Employee Benefits Alert
New Jersey’s Civil Union Law and Its Effect on Health Benefits
New Jersey recently passed legislation that provides the rights and responsibilities of marriage to same-sex couples that enter into civil unions, joining California, Vermont and a few other states that have adopted similar spousal parity requirements. The scope and applicability of spousal parity requirements vary from state to state, but all of these laws have at least two things in common: they are not always easy to interpret and they may collide in various ways with federal laws. Here we review the New Jersey law and the legal issues that benefits professionals will likely encounter in connection with it.
A Health Benefits Mandate
The first question to consider when deter- mining the impact of state spousal parity laws on employee health benefits is basic enough: do these laws regulate the health benefits that employers provide to their employees? The New Jersey civil union law does not address the issue directly. There is no doubt, however, that the New Jersey legislature intended that same-sex partners in a civil union be treated as spouses. The legislation stated as much, and it amended the New Jersey laws that regulate marriage so that those marriage laws now apply to civil unions.
The statute provides a non-exclusive list of “legal benefits, protections and responsibilities of spouses [that] shall apply to the parties of a civil union.”That list includes “laws relating to insurance, health and pension benefits.” Read literally, this provision would only require health coverage for civil union partners if
New Jersey had a law requiring health insurance to cover spouses. The New Jersey Department of Banking and Insurance had no doubts about whether the new law regulated health benefits, however. It has issued a bulletin confirming that, under the new law, all health plans that include dependent coverage must provide coverage to civil union partners.
Collision with Federal Laws
Two federal statutes – the Employee Retirement Income Security Act of 1974 (ERISA) and the Defense of Marriage Act of 1996 (DOMA) – may affect state requirements to treat domestic partners as spouses. ERISA may preempt the state law requirement, making it inapplicable to most employers’ health plans, while DOMA may create tax issues for employees who enroll their civil union partners in employer- sponsored health plans.
Willis North America • 08/07