Health Plan Eligibility Not Automatic After Same-Sex Marriage Ruling

By Nick Blumberg
Published: Friday, October 31, 2014 - 6:05am
Updated: Friday, October 31, 2014 - 2:58pm
Fennemore Craig attorney Chad Mead.

The historic ruling making marriage between same-sex couples legal in Arizona has started to have wider effects. State health officials are looking into changes to vital records, like birth and death certificates. And some people may now be able to carry a spouse of the same sex on a health plan offered by their company. But not everyone will be eligible for that benefit.

Now that a federal judge has struck down Arizona's gay marriage ban, public employees should be eligible to enroll a spouse of the same sex in their employer's health insurance plan. But with private employers, it's not a foregone conclusion.

"What governs is whether your employer's health plan is governed by state law or federal law," said Chad Mead, an attorney who specializes in employee benefits. He said many small-to-medium sized companies pay for health plans that are what's called "fully insured." Those plans are covered by state law and Mead thinks they'll have to start recognizing any spouse.

But companies that offer "self-funded" or "self-insured" health care, where the benefits are just paid out of corporate assets, can define their plans however they like. Mead says a federal court has found the law that applies to those self-funded plans, called ERISA, doesn't explicitly require companies to recognize a same-sex marriage.

"Although there was no cause of action under ERISA, there might be a cause of action under Title VII for sex discrimination," Mead said.

That's exactly the argument from the group Gay and Lesbian Advocates and Defenders. It's representing a woman named Jackie Cote whose employer refused to cover her wife.

"If Jackie had been a man, she would have gotten those benefits for her wife. But simply because she is a woman, she was denied those benefits," said GLAD senior staff attorney Janson Wu.

And as for health plans in Arizona governed by state law, Wu doesn't agree that they'll have to cover a spouse who is the same gender as an employee. Arizona doesn't have an employment non-discrimination law. And the laws that cover health benefits for employees of a private company are complicated, to say the least.

But Wu says whatever the law, employers should offer coverage to the spouses of gay and lesbian workers.

"It’s the right thing to do, it’s good business practice, it increases the morale of their employees," he said.

And, says Mead, it could keep your company from getting sued.

"You need to be conscientious of the way the winds are blowing and what courts are doing. As of today, you could have your plan drafted [to exclude spouses of gay and lesbian employees] and it's perfectly legal, but I think you have a target on your back," Mead said.

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