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Same-sex marriage ruling raises questions for health plans

While the Supreme Court's decision to legalize same-sex marriage nationwide lays one issue to rest, it brings more uncertainty to the subject of health benefits for both gay and straight couples alike.

Experts across the industry offer varied takes on what strategies are likely to emerge—and whether employers are now legally bound to provide health benefits to same-sex spouses if they offer it to opposite-sex spouses.

Are employers bound to offer equal benefits?

According to benefits lawyer Edward Fensholt of Lockton Companies, most companies are likely to cover same-sex spouses if they already cover opposite-sex spouses, but the new SCOTUS ruling doesn't specifically require them to do so. He told NPR, "Employers get confused about this. They'll see that ruling and they'll start to think they have to offer coverage to same-sex spouses."

However, advocates for gay rights suggest that treating married couples differently based on gender would violate federal law prohibiting sex discrimination.

"You should be able to add your [same-sex] spouse to your health insurance," wrote a collaboration of civil rights groups in an online posting.

An opinion provided to the Wall Street Journal adds another layer to the question. Benefits lawyer Todd Solomon of McDermott Will & Emery says that in general, employers are now going to have to offer equal spousal benefits to gay and straight employees—if they use a separate insurance company to fund their benefits.

However, Solomon says that companies that are self-insured lack the same legal constraints. "There is technically no legal requirement that a self-insured company has to include a same-sex spouse," Solomon told the Wall Street Journal. However, any company that uses this tactic to deny benefits to same-sex spouses will be open to discrimination lawsuits.

As a result, Solomon suggests that self-insurance "is where we are going to see a lot of activity and a lot of litigation."

Will the ruling cause health coverage to grow?

The expectation is yes. As NPR notes, fewer than half of employers offering health insurance have previously made it available to unmarried same-sex partners, while almost all of them offer coverage for married spouses.

"By marrying partners with employer health plans, people in same-sex relationships are likely to get coverage in states that banned gay marriage until now, as well as in those that welcomed it," NPR writes.

Will increased demand cause more employers to drop spousal benefits?

That too is a likely scenario. As the Wall Street Journal suggests, many employers are already trending toward dropping spousal coverage, and this ruling could push more toward that path.

"Employers have been cutting spousal benefits to save money, either dropping spousal coverage or imposing surcharges on spouses who can obtain health insurance elsewhere… The Supreme Court ruling might spur some employers who were already inclined to cut spousal benefits to do so," Solomon, of McDermott Will & Emery, told the Journal.

Are domestic partner benefits still necessary?

"The answer for every employer will be different," J.D. Piro, senior vice president and national practice leader in the Aon Hewitt Health Law Group, told CBS news.

Many experts are expecting to see a drop-off in domestic partner benefits as companies add same-sex spousal benefits, as a way for companies to streamline and equalize their offerings. Such a move can be controversial, however, given that requiring formerly covered partners to marry for benefits "outs" employees who may not be protected by state anti-discrimination laws.

Among those companies that have already made such a move due to previous state same-sex marriage legalization are Verizon and Delta, CBS notes.

According to a poll conducted earlier this year by the Erisa Industry Committee, 22% of companies said they would drop domestic partner benefits in the event of a SCOTUS same-sex marriage ruling.

What now?

Companies will be aiming for fairness in their offerings, which can take several different forms.

As the Wall Street Journal suggests, those companies that offer domestic partnership benefits to both unmarried gay and straight couples are likely to continue doing so. However, those that offered these benefits only to gay couples are likely to phase them out now to avoid reverse discrimination lawsuits from straight couples who would also prefer to obtain benefits without the requirement of marriage.

Some companies, however, may be expected to take the route of maintaining domestic partnership benefits for gay employees to protect them from discrimination. As advocates for this route note, most states lack anti-discrimination laws, so employees forced to go public could lose their jobs or face other hurdles.

ACA plans are likely to see some movement as a result of some companies dropping domestic partnership or spousal benefits.

Under the Affordable Care Act, those who lose coverage from a partner's health plan qualify for special enrollment, notes Scott Belsky of online health insurance exchange GoHealth. As he told CBS, even before the Supreme Court ruling, some people were switching by choice from their domestic partner's insurance plan to an individual plan through Obamacare. "They are often getting tax credits or were finding plans that were cheaper than through" their partner's workplace, he said. "That will be accelerated by the Supreme Court ruling."

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