Supreme Court's marriage equality ruling affects health benefits nationwide

Supreme Court’s marriage equality ruling affects health benefits nationwide

The U.S. Supreme Court made same-sex marriage legal in all 50 states on June 26, 2015. With this decision, all federal benefits will also be available to same-sex couples. As a result, companies nationwide may need to adjust their benefits programs to include  these couples on Social Security, veterans programs and more.

A history of same-sex marriage through the courts
The legality of same-sex marriage came with the Obergefell v. Hodges ruling and opened the door for gay and lesbian couples to receive the same benefits as other marriages. Before the decision, 36 states and the District of Columbia allowed gay couples to marry, according to Newsweek. The other 14 denied the unions, and were therefore able to decline certain benefits to same-sex spouses.

The majority of federal benefits were already available to same-sex couples after the Supreme Court found a portion of the Defense of Marriage Act to be unconstitutional in 2013. U.S. vs. Windsor found the federal interpretation of the term "marriage"  and "spouse" couldn't be limited to heterosexual couples, granting all spouses full federal benefits. State-held benefits, however, continued to bar same-sex spouses from programs aiding veterans, the disabled and the elderly. Now that all 50 states are federally obligated to recognize the unions, all benefits must also be available to same-sex couples.

Social Security suggested that same-sex spouses, who were initially denied due to their state not recognizing their union, reapply for benefits right away. This way, the date of their application will be preserved and these couples won't miss out on potential benefits, according to U.S. News and World Report.

Next steps for employers
The marriage ruling could make it easier for large employers and their human resource administration teams, HR Executive reported. Before the ruling, nationwide companies were under the jurisdiction of the states to decide what benefits to provide to same-sex couples. Now, companies will only have to meet federal standards, instead of juggling both state and government regulations. As a result, some of these businesses will start from the beginning to implement the changes necessary since the federal recognition of all unions.

Following the 2013 U.S. vs. Windsor ruling, employers were required to extend benefits to same-sex couples in fully insured plans. Those in self-funded, self-insured plans, however, did not fit under that umbrella. While Obergefell vs. Hodges doesn't change the latter, companies should be aware of the possibility for legal action, in the form of sex discrimination lawsuits under state law. It's vital that businesses are aware of what employees are covered under each type of insurance plan to avoid claims of inequality. 

Now that all marriage is legal, whether it is between an opposite-sex or same-sex couple, companies have to decide if their current coverage should change for domestic partnerships. Many companies supplied benefits to couples in an unmarried partnership before same-sex marriage was recognized across the country. The recent decision forces companies to reexamine if partnership benefits are something they want to keep around for couples who choose not to marry. This is a choice that will affect businesses for years to come and an open discussion between the HR team and people directly affected by the change could be helpful for companies.

Taxation on benefits also changing
The Supreme Court's decision will also affect how health benefits are taxed. For those states that originally did not recognize same-sex  marriage, the value of same-sex spousal benefits was included as taxable income. The new ruling will get rid of that and the additional benefits will not be taxable in any state, according to the Society for Human Resource Management.

Human resource teams across the country should take a deeper look into their current regulations regarding same-sex benefits. Those that do not meet the stipulations of the new ruling will need to change. The implementation and transition will take time, but to avoid potential legal action and federal penalties against them, businesses should ensure that their benefits programs apply to all married couples, regardless of sexual orientation.

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