Married And Yet Eligible: Same-Sex Marriage And Health Insurance

In June, the U.S. Supreme Court ruled 5-4 to legalize same-sex marriage in all 50 states. Colorado had already begun to recognize same-sex marriage in 2014.

Now, attention is turning to the practical details, including health insurance.

As same-sex spouses gain access to employer-sponsored benefits, we expect overall coverage rates to increase. Almost all small firms (96 percent) and large firms (99 percent) offer health insurance benefits to spouses of their employees, according to the Kaiser Family Foundation.

But fewer extend benefits for domestic partners – 39 percent of small firms and about half of large firms, according to Kaiser. There is little difference in same-sex or opposite-sex partnerships, it reported.

Generally, married couples have access to more benefits than those in domestic partnerships. New York state issued 12,280 marriage licenses to same-sex couples soon after legalizing same-sex marriage in 2011. Soon after, the state saw a substantial increase in employer-sponsored coverage among spouses.  

However, debate continues about whether employers who offer benefits to opposite-sex spouses must offer coverage to same-sex spouses. Employers who buy fully insured medical plans and pay an insurance company monthly premiums will likely be required to offer coverage to same-sex spouses in light of the Supreme Court ruling.

But there’s more ambiguity when it comes to self-insured medical plans. (About 61 percent of all firms are self-funded, a percentage that increases to 83 percent for large firms with more than 200 employees.)

Some lawyers say many of these employers will offer coverage to same-sex spouses, but that the court’s decision does not require them to do so. But excluding same-sex spouses could subject a company to a discrimination lawsuit.

Many universities have already announced policy changes to their benefits packages. The University of Georgia is making health, dental, life, vision and other benefits available to same-sex spouses. Couples will be allowed to apply retroactively, so their coverage is active the same day as the court’s ruling. The University of Texas and Kansas State have announced that same-sex benefits will begin this summer.

A number of Christian colleges are also taking action. Hope College in Holland, Mich., will offer same-sex coverage, and a number of other schools, including Notre Dame, offered coverage prior to the Supreme Court decision and will continue to do so.

The marriage decision will give couples the same tax break on health coverage as opposite-sex couples. In 2013, the Supreme Court eliminated the federal tax that same-sex couples paid on the value of their health insurance, but state differences still existed. Now, benefits extended to same-sex couples are eligible for the tax break just like the benefits offered to opposite-sex couples.

Some advocates are concerned that employers will eliminate domestic partnership benefits now that same-sex marriage is legal. Before the Supreme Court ruling, Verizon, Delta Air Lines, IBM and others had eliminated domestic partnership benefits in states where same-sex marriage was legal, instead offering spousal coverage. But other companies, like Google, are maintaining their domestic partnership health coverage for same-sex and opposite-sex couples.

As for Medicaid, marriage can make a difference for all couples. Combining two households can lead to changes in income and family size — factors that weigh into eligibility for the program. And a child’s eligibility for public assistance may change as well. 

More questions about health insurance coverage in a same-sex marriage America remain: When will benefits kick-in? Will there be a new “special enrollment” period for newly married same-sex couples? If an employer offers coverage to opposite-sex spouses, are they required to offer coverage to same-sex spouses? And do these benefits need to be equal?

 In Colorado and elsewhere, human resource departments are trying to figure out their next moves. But one thing seems certain: More people will be covered by health insurance as a result of the Supreme Court ruling.