Although same-sex couples can now legally marry in all US states, here in Pennsylvania, gay and lesbian partners were already able to marry for the last year. But now, it is the “law of the land,” as the Supreme Court ruled 5-4 that 14 states will no longer be able to enforce their ban. It took about 20 years of litigation, but the fight appears to be over.
In the majority opinion, Justice Anthony Kennedy proclaimed “no union is more profound than marriage. In forming a marital union, two people become greater than once they were.” The number of same-sex married couples (currently around 400,000) is expected to substantially increase.
Self-insured and self-funded group health plans subject to ERISA requirements may now be forced to offer medical coverage to same-sex spouses. Although this segment of the legislation is a bit vague, employers may choose to avoid risky and expensive litigation and simply offer the benefits. Also, “domestic-partner” coverage may simply continue, since the cost and coverage would be identical.
Discrimination Not Allowed
Since the Keystone State allows these types of marriages already, an insurer can not discriminate against either partner when applying for a policy, or when a claim is paid. Premium tax-credits and potential out-of-pocket expenses must also be treated without discrimination. However, in order to take advantage of subsidies, the couple must file a joint tax return or state that they intend to file together.
NOTE: In 2014, in the US District Court (Middle District of Pennsylvania) overturned the Pa “Marriage Laws” which required marriages to only be between members of the opposite sex. The Judge was John E. Jones III, and an appeal was not filed. Details of the ruling can be found here. The ruling took effect immediately since there was no stay.
Effect On Pennsylvania Health Insurance Coverage
One of the biggest changes will save time, but not necessarily money. Prior to the ruling, many insurers insisted that each person (husband and husband or wife and wife) must be covered separately under two different policies. Although the overall cost may not have been impacted, often the maximum out-of-pocket expense was higher, and billing was more inconvenient. One policy and a single family deductible would, of course, be more desirable.
By consolidating both persons on one Pa health insurance policy, a single deductible will be available from many carriers, including Highmark, Aetna, Keystone, UnitedHealthcare, and many more. Thus, if one partner has a major illness or sickness, and meets the annual deductible and applicable coinsurance, the other partner will have no out-of-pocket expense on covered expenses. UPMC health plans (Western Pa) will also incorporate these changes into their policy designs. NOTE: Not all policies offer a single family deductible.
For example, many existing Silver-tier plans have an individual deducible of $3,000 and a family deductible of $6,000. Thus, if one person is hospitalized and meets the $3,000 single deductible, an additional $3,000 deductible must be met. However, beginning in 2016, depending on the policy and carrier, in the previous scenario, the entire deductible will have been met. This is especially cost-effective when one person has significantly more medical expenses than the other covered person.
Less than 50% of small and large businesses offer medical benefits to unmarried same-sex couples. However, more than 90% offer coverage to spouses. And although the Supreme Court ruling on same-sex marriages does not specifically state that this practice must end, there will undoubtedly be an increase in the number of spouses that can now purchase a group policy.
“Domestic Partner Benefits,” however, may reduce, especially if you wok for a large company. If two partners decide they don’t want to get married, it’s possible the coverage they currently receive, would be less comprehensive than if they married. It’s expected that a simple comparison tool will be offered so employees in this situation cam make an educated and informed analysis.
Social Security benefits will now also be affected. Typically, there are more advantages than disadvantages to being married. Spouses, children, and the estate of the deceased could end up with more funds. Of course, sudden illnesses, divorce, prenuptial agreements, and divorce will now also play a role.
With Open Enrollment beginning again in November (effective date of policies will be January, February, or March of 2016), newer plans and coverage descriptions may be tweaked to include any mandated benefits or required changes. Existing plans can also be adjusted to conform to updated requirements. However, “grandfathered” plans that are not required to adhere to Affordable Care Act legislation guidelines, may remain the same.
Although Open Enrollment just ended, for 2017 effective dates, same-sex couples can apply for coverage under one policy. However, the filing status of your federal tax return could affect federal subsidy eligibility and the actual amount applied to the policy.