Benefits and Compensation

Same-Sex Marriages Legally Recognized: How Do Healthcare Benefits Change?

With the DOMA ban on same-sex marriage being ruled unconstitutional, what does this mean for healthcare benefits—will a same-sex marriage be recognized in the same way as other marriages, thus allowing the same-sex partner to receive spousal healthcare benefits paid for at the pre-tax rate?

This is just one of the many questions employers are now facing as we await additional rulings and clarifications in the wake of the DOMA ruling earlier in the year. We know that sweeping changes are coming, and healthcare benefits are likely just the start.

Same-Sex Marriage and Healthcare Benefits: Tax Advantage?

Let’s take a look at salary reductions for health plan coverage as it was before the DOMA ruling (United States vs. Windsor).

“Before the Windsor decision, the general rule was that a same-sex spouse . . . certainly did not qualify as a spouse for purposes of federal law, and unless they were a tax-dependent of the employee, the amounts that were being withheld from employee pay to provide coverage to that same-sex spouse under a benefit plan could not be pre-tax, and therefore there had to be some imputed income tax the employee to make up for [or] convert that [pre-tax deduction] to post-tax coverage.” Jason P. Lacey explained in a recent BLR webinar.

With the Windsor ruling, this withholding will now be allowed on a pre-tax basis and then spent on a benefit, just as it would be for the healthcare of any other spouse. There will no longer be a need to calculate the imputed income as was done before. In fact, children of a same-sex spouse should be covered too, without regard to dependency, because they will count as step-children.

We don’t know yet whether this situation will prompt insurers to be obliged to allow same-sex spouses to enroll in the benefit plan outside of the open enrollment period (i.e. we don’t know if this will be considered a “change in status event” since the same-sex marriage was not previously recognized).

Same-Sex Marriage and Healthcare Benefits: General Considerations

Healthcare benefits will be affected in many ways, and employers are already wondering what to do while awaiting further federal guidance. In same-sex marriage states, employers should review and revise plans, as necessary, to ensure plans do not discriminate between same-sex and opposite-sex married couples.

In states that do not recognize same-sex marriage, employers may wish to voluntarily revise plans to provide equal coverage for spouses married in jurisdictions that recognize same-sex marriage.

In any case, employers should monitor federal agency guidance regarding same-sex marriage rules.

“The Windsor decision does not say either for employers in same-sex marriage states or employers in non-same-sex marriage states—the case doesn’t really say that those employers are or are not required to provide benefits to same-sex spouses. There clearly is sort of a trend (particularly with the language in the Windsor decision out there) toward equalization of those types of relationships.

“Employers need to continually be on the lookout for guidance on those sort of issues and thinking about what they want to be doing for their workforce in a way that provides for equality and provides for a competitive advantage and all those sorts of things that you’re thinking about when you’re designing an employee benefit plan.” Lacey noted.

For more information on the healthcare benefit implications for same-sex marriages, order the webinar recording of “Employee Benefits: How the Supreme Court’s DOMA Ruling Will Impact FMLA Obligations, Healthcare Coverage, and More.” To register for a future webinar, visit

Jason P. Lacey, a partner with Foulston Siefkin LLP, in Kansas practices primarily in the areas of employee benefits, ERISA, and executive compensation. Mr. Lacey has written on the DOMA case for