Pennsylvania’s Same-Sex Marriage Ban Struck Down: Potential Impacts to Group Health Plans

On May 20, 2014, U.S. Middle District Judge John Jones overturned Pennsylvania’s 1996 Defense of Marriage Act, which in addition to prohibiting gay marriages it banned recognition of gay marriages performed in states that have legalized it.  Similarly, in 2013, the United States Supreme Court struck down the federal Defense of Marriage Act (DOMA). These two decisions will have significant impact on Pennsylvania group health plans.

Insured plans, if the policy is issued in Pennsylvania, will have to treat same-sex spouses, legally married in Pennsylvania (or any other state recognizing same-sex marriage) the same as all other spouses covered under the plan. In contrast, self-funded health plans are governed by ERISA only, which generally preempts state laws. It will be some time until it is completely clear whether self-funded plans will be required to offer coverage to all same-sex spouses. This issue will be decided through litigation in the court system. Even though a self-funded health plan may not ultimately be required to provide benefits to same-sex spouses, plan sponsors should still review their plan language, specifically the plan’s definition of “spouse.” Current plan language, offering coverage to a “spouse,” will be interpreted to cover a legal same-sex spouse. If a group does not wish to cover same-sex spouses, then it would have to amend its plan language to specifically exclude same sex spouses from its definition of spouse (This action should only be taken after significant consultation with legal counsel to examine and evaluate the group’s risk of liability for litigation concerning discrimination). On a similar note, groups should be aware that once a same-sex couple is married, children of the same sex partners will become step-children (and therefore eligible dependents) under most group health plans.

While these two cases only involve legally married same-sex partners, it is a good time for plan sponsors to review their policies regarding coverage of same-sex “domestic partners.” Groups should determine whether they want to continue to cover same-sex domestic partners in the absence of marriage. Again, legal counsel should be consulted to evaluate any risk liability.

This is a rapidly developing area of the law. In the upcoming weeks, we expect to receive additional guidance pertaining to the state tax consequences of these rulings. At this juncture, groups would be well advised to consult with their own legal and tax professionals to examine the full impact of these decisions on their health benefits plans.

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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.