Over the past decade, many employers extended dependent coverage under their group medical insurance plans to employees’ domestic partners. For many employers, this change was made in order to allow gay employees to add their partners to the plan. Given that same-sex marriage was illegal in most states, this addition was the only practical way to allow such employees to add their domestic partners to the plan. In some situations, this was the only way that these domestic partners could obtain medical insurance coverage. Employers typically extended such coverage to same and opposite-sex partners.
Given the Supreme Court’s Windsor decision and subsequent judicial overturning of gay marriage bans in most states, employers may be rethinking whether their group plans should include coverage for unmarried domestic partners. In addition to the legalization of same-sex marriage, the Affordable Care Act provides coverage options for domestic partners to obtain health insurance outside of the employer’s plan.
Extending dependent coverage to domestic partners entails certain burdens. For employers, coverage is usually conditional upon the receipt and review of affidavits certifying the couples’ domestic partner status. For the employees, such coverage can involve complicated tax issues.
Employers whose original intent was not to provide coverage to all unmarried partners, but only as a necessary means to allow gay employees to add their partners to the plan, may want to reconsider this plan option. A more “traditional” plan that requires that dependents, whether same or opposite sex, be married spouses, may result in a return to a more simplified plan structure.