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AIS's Health Business Daily
Featured Story June 26, 2009 Health Plan Enrollment of Same-Sex Partners Is Slowing Despite New Mandates Reprinted from HEALTH PLAN WEEK, the industry's leading source of business, financial and regulatory news of health plans, PPOs and POS plans. Early this month, New Hampshire became the sixth state to legalize gay marriage. But when the law takes effect in January, there are unlikely to be large numbers of same-sex spouses flocking to health plans, as the state already had a civil-union law that entitled same-sex couples to obtain health coverage. Moreover, in New Hampshire and nationwide, health plans that are self-insured by employers don't have to comply with state mandates, falling instead under federal law. And for now, the federal Defense of Marriage Act, which prohibits gay marriage, is still in effect. Health plans in states without mandates on domestic-partner (DP) coverage had been experiencing steady growth in same-sex spouses enrolling in their plans, as employers have increasingly expanded eligibility since social acceptance of gay relationships has grown. Yet this trend, too, seems to be changing, a result of the recession. Thirteen states mandate DP coverage, mostly for large employers and only for those that offer health insurance, which is never itself mandated for employers. Again, this does not apply to self-insured plans. Employers in states or jurisdictions (San Francisco has its own requirements, for example) without mandates could voluntarily make that option available, if their health insurers are willing. Health coverage for domestic partners varies by health plan, state and size of insured group. Randy Abbott, a senior consultant for Watson Wyatt Worldwide, an employer consulting firm, has been tracking employer and health plan trends in DP coverage for a decade. He sees little impact in health plan coverage from mandates, saying growth in DP health benefits has been mostly fueled by the steady increase in employer-sponsored coverage. Five years ago, about 40% of employers offered DP coverage, he tells HPW. Some employers, particularly smaller ones, might offer only individual coverage. If so, they would not be required to cover the spouse of any couple, even under a mandate. "Most employers had already thought [DP coverage] through and made their decision years ago," Abbott says. Among those FORTUNE 1000 companies with which he consults, 60% now cover same-sex couples and 30% cover unmarried opposite-sex couples living together. The move to voluntarily add this coverage "seems to have peaked" among large employers, he says. "It seems to be slowing, which is understandable," Abbott says. "I think there is a sense of the inevitability [of mandates], but in this economic climate those that have not adopted it are probably going to wait until it is legislated." (The move to cover unmarried opposite-sex couples has won fewer converts, Abbott says, because employers figure that these couples have the option of marrying and then obtaining coverage.) He estimates that 30% to 40% of employers with a few hundred to several thousand employees offer the DP coverage, and that rate is still growing. Health Plans Still See DP Growth Health plans sampled by HPW say they haven't seen a drop in the number of employers offering same-sex coverage for the first time. But they could within the next year, as employers begin to communicate such sentiments to carriers about their future plans. "We see the trend moving towards more and more health plans and employers offering domestic partner coverage," says Aetna Inc. spokesperson Matthew Wiggin. "Aetna offers DP coverage as an option to all of our larger and self-insured customers. In addition to the states that have mandates or other legislative measures regarding health insurance for DPs, we have also extended [such] coverage options to small-group customers in Texas, Oklahoma and Illinois." Wiggin adds that Aetna does not track the percentage of employers that have the DP coverage option and actually offer it. Health plans with fully insured products can automatically get a boost when a state approves gay marriage, if employees avail themselves of the new option. "In states where DP coverage is mandated or same-sex marriage laws are passed, both insurers and employers are required to offer coverage," Wiggin says. "If same-gender marriage becomes legal in a state during the plan year, and a same-gender couple gets married, the spouse is eligible for coverage immediately under a plan that covers spouses." Like Aetna, WellPoint, Inc.'s affiliated health plans "currently offer domestic partner coverage that varies from state to state and as plan options for employers to choose from and offer to their employees," says Melissa McHaffie, staff vice president of group contracts and compliance. Coverage is available, as required, in the mandated states where WellPoint plans operate, but it is also available by request to some large and small groups, including those in Colorado, Georgia, Indiana and Kentucky. Yet the coverage is not available even if requested by small groups in Ohio, Virginia or Wisconsin. Abbott says adding DP coverage increases an employer's costs by less than 1%, a far cry from the fears that were expressed a decade ago. Health plans agree, but they also do have greater administrative burdens, as they must be up to date with the changing DP state laws, and understand how the laws interact with one another. "If a policy is issued in a state where same-sex marriages are recognized, then the same-sex spouses are covered regardless of where they live — although they would still be required to provide a marriage certificate or other verification as required under the plan to be eligible," Wiggin explains. If an employee gets married in a state that allows same-sex marriage, but his or her home state of employment doesn't, the employer must decide what to do. "This depends on how the employer wants to treat the situation," McHaffie said. "Some plans define `spouse' as the person who is your legal spouse `in the state in which you live.' In this case, the marriage would be recognized." Should the plan limit a spouse to the legally recognized spouse in the home state of the employer, "then they would not be permitted to add the spouse unless the employer has purchased domestic partner coverage," she says. Some employers may require that health plans verify the domestic partnership through an affidavit of some sort, and to authenticate a marriage. Aetna itself doesn't establish rules for determining eligibility, Wiggin says. "The requirements of proof of partnership are in the hands of the employers who select DP coverage. In most instances, the requirements are very similar to those used to verify other dependents, proof of living together, commitment for at least one year, etc." Outlook on National Level Is Changing As more states take steps to legalize gay marriage, the momentum to do something of the same on the national level is growing. Secretary of State Hillary Clinton recently announced that she would expand some benefits to same-sex and opposite-sex domestic partners of State Dept. employees that were previously permitted only for married couples. These include use of medical facilities at posts abroad; medical evacuation from posts abroad; emergency travel for the partners to visit gravely ill or injured employees; inclusion as family members for emergency evacuation from posts abroad; and subsistence payments related to emergency evacuation from posts abroad. Yet she stopped short of pushing for health coverage, survivor benefits and other benefits. Those would take a change in law — and bills to that effect are pending in Congress. Federal
health plans could see a boost in enrollment if the Domestic Partner
Benefits and Obligations Act of 2009 (S. 1102) were to become law. The
bill, first proposed by Sen. Joe Lieberman (I-Conn.) in 2003, would
expand enrollment to include same-sex partners of federal employees.
The bill, also introduced in the House (H.R. 2517), has bipartisan support
— and the endorsement of the president.
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