The Supreme Court of the United States (SCOTUS) recently issued separate rulings affecting the health insurance and employee benefits sectors. The “King v. Burwell” decision assures that health insurance subsidies will continue to be provided to eligible individuals in all states, even those that don’t have a “state based health insurance exchange”. And the “Obergefell v. Hodges” ruling held that state laws (in 14 states) banning same sex marriages were unconstitutional. While the former ruling affecting ACA subsidies will primarily assure continuation of previously implemented aspects of the law, and prevent what could have been serious disruption, chaos, and premium rate impact; the later ruling will require examination of, and changes to many policies and procedures. Here’s a brief overview of the more pertinent areas deserving attention.
While there are still some pending questions relative to self-insured plans, the SCOTUS ruling now grants same sex spouses all of the same privileges heretofore extended exclusively to spouses of the opposite sex on all fully insured benefit plans…in all states. Whether the impact will be retroactive or not is still not clear at this time. Items affected include:
As previously stated, questions still persist as to the impact on private sector self-insured health and welfare plans because the SCOTUS ruling (nor ERISA for that matter) does not directly compel such plans to cover same-sex spouses. Employers are encouraged to consult with their legal advisers to examine the risk of offering different benefits to opposite versus same-sex couples, in light of the Obergefell SCOTUS ruling.
Employers previously modifying benefit eligibility to allow so called domestic partners on their plans are encouraged to review whether or not such a practice will be necessary going forward, in light of the SCOTUS decision. The primary reason why employers chose to extend benefit eligibility to domestic partners in the past was to accommodate same-sex unions. Domestic partner eligibility presents its own challenges, as states tend to vary their definition of domestic partners.
Insurance companies, third party administrators, employers, and associated vendors will be updating plan documents, policies and procedures in the near future, in light of the ruling. Since there are still some remaining questions relative to key aspects such as effective date of changes, impact on self-insured plans, etc., in the immediate term employers should await further guidance and direction. The aforementioned list of impacted items is a good place to begin evaluating future impact and necessary changes that may need to be made.
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