On June 25, 2015, the Supreme Court handed down its decision in Obergefell v. Hodges, in which it ruled that the United States Constitution does not permit States to bar same-sex couples from marriage on the same terms as those accorded to couples of the opposite sex. In addition, it held that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State simply because it is a same-sex marriage.
While much will be written about what this decision means for America in general, we focus here on what it may mean for employer-sponsored health plans. Of course, the various federal agencies with a role in health plan governance have not yet reacted to it; that said, we believe that its effect on most employer-sponsored plans will be minimal.
Insured Plans: Under existing rules, insurers that offer coverage to opposite-sex spouses must offer coverage to same-sex spouses if the marriage was contracted in a state that recognizes the marriage. However, the rules do not require a group health plan or group health insurance coverage provided in connection with such plan to provide coverage that is inconsistent with the terms of eligibility for coverage under the plan, or otherwise interfere with the ability of a plan sponsor to define a dependent spouse for purposes of eligibility for coverage under the plan.
Church Plans: The decision does not require church plans to cover same-sex spouses.
Self-insured ERISA Plans: Similar to the rule for insured plans, the decision does not require the eligibility rules of a self-insured ERISA plan to include same-sex spouses even if they do include opposite-sex spouses. Some plans have spousal eligibility language that turns on the legitimacy of the marriage in a particular State, for example, the employer’s domiciliary State. Since the Obergefell case requires all States to recognize legally contracted same-sex marriages, employers will want to check their eligibility language to make sure that it does not produce unintended results.
Government Plans: The decision, which is specifically focused on actions by States, may require plans sponsored by State and local governments or their agencies to cover same-sex spouses.
Coverage of Stepchildren
Age 26 Mandate: The ACA requires plans that provide dependent coverage to cover an employee’s children to age 26. This includes an employee’s step-children; i.e., the children of an employee’s spouse who are not the employee’s biological or adopted children. Existing guidance is not entirely clear on whether a person’s status as a step-child should be determined under State or federal law. Obergefell obviates that question as the States must fall into line with the federal rules. Accordingly, plans subject to the ACA’s age-26 mandate will probably be required to offer coverage to an employee’s step-children acquired through a same-sex marriage.
Employer Shared Responsibility: The ACA assess penalties against certain large employers that fail to provide coverage to full-time employees and their dependents. Under existing rules, step-children are not considered dependents under this provision of the law.
HIPAA Special Enrollment: Plans that do not cover same-sex spouses do not have to offer special enrollment to an employee’s step-child based on marriage.
Of course, as further guidance emerges from the federal government, Compliancedashboard will be there to tell you about it.