Smart Benefits: Coverage for Civil Union Couples
Monday, October 31, 2011
While Rhode Island doesn’t allow same-sex couples to marry, effective July 5th of this year, they may enter into a civil union in the state, which gives them the same state rights, benefits, protections and responsibilities provided to married couples.
What does that mean for employers? In terms of insurance policies, eligibility and benefits, spouses in a civil union must be treated the same way as those in married couples. And that applies to medical, dental and vision coverage – as long as the benefit plans are provided under a contract written in the state and governed by Rhode Island insurance law.
So what do Rhode Island employers need to know when it comes to benefits for civil union spouses and their dependents? Here are some key questions and answers.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTDo domestic partners have to enter a civil union to get benefits?
For Rhode Islanders to receive the same legal status as married couples, domestic partners must enter into a Rhode Island civil union as provided by the law, which requires obtaining a license. If employees are in a civil union or comprehensive domestic partnership in another state, it will be treated as though it were a Rhode Island civil union – provided it meets the eligibility requirements.
Can I require an employee to provide evidence of a civil union?
Yes, but only if you require proof of marriage from opposite sex married couples.
Do we need to provide spousal coverage if our plan is self-funded?
Employers don’t have to offer coverage to civil union spouses if their plans are self-insured, unless they are sponsored by state or local governments or school districts. Self-insured plans are governed by ERISA, which does not require employers to cover same-sex spouses – but nor does it prevent them from doing so.
What if we are a religious organization?
If you are a religious organization or any organization that is connected to a religious organization, then the Rhode Island civil union law will not require you to provide any kind of spousal benefits to civil union partners.
How about if the civil union spouse lives in another state?
Employers have to offer coverage to spouses living in other states if they are covered under a contract written in the state of Rhode Island.
Do employers need to cover the child of a civil union spouse?
Yes, if you offer coverage to dependents of other employees, you must do the same for children of a civil union spouse.
When can civil union spouses enroll in our health plan?
An employee can add a spouse within 31 days of the civil union effective date or, if not done during that period, during the next annual open enrollment.
How are the employer-sponsored health benefits for a civil union spouse treated for tax purposes?
If an employer extends coverage to a civil union spouse, the “fair market value” of those benefits is considered income to the employee for federal tax purposes – unless the spouse qualifies as a “health dependent” under IRS rules. Rhode Island does not treat the value of these benefits as income for state tax purposes.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.
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