Supreme Court decisions on DOMA rules will affect gays' insurance, pensions, and more

by LAS

The recent Supreme Court decisions on the Defense of Marriage Act (DOMA) solidifies gays' rights in the 12 states that recognize same-sex marriage, but still leaves unclear areas in the other states. However, in those 12 states, gay couples will see personal benefits in healthcare coverage, pensions, annuities, 401(k)'s, and might possibly extend to COBRA and the Family Medical Leave Act.

It is pretty clear now that gay couples who live in those 12 states, who have for example, a pension plan in effect, will be able to draw survivors annuities rights. If the plan provides for a maximum benefit of $1500 per month, then the survivor could apply for a benefit check of at least $750 per month. Also, if a surviving spouse had already been receiving such survivor benefit checks, and those were taxed by the federal government, the survivor can now apply for a refund of that tax now that the benefit is not taxable.

Persons affected by these changes will still have to wait while employers prepare updated materials and forms related to these medical and pensions plans. So please, be patient, because this is not going to happen overnight – and typically employers have until the end of the year after such a ruling to get things in order. Again, be patient, because the employers have to make sure all the i's are dotted and t's crossed, and there are a lot of legal and tax implications to be thought through.

Still unclear are all the implications and applications when the couple was married in a state that recognizes gay marriage but no longer reside in a state that recognizes gay marriage. That could easily happen if a couple worked in New York, which does, and retires to Florida, which does not. Companies are still unclear on how a change in residence would affect coverage. Another area that needs clarification is in the case of companies that operate in several states – are they only bound by the laws in states where they have offices, or only the state where they are incorporated? In any case, it will be a tangled mess to prepare paperwork for employees in the several states where they have employees.

It is always a tangled mess that the courts weave, and employers and insurance companies will need some time to untangle it. 

set this one for 9 pm Sat., July 6

by LAS

California recently crowed that premiums for the new insurance exchange plans would be lower than current plans offered. However, that is because some of the most expensive doctors and hospitals were cut out of the provider networks covered by the exchange plans. Also, copays and other out-of-pocket charges will cost more for the patients.

With less than 90 days now remaining until the Oct. 1 target date for getting the states' exchanges up and running, it seems likely that even if they do get activated, consumers will likely find glitchy websites and application processes, and rather high premiums.

Still, coverage will be a relief for people who previously could not get a healthcare plan at any price, or at a prohibitive price.