By Melissa Myers and Michael J. Tucker, July 2015 Issue.
Melissa Myers: We’re anxiously awaiting the Supreme Court’s decision on the constitutionality of same-sex marriage. In fact, we may know prior to the next issue of Echo whether the high court has settled this issue once and for all, across all states, or if the nation remains in some confusing hodgepodge of “yes” states and “no” states.
Michael J. Tucker: Nearly two years ago, the high court ruled that The Defense of Marriage Act, the federal law barring recognition of state-sanctioned same-sex marriages, was unconstitutional.
Myers: We have long since eclipsed that milestone – discussions now focus on the details of the consequences of same-sex marriage for couples on federal issues such as taxes, benefits and Social Security.
Tucker: Many public and private employers are reviewing domestic partnership health benefits, given that same-sex marriage is already legal in 37 states and that it may soon be legal nationwide.
Myers: Yes, in recent years, more and more companies began offering coverage for employees and their same-sex partners as a way to provide equal benefits for couples who couldn’t legally wed.
Tucker: Now that same-sex couples can marry, some employers no longer offer domestic partner healthcare benefits. The rationale is that these employees, like their straight counterparts, must legally marry to procure the spousal health coverage.
Myers: Other employers will give employees a period of time in which to marry in order to continue the benefits. If they don’t marry in that time period, they will no longer have access to domestic partner benefits.
Tucker: The state of Arizona provided a short timeframe (from October 17 to December 31) for state employees who were electing same-sex domestic partner benefits to marry in order to continue their health coverage. Many state employees were motivated by this health insurance incentive to marry their domestic partners by the end of 2014.
Myers: Fear of lawsuits might push some firms to drop same-sex partner benefits. Companies operating in states where same-sex marriage is legal could be accused of reverse discrimination by straight employees for offering domestic partner health insurance coverage to unmarried same-sex employees but not to unmarried heterosexual employees.
Tucker: What a turn of events! The plain rationale is that what’s fair for one group of people is fair for the other.
Myers: But here’s the rub: some gay and lesbian employees say they could become vulnerable to discrimination.
Tucker: That’s right. Because marriages are of public record, employees who are in same-sex marriages could be involuntarily outed at work. Most U.S states do not have antidiscrimination protection for gay and lesbian employees, and many gay workers could legally be fired from their jobs on the basis of their sexual orientation.
Myers: More progressive companies have continuously provided domestic partner health benefits to all couples, gay or straight. Many will continue to offer these benefits to accommodate and recruit a more diverse group of employees who may have little interest in marriage.
Tucker: As the cultural imperative to marry expands from the mainstream to nontraditional families, some employers, in continuing to offer domestic partner health insurance coverage to their unmarried employees, are recognizing that not all employees in long-term relationships, whether gay or straight, wish to marry in order to provide health insurance coverage for their families.
Editor’s Note: This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax or legal professional regarding their individual situation. Neither Camelback nor Commonwealth offers tax or legal advice.