Benefit Plans Impacted by Evolving World of Recognized Relationships
The landscape of recognized relationships continues to evolve. Illinois becomes the newest in the line of states sanctioning “alternative relationships” to traditional marriage between a man and a woman.
Illinois Civil Unions
On February 1, 2011, Illinois Governor Pat Quinn signed the Illinois Religious Freedom Protection and Civil Union Act (SB 1716, Public Act 96-1513) into law. The law establishes recognition of civil unions, defined as a legal relationship entered into between two individuals of either the same or opposite sex.
According to this Act, parties to a civil union are entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded to spouses under current Illinois law. Civil union applications, registration, certifications, and dissolution procedures will be processed through the Illinois Department of Public Health. The law takes effect on June 1, 2011.
Overview of State Relationship Recognition Laws
In addition to Illinois, New Jersey law provides for state-level spousal rights to same-sex couples via civil unions.
States that issue same-sex marriage licenses are Connecticut, District of Columbia, Iowa, Massachusetts, New Hampshire and Vermont.
States providing for state-level spousal rights through registered domestic partnerships include California, Nevada, Oregon, and Washington.
Colorado, Hawaii, Maine and Wisconsin have laws that provide limited spousal rights to same-sex couples within the state.
Maryland, New York and Rhode Island recognize same-sex marriages entered into in other jurisdictions.
Providing benefits to individuals in civil unions, same-sex marriages, or domestic partnerships, whether mandated or voluntary, raises many issues (see Benefit Issues and Same-sex Marriages, July, 2008, Benefit Beat). It is important for human resource departments, and for individuals managing employee benefit plans, to be aware of how changes to state laws defining recognized relationships impact a benefit program.
Generally, a self-funded health benefit plan subject to ERISA is not obligated to recognize relationships sanctioned by particular states; but, benefit plans certainly can. If a plan intends to recognize such relationships, it should be clearly documented in the plan documents and participant communications.
Insured plans in states that recognize alternative relationships may be obligated to provide spouse-like benefits to an employee’s civil union partner, domestic partner, or same-sex spouse.
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.
As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.