Access to Employer-Sponsored Health Coverage for Same-Sex Spouses: 2020 Update
Supreme Court Marriage Cases – Background
Prior to the Windsor and Obergefell decisions, same-sex couples faced limited options for obtaining spousal coverage through an employer and when they did, this benefit was treated differently under federal law from benefits received by heterosexually married couples. While some employers offered domestic partner benefits for same-sex partners1 and a growing number of states began to recognize same-sex marriage2, in 2012, less than half of all workers with health coverage had access to same-sex health benefits.3 In addition, because the federal government did not recognize same-sex marriages, where such benefits were offered, they were not considered tax exempt which meant that same-sex couples faced higher tax burdens compared to heterosexual counterparts.
In June 2013, in Windsor, the Supreme Court overturned a major portion of the Defense of Marriage Act (DOMA) which had, for federal purposes, defined marriage as between a man and a woman. The Windsor decision required federal recognition of same-sex marriages, even if a couple lived in a state that did not recognize same-sex marriage. As a result, employer-sponsored health benefits provided to legally married same-sex couples were now considered tax exempt.4 Windsor, however, did not require states to issue same-sex marriage licenses or recognize those performed elsewhere, leading to a patchwork of recognition across the U.S. and lack of access to legal same-sex marriage for many couples where they lived. In 2015, the Supreme Court’s ruling in Obergefell legalized same-sex marriage nationwide, requiring all states to recognize same-sex marriages and issue marriage licenses to same-sex couples. While neither decision required private employers to offer same-sex spousal coverage if they offered coverage to opposite-sex spouses5, it was expected that wider access to marriage would lead to greater access to coverage. In fact, one study found that the legalization of same-sex marriage in New York was associated with an increase in employer-sponsored insurance among same-sex couples.6 In addition, an increasing number of states (22 states and DC as of 2019) have protections in place that prohibit employers from discriminating against individuals based on sexual orientation, and presumably would require employers offering opposite-sex spousal coverage to extend that benefit to same-sex spouses.7 Furthermore, employers who refuse to offer same-sex spousal coverage while providing coverage to opposite-sex spouses could face legal challenges. Still, employers are not required to provide same-sex spousal coverage parity to their employees.