by Rebecca Hudson
Colorado’s new civil union law goes into effect May 1, meaning Colorado joins eight other states that permit civil unions or have similar laws that recognize them. Nine other states and Washington, D.C., allow same-sex marriage.
Under the Colorado Civil Union Act, the state will recognize civil unions entered into by same-sex and opposite-sex couples, granting rights afforded to traditionally married couples. But unlike a marriage, a civil union doesn’t provide federal protections or responsibilities. For example, under the Defense of Marriage Act (DOMA), federal programs define marriage as “between one man and one woman.” If a Colorado employer remains governed by federal law, any benefits it offers won’t be extended to partners in a civil union.
Here’s a look at two major benefits Colorado employers must consider under state and federal law.
Group health insurance benefits. Colorado health plans “issued, delivered, or renewed on or after January 1, 2014,” will be required to treat partners in civil unions and married employees the same. That means that if a Colorado employer offers health insurance to the spouse of an employee, then it also must offer health insurance to partners in civil unions. A plan is governed by Colorado law if the plan or insurance contract was issued in Colorado. If a group health plan is self-insured, it won’t be governed by state law but will instead be governed by federal law, primarily the Employee Retirement Income Security Act (ERISA).
Colorado employers aren’t required to offer civil union partners continuation coverage under COBRA since COBRA is governed by federal law. But after January 1, 2014, civil union partners will be able to receive continuation coverage under the Colorado State Continuation/Conversion provisions.
Since federal law doesn’t recognize civil unions, an employee who elects group health coverage for a civil union partner must pay for the benefit on an after-tax basis.
Retirement benefits. Under a Colorado public retirement system, civil union partners will be entitled to any survivor benefits provided to spouses under public-sector pension plans. For example, an employee in a civil union may designate his partner as a beneficiary under the state public employees’ retirement system.
What to do
Here are some steps to take to make sure you’re in compliance with the new law:
- Determine if state law applies to any employee benefits plan.
- Amend any plan governed by state law that provides for spousal coverage to include civil union partners. Update enrollment and beneficiary forms.
- If a group health plan must cover civil union partners, contact the plan’s insurers to incorporate the Colorado State Continuation/Conversion provisions to all plan participants.
- Confirm proper tax treatment of benefits provided to civil union partners under the federal tax code.
- Review public pension benefits and ensure they are payable to both married and civil union partners who qualify.
More details are available in the April issue of Colorado Employment Law Letter.
Rebecca Hudson is a partner in Holland & Hart’s benefits law group. She can be reached at rhudson@hollandhart.com or 303-295-8005.