Home > Employee Benefits > Employee benefits for same-sex couples changing as states legalize marriage

Employee benefits for same-sex couples changing as states legalize marriage

same-sex_marriageAs the number of states with legal same-sex marriage climbs to 37 plus the District of Columbia, some employers are informing their staff that they must wed in order to continue providing health-care coverage for their partners. According to a federal tally, approximately one-third of public- and private-sector employees in the U.S. have access to benefits for unmarried same-sex partners. However, a Supreme Court ruling that legalizes same-sex marriage in all 50 states will likely cause more employers to drop same-sex partner benefits in favor of spousal benefits.

Over the past decade, more and more companies offered coverage for employees and their partners as a way to provide equal benefits for couples who could not wed legally. However, some employers who offer benefit coverage for same-sex partners are now saying it is only fair to require these couples to marry, where legal, in order to extend coverage.

Delta Air Lines and Verizon are two of companies that have begun phasing out same-sex domestic partner health benefits for employees in states where same-sex marriage is legal. Another motivation for companies requiring spousal benefits for same-sex couples in legal states is the threat of being accused of reverse discrimination by heterosexual employees who cannot obtain coverage for partners unless they are legally wed.

Some employers have started to scrutinize spousal benefits overall. In the past three years, a number of companies including UPS have dropped spousal coverage or imposed surcharges on spouses who can obtain health insurance elsewhere. Other companies, however, are making marital status irrelevant for receiving benefits after recognizing that some employees prefer not to marry regardless of their sexual orientation. Google and International Business Machines Corporation (IBM), for example, are offering partner benefits to all unmarried couples as a way to recruit more employees.

If you have questions on your company’s benefit program, contact a member of the Employee Benefits team at WGA.

About the Author

Anita Verheul_jpgAnita Verheul is an Executive Vice President at WGA in the Employee Benefits Group. Ms. Verheul co-manages the Employee Benefits Practice at WGA where she has responsibility over all client deliverables, including WGA’s client management staff, specialty resource services and carrier relationships.

617.646.0352 | AVerheul@wgains.com | Connect with Anita on LinkedIn |

  1. Anita Verheul
    July 6, 2015 at 2:51 pm

    On June, 26, 2015, the supreme court announced its decision to guarantee same-sex marriage throughout the United States. This constitutional amendment will have an impact on employer sponsored health plans, both for states that previously prohibited same-sex marriage and those that had already legalized it.

    In states where same-sex marriage was not previously legal, employers and carriers will need to make adjustments to their administrative and enrollment processes including revamping enrollment forms and new hire onboarding procedures. For employers and affected employees, there will be changes to the tax treatment of benefit plans for same sex couples. Prior to June 26th states that did not allow same-sex marriage, but where the employer may have offered domestic partner coverage, there were payroll tax issues for the employer and imputed income tax issues for the employee on both a state and federal level. In states where same-sex marriage was legal, a different tax treatment applied for state payroll and income as opposed to under federal tax laws. Now the tax laws will apply evenly to all married couples.

    This brings up a question for employers that have offered domestic partner coverage. Historically this practice was adopted to allow benefit coverage to same-sex partners who did not have the right to marry. Many employers then expanded the domestic partner coverage to include those of opposite sex. Will this practice continue or will it go away now that all have equal access to marriage? Another consideration is the high cost of health care. Employers have started to adopt surcharges for spouses that are covered but who have access to other coverage and some employers are even dropping spousal coverage from their plan coverage.

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