In 2015 the U.S. Supreme Court ruled to overturn the Defense of Marriage Act, legalizing same-sex couples to get married in all 50 states. And while the percentage of employers offering benefits to same-sex spouses is on the rise since 2014, according to a report issued from the International Foundation of Employee Benefit Plans, the number of employers offering benefits to same-sex civil union and domestic partners has dramatically decreased since the Supreme Court’s ruling. Of the 538 companies surveyed only 31% are currently providing benefits to same-sex, civil union partners – down a whopping 20% since 2014.
The results of IFEBP’s study shouldn’t come as too much of a surprise. Even less surprising is that the majority of companies eliminating domestic partnership benefits have typically been small to mid-size organizations. Whereas large companies (10,000+ employees) are more equipped to handle the administrative burden, for smaller companies, eliminating domestic partner benefits means eradicating the complications and administrative nuisances that come with offering such benefit coverage options. Now that everyone can legal marry, dropping domestic partner benefits in favor of spousal coverage benefits became a clear decision for many companies looking to simplify their benefit packages and reduce administration and overhead costs.
“In the past, some employers only offered same-sex domestic partner benefits because those couples couldn’t legally marry. Now with the Supreme Court’s decision, these employers may decide to drop domestic partner benefits,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefit Plans. “Domestic partner benefits can be complex to manage, and by offering consistent [benefit] coverage for opposite-sex and same-sex couples, employers are able to ease some of the administrative burden.”
The other aspect of the Supreme Court’s ruling that could impact COBRA administration are the COBRA Life Events. Aside from Open Enrollment, the only other times a COBRA participant can add a dependent to their coverage is either the birth of a child or getting married and adding their new spouse. With the Federal legalization of same-sex marriages, companies could see an uptick of marriage and divorce COBRA Life Events. And while the impact of the Court’s decision might be minimal on COBRA administration overall, for those companies that decide to terminate domestic partner benefits during their plan renewals, having an experienced COBRA vendor to assist with the transition could prove to be a significant asset.
Resources: https://www.ifebp.org/bookstore/doma2014/Pages/default.aspx | www.usdol.gov
Grant Ameel | CobraHelp Content Developer