Under the Affordable Care Act, health insurance issuers in the individual and group markets are generally required to guarantee insurance coverage to every employer and individual that applies. Beginning in 2015, this guarantee will extend to same-sex spouses.
On March 14, 2014, the Department of Health & Human Services (HHS) announced that insurance companies offering non-grandfathered health insurance plans can no longer refuse to offer health insurance coverage to same-sex spouses. In taking this position, the HHS relied on federal regulations prohibiting health insurance issuers from employing marketing practices or benefit designs that discriminate on the basis of, among other things, an individual’s sexual orientation.
According to HHS, an issuer is considered to employ discriminatory marketing practices or benefit designs if the issuer:
- Offers health insurance coverage to a spouse in an opposite-sex marriage; and
- Does not offer the same coverage to a spouse in a same-sex marriage that was validly consummated in a jurisdiction where the law authorizes same-sex marriages.
Importantly, the prohibition against discriminating against same-sex spouses applies regardless of the jurisdiction in which the insurance policy is offered, sold, issued, renewed, in effect, or operated, and regardless of where the policyholder resides. This means that insurance companies must offer coverage to legally married same-sex spouses even if they live in a state that does not allow same-sex marriages.
HHS noted that its position regarding coverage for same-sex spouses does not require a group health plan to provide coverage that is inconsistent with the terms of eligibility for coverage under the plan, or that otherwise interferes with the ability of a plan sponsor to define a dependent spouse for purposes of eligibility for coverage under the plan. It only prohibits an issuer from refusing to offer the option to cover same-sex spouses on the same terms and conditions as opposite sex-spouses.
According to HHS, it is only clarifying the current regulations’ prohibition against discrimination based on sexual orientation in a manner that is consistent with the policy of ensuring that all individuals have access to health coverage. However, since “some issuers may not have understood the prohibition,” HHS is not requiring immediate compliance. Rather, health insurance issuers must implement changes for plans or policies years beginning on or after January 1, 2015.
Though fewer than half the states allow same-sex marriages, employers in every state need to be aware of health insurance requirements for same-sex spouses. Beginning in 2015, the focus will need to be on the legality of the marriage rather than the gender of the spouses.
Recent developments with the Affordable Care Act suggest that change rather than stability should be expected. At Setnor Byer Insurance & Risk, we are committed to guiding you through the changes coming in 2014 and beyond. Check back with us periodically for future informational updates about the Affordable Care Act.
If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.
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