When Gay Employees Can Enroll Spouses for Health Insurance ...

If you work for a company that provides your health benefits, you typically need to wait until the annual ?open enrollment? period to add a family member or a dependent to your plan. There are exceptions, of course. If you get married or have a child, for instance, you can add them to your plan right away.

But a reader recently raised an important question: How do these rules apply to lesbian and gay couples, since their marriages are not recognized by the federal government? If gay employees marry, will they be able to immediately add their new spouse to their health coverage?

There are never any tidy answers when it comes to the financial lives of same-sex couples, and this question is no exception.

Before untangling the issue of when you can enroll a same-sex spouse, we first have to address who can enroll because that will vary depending on whether your state recognizes same-sex unions.

If you live in a state that does not recognize same-sex marriage or an equivalent, your company probably has to offer domestic partner benefits if you want to add a new spouse or partner.

?Many employers will let you add your partner if it?s a new partnership, and they may let you do it midyear,? said Todd Solomon, partner in the employee benefits practice group at McDermott Will & Emery and author of ?Domestic Partner Benefits: An Employer?s Guide.? ?But some may make you wait until open enrollment.?

In other words, it?s up to the company to decide.

If you live in a state that does recognize same-sex marriage, obtaining coverage for a spouse is much easier because the spouse is treated exactly the same as the spouse in a heterosexual married couple under state law. So state workers are eligible for spousal coverage, and the same often goes for employees of private companies. (There are exceptions: if an employer doesn?t contract with an insurance company but instead pays for health benefits out of their own assets ? so-called ?self-insured plans? ? the employer is not subject to the state?s insurance laws. That means the employer may rely on the federal definition of marriage but could choose to cover same-sex spouses.)

The state law, though, doesn?t govern when a company is required to let you enroll a new spouse, Mr. Solomon said. ?While state law could require same-sex spouses to be covered under an insured plan, it doesn?t govern when that enrollment would occur.?

Instead, it?s probably going to depend on your company?s own policy for same-sex spouses, which often tracks the federal rules. Typically, an employee needs to experience a qualifying life event, say, a marriage or the birth of a child, to add a family member. That?s because many health plans that offer employees the ability to pay for coverage on a pretax basis ? under an arrangement known as a cafeteria plan ? are governed by a section of the Internal Revenue Code, Mr. Solomon said.

But since the I.R.S. only recognizes marriage between one man and one woman, these rules don?t apply to same-sex couples. And that?s why gay employees are not allowed to pay for their spouse or domestic partner?s coverage using pretax dollars (nor are employees with opposite-sex domestic partners, though at least they have the option to marry).

So that means employers aren?t bound by the so-called qualifying event rules. ?The life event rules? don?t automatically apply to same-sex couples, but they can if the employer decides to operate the plan that way, as many employers do,? Mr. Solomon said. ?More and more, I have seen big companies try to operate their enrollment procedures the same way for same-sex couples as they do for opposite-sex couples.?

What?s the policy at your company? Has anyone run into any problems adding a same-sex spouse to their plan outside of the open enrollment period?

Source: http://bucks.blogs.nytimes.com/2012/02/21/when-gay-employees-can-enroll-spouses-for-health-insurance/

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