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Sunday, June 30, 2013

How To Administer Benefits to Same-Sex and Cohabitating Partners

This week the Supreme Court struck down a key provision in the Defense of Marriage Act, essentially clearing the way for same-sex marriages in states where those are allowed.  For Group Benefits Administrators in plans that only cover spouses in traditional marriages this presents a complex set of problems.

Consider for a moment that only 13 states recognize same-sex marriages while the rest do not.  Add to that some states, such as Illinois, that don't allow same-sex marriage but do recognize domestic partnerships.  If an employer covers employees in multiple states but still only covers "spouses" under the traditional definition the complexity and potential for legal challenge is huge.

Now add to that the growing phenomenon, especially among younger workers, of cohabitating opposite-sex couples with or without children.  While it may be practical administratively to draw the line at the marriage license ("we cover married couples but not unmarried ones"), the end result works against the purpose of a group benefits plan: to attract and retain good talent.  Having similarly situated employees working side-by-side but extending insurance coverage to this one, but not that one, introduces unfairness and resentment into the workplace.

There is a simple and elegant two-part solution to this problem:

1. Extend benefits to Domestic partners, married or not.
2. Use a "Declaration of Common Law Marriage" form to document eligibility for any non-married partner.

I first came across the "Declaration" form in El Paso, Texas in the 1990's. State law there requires that common law spouses and the children of common law marriages be eligible for employer benefits.  Now remember, this is Texas, not a bastion of liberal thinking and one of the more religious states in our nation.  This methodology has been in use there over 30 years and the world didn't end. You can also find a similar form on the Web commonly used in Canada.

Now I can hear the protests:

  1. "This promotes gay/lesbian/shacking-up behavior!"
  2. "This increases businesses cost of employee benefits!"
  3. "This is another step on the slipper slope!"
To this I would simply respond that those are social and religious arguments and complaints about where society is heading.  That is not the purpose of this post. If you are an HR and/or Benefits professional you have to go into the office Monday and figure out how to legally and defensibly offer benefits that attract and retain top talent.  Use what is written above to do that: I leave the rest to the politicians and culture warriors. 

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