Column 104 - Big SCOTUS news in the insurance world

Column 104 7-5-2015  Big SCOTUS news in the insurance world

Last week was a big week for the employee benefits and individual insurance world, as the Supreme Court of the United States (SCOTUS) issue rulings on same sex marriage and subsidies under the Affordable Care Act (ACA also known as Obamacare).

First, for employers that are fully insured the fact that same sex partners are able to marry also gives them the right to add their spouse to the benefit plan, (assuming spouses are eligible for plan benefits). 

Self-insured employers are not required to comply with state and local laws of this type because ERISA (Employee Retirement Income Security Act) provides an exemption.  Self-insured employers may have more options about whether to include same sex spouses in their plans.  However there is a caution for those that choose not to offer this coverage.  It's possible they could be at risk for more sex-discrimination challenges to the plan.

The Domestic Partner Rights and Responsibilities Act was passed in California in 2003 and became fully operational in 2005.  This was a way to address the fact that same sex partners were not allowed to marry.

It's interesting to note that employer insurance contract applications allow the employer to choose between the "narrow" definition, which is same sex partners only, and the broader definition, which includes opposite sex partners.

The State of CA form NP/SF DP-1 provides instructions on registering for domestic partners and includes the following criteria:

 

1)     Neither person is married to someone else or is a member of another domestic partnership with someone else that has not been terminated, dissolved, or adjudged a nullity.

 

2) The two persons are not related by blood in a way that would prevent them from being married to each other in this state.

 

3) Both persons are at least 18 years of age, OR if one or both persons are under 18 years of age, a certified copy of the court order(s) granting permission to the underage person. .

 

4) Both persons are members of the same sex, OR one or both of the persons is over 62 years of age and one or both meet the eligibility criteria under Title II of the Social Security Act .....for aged individuals.

 

5) Both persons are capable of consenting to the domestic partnership.

 

6) Both persons consent to the jurisdiction of the Superior Courts of California for the purpose of a proceeding to obtain a judgment of dissolution or nullity of the domestic partnership or for legal separation of partners in the domestic partnership, or for any other proceeding related to the partners' rights and obligations, even if one or both partners ceases to be a resident of, or to maintain a domicile in, this state.

 

It's interesting to note that insurers such a Blue Shield of CA simply asks that the insureds sign an affidavit that includes only items 1, 2, 3, and the following: :

*I share the same principal residence with my partner and we have an intimate and committed relationship

of mutual caring.

*neither of us has had a different domestic partner within the last six months (this condition does not apply if you had a partner who died).

So the next question will be whether the state of CA will continue to maintain the requirement for same sex domestic partners to be eligible for benefits. I am not an attorney, so clearly I don't know all the reasons for maintaining domestic partnership over marriage.  Since CA is a community property states, perhaps this would give domestic partners more autonomy over their personal assets? 

From a benefits standpoint, it certainly seems much less complicated to simply offer benefits only to spouses.  I can't help but chuckle at my own comment about simplifying the rules.  California is one place where rules are typically far from simple!

Finally, the challenge to the ACA subsidies found in favor of the administration. So the subsidies will stay in effect regardless of whether or not individual insurance is purchased on a state or federal exchange. Regardless of our politics on the issue, I hope this is the last challenge.

The Congressional Research Service said it costs $24 million to run the House for a week. The numbers translate to approximately $1.45 million per vote to repeal the Affordable Care Act in the House of Representatives.  I read that there were 54 votes. I can't help but think we could spend $78 million in a more productive manner.  It has been said that the definition of madness is doing the same thing over and over again, expecting different results.