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Legal Issues Impacting Your Business
Client Update: Same Sex Marriage & Group Health Plan
The following is an update on recent events in Iowa that will impact your employer-sponsored health plan. If you have any questions regarding the following information, please contact Susan Freed via email or at (515) 246-7891.
SAME SEX MARRIAGE & YOUR GROUP HEALTH PLAN
Beginning today most employer-sponsored group health plans will likely need to cover same-sex spouses. If your group health plan currently defines "spouse" by deferring to a marriage recognized by the State of Iowa, this will extend coverage to same-sex spouses. Attempting to define "spouse" to exclude same-sex couples will likely violate the Iowa Civil Rights Act and is not recommended. If your health plan is self-insured, ERISA may preempt the applicability of the Iowa Supreme Court's decision to your health plan and you may be able to limit coverage to heterosexual married couples. We recommend, however, that before self-insured health plans implement such a policy, they discuss this issue with their attorney. If you have any questions regarding your plan's definition of "spouse", you should contact your insurance carrier or your benefits advisor.
Although your health plan will likely extend benefits to same-sex spouses, the federal definition of "spouse" for federal tax purposes remains unchanged and includes only heterosexual married couples. Therefore, your employees can not use pre-tax dollars to pay for a same-sex spouse's coverage under your plan. Additionally, to the extent the employer subsidizes a portion of the premium attributable to the same-sex spouse, that portion will be subject to federal income tax. Furthermore, same-sex spouses are not entitled to federal COBRA (although you may extend it to them) and medical expenses attributable to the same-sex spouse can not be reimbursed through a health flexible spending account or a health savings account.
NEW STATE HEALTH MANDATES
In the last few weeks of the legislative session, the Iowa Legislature passed a total of 4 mandates for health plans issued in the State of Iowa. These include:
(1) Prosthetic Coverage: Requiring group and individual policies to cover medically necessary prosthetic devices prescribed by a physician that at a minimum equals the coverage provided by Medicare.
(2) Diabetes Self-Management: Requiring group and individual policies to cover costs associated with equipment, supplies and self-management training & education for the treatment of diabetes. Items covered include blood glucose meter and strips, and training that includes at least 10 hours of initial outpatient diabetes training within a 12 month period with up to two hours of follow-up training for each subsequent year.
(3) Cancer Treatment: Requiring group and individual policies to provide the same coverage for orally administered anti-cancer medications as intraveneously or injected cancer medications.
(4) Psychiatric Mental Institution for Children: Requiring group policies to cover an admission of a child with a biologically based mental illness to a psychiatric medical institution for children as an inpatient benefit.
