Same-Gender Marriage Complicates Benefits

No sooner had benefits consultants digested the possible ramifications of the California Supreme Court's ruling that same-gender couples must be permitted to legally marry in that state than a measure that could overturn that decision qualified for the ballot in the November election.

If the decision stands, California employers or companies that have employees in the state need to review their benefit offerings and documents to determine how to include participants' same-gender spouses and communicate those decisions to employees. In fact, those companies will be grappling with the issue before November; same-gender marriages will commence on June 17.

Because there is no residency requirement to marry in California, employers without a California connection should also be prepared to answer questions about coverage from plan participants who, after marrying someone of the same gender in California, are likely to expect their spouse to receive the same benefits that are available to opposite gender spouses.

Under federal law no state is required to recognize a same-gender marriage licensed under the laws of another state, so the impact of the California ruling on employee benefit plans may be limited, according to Segal, a benefits, compensation, and HR consulting firm. But federal law affords great flexibility in defining the group of beneficiaries to whom coverage will be provided and some employers in other states offering health plans -- especially self-insured plans -- may choose to provide the same coverage and rights to same-gender and opposite-gender spouses, or they may extend coverage generally without extending all the rights guaranteed by federal laws.

Whatever tack companies choose to take, it could be a bumpy ride in terms of clarifying same-gender spouses' eligibility. Massachusetts' decision to allow same-gender marriage in 2004 spawned lawsuits and turmoil in benefits departments. CFOs can expect to hear that their benefits director is talking to attorneys and consultants about the issue between now and November when California voters will decide if the court decision should stand.