Legalized marriage for same-sex couples continues to be a headline issue in states like New York, California and New Hampshire. However, in most states, domestic partnerships have little or no legal recognition. Domestic partners in all states need to get smart about their health insurance to make sure they are properly covered. The National Association of Insurance Commissioners (NAIC) provides these tips to help same-sex couples recognize their options:
1. Employer-provided benefits are on the rise. Thirty-four percent of large employers offer benefits to domestic partners, a 180 percent jump from just 12 percent in 2000.1 Before enrolling, check directly with your health insurer or human resources department to ensure your partner will be covered, and how your employer’s plan verifies eligibility for your partner (usually through formal documentation or evidence of joint bank accounts or property ownership or lease).
2. Add your partner to an individual policy. If you have an individual policy, check with your insurer to add a domestic partner to it as a family member. State requirements on this may vary.
3. Establish coverage for children. If you and your domestic partner have dependent children, they could be eligible for health care coverage as dependents. You may need to provide your employer or insurance company with legal documentation as proof of their dependency. In states that do not recognize both of you as parents, you may need to obtain additional documentation from a local court. Ask your legal advisor for details.
4. Learn tax implications. Typically, health benefits provided to domestic partners through employers aren’t exempt from federal tax liability, and state tax exemptions vary. The benefits could be recognized as income, and pre-tax dollars from flexible spending accounts or health savings accounts cannot be used to cover domestic partner benefits. The recipient may be exempt from these taxes if supported by his or her partner. To determine if you meet the criteria, see page 33 of IRS Publication 17 or contact your state insurance department. Go to www.naic.org/state_web_map.htm for a link to your state insurance department’s Web site.
6. Establish health care power of attorney. Domestic partners may want to consider creating a health care proxy or health care power of attorney document indicating you have designated your partner to make medical decisions for you if you are incapacitated and also to allow for hospital visitation. The document should be prepared by an attorney and kept in a safe, accessible place if you or your partner needs it. You can also place it on file with your physician to make the doctor aware of your wishes. Ask your legal advisor for details.
7. If your employer’s plan does not provide domestic partner coverage, then ask about including it at renewal. Research and experience with domestic partner benefits shows that domestic partner coverage does not add significant additional costs to employer plans (estimated 1% to 3% maximum increase). Many insurers will only offer domestic partner benefits as part of a benefit package upon request of the employer. If your plan does not include domestic partner benefits, ask your benefits manager to consider adding the coverage when the plan renews.
If you have questions about your policy, you can seek the help of the NAIC or your state insurance commissioner. Visit www.InsureUonline.org to find answers to your questions or to contact your state insurance department.
1. Mercer National Survey of Employer-Sponsored Health Plans (2008)
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City. The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more consumer
information, visit insureUonline.org.
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