The Supreme Court’s recent decision to uphold gay marriage in the United States will likely affect all facets of benefits administration, especially when it comes to things like health benefits and family leave. Employers will likely also need to take a look at the benefits they’re offering for domestic partnerships as a result of the ruling.
“The nice benefit for employers is the decision will help simplify benefits since all spouses will be treated uniformly,” Nick Otto writes for Employee Benefit Adviser, quoting Tami Simon, managing director for Buck Consultants at Xerox. “We believe it’ll allow for easier administration and hopefully turn into some savings for employers.”
Here’s a quick look at some affected areas.
Whether employers will be required to offer plans to the same-sex spouses of employees is still murky, Jay Hancock reports for NPR. “Edward Fensholt, a benefits lawyer with brokers Lockton Companies, expects most companies to cover same-sex spouses if they already offer benefits to opposite-sex spouses,” Hancock writes. “But the decision doesn’t require them to.”
They’ll likely want to carefully consider it, though. Hancock quotes gay-rights advocacy group Lambda Legal, which warns employers not to violate federal sex discrimination laws. “You should be able to add your [same-sex] spouse to your health insurance,” Hancock writes, quoting Lambda Legal.
Even before this summer’s Supreme Court Decision, the Department of Labor changed its regulations related to the Family and Medical Leave Act of 1993, writes Keith McMurdy for Employee Benefit News. The new rules changed the definition of spouse to include legally married same-sex spouses. “This is somewhat significant in the employee benefits arena in that health benefits are generally continued during a qualified leave,” McMurdy writes.
“More often than not, the request for FMLA leave is handled through the HR department, which also happens to be handling benefit plan administration… Employers subject to the FMLA clearly have to abide by this new rule, but benefit plans can also use it as a sounding board to ensure proper compliance.”
Changes to Benefits for Domestic Partners
Employers will likely need to carefully consider how changing their benefits for domestic partnerships will affect their current and future employees, Otto writes. Those who decide to drop such offerings will likely want to offer a grace period in order to allow employees using such benefits to plan for the change.
“In the event employers do wish to eliminate such benefits, a key consideration is timing,” Otto writes, quoting Todd Solomon of McDermott Will & Emery. “Many employers will likely offer a grace period, of several months or one year, during which an employee can get married before having their partner dropped from the employer’s benefits.”