I work for a private employer which offers health benefits to spouses of employees. Does my employer have to allow me to cover my spouse under the health plan?
Generally, no. Employee benefits of private employers are governed by federal law, which does not recognize same-sex marriage.
Under what circumstances might my employer allow me to cover my spouse under the health plan?
Any rights to spousal health coverage under your employer’s plan would be dependent on your employer having entered into a contract to provide such coverage. Typical ways in which this might occur include:
• Inclusion of same-sex spouses under the terms of the health plan itself.
• A union agreement calling for coverage of same-sex spouses.
If my employer covers same-sex spouses of employees under its health plan, what are the tax consequences to me?
It depends on whether your spouse is your “dependent.” To be a dependent, your spouse must live with you, receive over one-half of his or her financial support from you, and meet certain other tests.
If your spouse is not a dependent, any employer-paid premiums for health insurance are treated as income to you for tax purposes. Any employee-paid premiums for your spouse’s health insurance are made on an after-tax basis, even if premiums for your own coverage are made on a pretax basis. This also means that as a practical matter, your spouse cannot participate in a flexible spending account for health benefits, as such an account would not generate the tax benefits that are the reason for such an account.
If your spouse is a dependent, the tax consequences of covering your spouse are the same as if the your spouse were of the opposite sex. However, it can be expected that the employer will require documentation of the dependency.
What rights does my spouse have if he or she loses coverage under my health plan?
Federal law provides for an opposite-sex spouse to have the right to continue health insurance at his or her own expense for 18-36 months if he or she loses coverage due to certain events, e.g., job loss by the employee or the couple’s divorce. While Maryland has its own continuation law, it allows for only 12 months of continuation.
Is my employer required to provide my spouse with rights under my pension, 401(k), or other retirement plan?
No. Federal law requires that a spouse be provided with survivor rights under most retirement plans. However, because federal law does not recognize a same-sex spouse, these rights are not automatically available to your same-sex spouse.
Can I name my same-sex spouse as beneficiary under my retirement plan?
Generally, yes. While a few plans provide a survivor benefit only if an employee is married, the more modern trend is to allow an unmarried employee, or an employee with a same-sex spouse, to name anyone as the beneficiary.
If I name my same-sex spouse as the beneficiary of my retirement plan, will he or she have the same rights as a spouse?
Typically, no. A married employee normally cannot change the beneficiary to anyone other than the spouse without the spouse’s written consent. However, because a same-sex spouse is not recognized as a spouse, you could name your spouse as your beneficiary initially, but still change your beneficiary at a later date. And your spouse would have no right to know about, much less veto, the change.
If I name my same-sex spouse as the beneficiary of my retirement plan, what are the tax consequences?
Taxes on a distribution can be deferred by rolling the money over to another plan. Same-sex spouses are more limited than opposite-sex spouses both in the types of plans to which a rollover can be made and in the time at which distributions must be taken.