Legalization Means Changes Are Afoot For Health Insurance
The recent Supreme Court decision in Obergefell V. Hodges overturning state bans on same-sex marriage effectively legalized it nationwide. No matter what your political inclinations may entail, this landmark decision will have far-reaching and important consequences for many Americans, not only same-sex couples seeking recognition under the law, but also for employers and companies across the nation. They must now by law offer spousal benefits to all couples, same-sex and heterosexual, significantly simplifying the messy previous arrangement whereby employers had to navigate a patchwork of often conflicting interstate laws on whether or not to extend benefits to same-sex couples.
For health insurance agents and brokers, it is crucial to understanding how the Supreme Court decision will affect standardization across the nation in regards to spousal benefits, and what effects it will have on employers.
According to CBS news, the short-term impact could be quite messy.
Short-term Health Insurance Risk for Same-Sex Couples
Obergefell V. Hodges was a resounding victory for gay rights. Interestingly enough, however, the ruling won’t be without fallout. As employers reassess their human resources (HR) plans in light of the new ruling, many gay couples in domestic partnerships may lose their benefits. Large corporations such as Delta, Verizon, and IBM had already rescinded the domestic partnership benefits they offered to same-sex couples who lived in states where gay marriage was already legal. Now that same-sex marriage is legal nationwide, both Delta and Verizon have given their gay employees who were in domestic partnerships six months to get married. The standardization of marriage benefits and the subsequent reevaluation (and removal) of domestic partnership benefits may also affect heterosexual couples as well. In a sense, domestic partnership benefits arrangements were always intended as a stopgap measure equalizing benefits for spouses and same-sex partners who could not legally marry. But in many workplaces, the benefits were extended to straight couples who simply weren’t in a position to marry for whatever reason. Those benefits could be at risk in the short term.
According to a poll done by the Erisa Industry Committee, nearly one-quarter of businesses surveyed indicated that they would drop benefits offered to domestic partners should the Supreme Court rule in favor of gay marriage.
Luckily, domestic partners who get dropped from their spouses’ health insurance plans still have options. Under the Affordable Care Act (ACA), they can enroll through what’s known as a “qualifying life event”. This allows individuals to purchase insurance from state and federal exchanges outside of the annual enrollment period.
As of Obergefell V. Hodges, gay couples who are already married will now be able to file joint state tax returns, inherit property easily and enjoy hospital visitation rights the same as any other married couple. Medicaid will now recognize all legally wed couples, and same-sex couples will no longer be denied tax credits on the health insurance exchanges. No matter what your personal take on the matter may be, the fact is that significant changes are afoot. As property and casualty agents, professionals, and experts in the health insurance and benefits sector, it is our duty to prepare our clients. The recent Supreme Court ruling will present a challenge, but also an enormous opportunity to help individuals and employers of all sizes purchase health insurance, use their coverage effectively and make sure they get the most out of the benefits they have purchased.