D. Cal. Jan. 4, 2016)]

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States Begin to Issue Guidance on Marriage Benefits

"Some states mention the payroll issues in their guidance and some states do not. All the states that issue guidance generally focus on income tax issues and sometimes other issues, such as pensions." [Article includes a summary of guidance issued by Alabama, Kentucky, Louisiana, Michigan, Nebraska, North Dakota, and Ohio.]  MORE >>

Wal-Mart Sued for Retroactive Availability of Spousal Benefits for Same-Sex Spouses

"The lawsuit seeks compensation for medical expenses for the years in which Dee was denied spousal coverage.... The suit argues that because Wal-Mart would have provided Jackie with coverage for her wife [Dee] if she had been a man, failing to provide it because she is a woman constitutes sex discrimination.... The EEOC's Strategic Enforcement Plan (SEP) ... lists 'coverage of lesbian, gay, bisexual and transgender individuals under Title VII's sex discrimination provisions, as they may apply' as an enforcement priority for FY2013-2016. In Jackie's case, the EEOC issued a final determination on January 29, 2015 that Wal-Mart's failure to provide spousal coverage of Dee constituted sex discrimination."

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Governmental Plans: Moving Forward After the Obergefell Decision

"The Obergefell decision will now impact state level eligibility and benefit plan designs that are not governed by the qualification requirements of the Internal Revenue Code.... [T]he Supreme Court relied on the Fourteenth Amendment to find that state laws prohibiting same-sex marriage was unconstitutional.... For governmental plan administrators that have not yet extended same-sex spousal coverage under their health and welfare plans, the time may be ripe to consider amending these plan provisions."

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Non-Governmental Employer Considerations for Retirement Plan Administration After Obergefell

"In the absence of other guidance, a reasonable plan administrator might turn to the IRS's approach after Windsor (even if only by analogy) and set the 'compliance date' for Obergefell as the date of the Court's decision (June 26, 2015). That said, since the Obergefell decision will largely affect the tax laws of those states/jurisdictions that previously did not recognize same-sex marriage, each state or jurisdiction may issue its own guidance on the timing of the implementation[.]"  MORE >>

Maryland Revamps Its in Vitro Coverage Mandate to Accommodate Same-Sex Couples

"Maryland same-sex couples who wanted to take advantage of a state law that requires insurers to cover pricey in vitro fertilization treatments used to face insurmountable obstacles.... This month, however, those restrictions were eliminated for married same-sex couples under a new law. It also prohibits insurers -- when they cover other types of fertility treatments -- from applying those conditions to same-sex couples. The law doesn't change the IVF coverage rules for married, heterosexual couples."

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