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Can Self-Insured Health Plans Still Exclude Same-Sex Spouses? 



QUESTION: Our company is implementing a new self-insured group health plan for employees, spouses, and dependent children, and the plan document excludes same-sex spouses from the definition of spouse. Is this type of exclusion still permitted?

ANSWER: According to the Equal Employment Opportunity Commission (EEOC) and an increasing number of courts, the answer is “no.” The U.S. Supreme Court’s ruling on same-sex marriage did not in and of itself change plan eligibility requirements, and ERISA plans generally remain free to define whether same-sex spouses are eligible for benefits provided to “spouses.” However, caution is warranted because of the potential application of Title VII, the federal employment discrimination law. (State nondiscrimination laws would generally be inapplicable to self-insured plans because of ERISA preemption.)

Title VII prohibits most employers with 15 or more employees from discriminating in the compensation, terms, conditions, or privileges of employment because of an individual’s race, color, religion, sex, or national origin. The EEOC has stated that benefits under employer-sponsored group health plans must be provided without regard to the prohibited factors. Historically, Title VII has not been interpreted to require domestic partner or same-sex spousal benefits. In recent years, however, courts and the EEOC have begun to interpret Title VII as applying to claims of sexual orientation discrimination (as a type of sex discrimination), so employers should use caution when considering plan provisions that treat employees differently based on their sex or sexual orientation. EEOC guidance listing examples of unlawful sex discrimination specifically includes denying spousal health benefits to a female employee whose legal spouse is a woman, while providing spousal health benefits to a male employee whose legal spouse is a woman. At least one court has agreed, ruling that an employee who was denied spousal health benefits for his same-sex spouse stated a plausible claim under Title VII—the case later settled.

As lawsuits have increased in recent years, federal appeals courts have reached conflicting conclusions regarding the scope of Title VII’s protections, and the issue may eventually need to be resolved by the Supreme Court. In the meantime, your company may wish to lower its litigation exposure by amending the plan’s definition of spouse to include all spouses.

For more information, see EBIA’s Employee Benefits for Domestic Partners at Section IV.G (“Impact of Title VII on Plan Design”) and EBIA’s Group Health Plan Mandates manual at Sections XXI.C (“EEOC’s Position on Title VII and Health Coverage”) and XXI.D (“Court Decisions Applying Title VII to Health Coverage”). See also EBIA’s Cafeteria Plans manual at Section XI.B (“Who Is a Spouse for Purposes of Obtaining Tax-Free Health Coverage?”), EBIA’s ERISA Compliance manual at Section IX.J (“Spouse and Dependent Child Eligibility”), and EBIA’s Self-Insured Health Plans manual at Section XIV.E (“Beneficiary Eligibility”).

Contributing Editors: EBIA Staff.

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