Gay Couples Law Blog : Atlanta Same Sex Family Law and Estate Planning Commentary : Gideon Alper : Gay Law, Domestic Partnerships

Before the Maryland attorney general said that the state would immediately begin recognizing out-of-state gay marriages, insurance companies doing business in Maryland already had to give coverage to domestic partners of employees in the state if their employers requested it.

The Maryland Insurance Administration is investigating whether it now needs to update regulations about insurance sales in its state:

If the attorney general's interpretation of state law stands, then gay couples married out of state will now be treated as spouses in Maryland. The insurance administration will likely add that insurance companies must provide insurance to same-sex spouses, just as it already requires providing to same-sex domestic partners.

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A friend of mine recalled that President Obama signed a order last year that had something to do with benefits for federal employees, and thought therefore that federal employees get all the benefits that straight married employees do. But that's not the case.

The presidential order from last year has let federal employees use their sick leave to take care of their domestic partners. But the order did nothing to financially benefit the partners of gay federal employees.

What Don't They Get?

• Health benefits
• Long-term care
• Family and medical leave
• Federal retirement benefits

These benefits make up a significant portion of an employee's compensation. So everything else being equal, gay employees in a domestic partnership will make less than employees with opposite sex spouses.

What's Changing?

Late last month President Obama reiterated his support for the Domestic Partnership Benefits and Obligations Act, which would give domestic partners the same employee benefits as married straight couples. However, it's unclear whether it will pass:

1. Democrats no longer have filibuster-proof control of the senate, and Republicans are more unified than usual.
2. It's an election year. With Democrats already projected to lose seats in both the Senate and House, they may not want to spend political capital on a law that only affects a small minority of Americans.
3. Public support for domsetic partnesrhip benefits is mixed. Last September, 54% of Americans said they support domestic partners getting the same federal benefits as married couples, but that number could have changed since then.
4. Obama made a big deal out of Don't Ask Don't Tell in his State of the Union address last month. That may be all he wants to do for gay rights this year.

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Gay couples in New Jersey can form civil unions, but can't get married. This month, the state legislature debated, but didn't vote on, full marriage equality for same sex couples.

Because couples in that state can already form civil unions with the full rights of married couples, some wonder what letting them get married would even do.

The answer is that, when it comes to benefits, employers treat couples called "marriages" differently than couples called "civil unions. Steven Goldstein, CEO of New Jersey gay rights organization Garden State Equality, explained:

About half of all employers in New Jersey are self-insured and therefore fall out of the purview of state law, including the state’s civil union law. No state may penalize companies that comply with federal laws.

As a result, many self-insured employers in the state don't provide benefits to same sex partners of employees. But if New Jersey legalized gay marriage, employers would be more likely to provide these benefits. Steven talked about what happened it Massachussets, as an example:

In Massachusetts . . . the overwhelming majority of employers have chosen not to invoke the federal loophole. Employers there understand and respect the power of the word “marriage.” Without the term “civil union” to hide behind, Massachusetts employers are loathe to discriminate against their gay employees. They would have to admit the reason for their discrimination.

This difference in insurance benefits is not the only way that civil unions are different than marriages in terms of rights. I've talked before about other problems, especially regarding out-of-state recognition difficulties.

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I've gotten a couple questions from people wondering about how the new Washington "everything but marriage" law that passed earlier this month will affect their insurance.

First, you won't need to get a new insurance policy. The law says how to interpret policies, not how policies have to be written. Insurance companies and the government must interpret the term "spouse" as applying equally to same sex domestic partners, even if the actual policy document says it means married opposite sex couples.

What if you're from another state? Fortunately, the law will cover domestic partners registered in other states. But probably not marriages. So domestic partners registered in Nevada, for example, will receive full benefits of the law, but couples married in Massachusetts will not. Just another reason why, when it comes to gay relationships, names are important.

People with their own insurance will benefit just as much as people who get their insurance from employers. For example, take two partners that are both self-employed, each with their own health insurance plans. Now, one person's insurance will extend benefits to his partner, saving thousands in premiums annually.

Finally, couples can feel safe that, if one person dies unexpectedly, her partner, and not her immediate family, will be recognized as the beneficiary of life insurance proceeds. Still, federal benefits such as social security are unaffected because the new law only concerns state rights.

To read more about the effect of the new law, take a look at the FAQ published by the Washington Office of the Insurance Commissioner.

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A new Washington D.C. "everything but marriage" law will give registered domestic partners all the rights that married couples have starting December 3rd.

As lot of the press and blogs on the new law have focused on how the law affects gay couples, I found interesting a guide that Stoel Rives, a law firm focusing on corporate law and business litigation, posted on how the domestic partnership law affects employers:

What Domestic Partnerships are Covered by The Law?

Two types of couples can register with the State under the new domestic partnership law: same sex couples and opposite sex couples where one person is over the age of 62. The law also protects domestic partners who are registered in other states.

What about Unregistered Domestic Partners?

The law does not provide any legal rights to domestic partners that have not registered with the State. However, nothing in the law prevents employers from providing benefits to unregistered domestic partners, and many continue to do so.

Does Our Employee Life or Health Insurance Policy Have to Cover Domestic Partners?

Yes, the Insurance Commissioner has interpreted the law to mean that insurance policies "must be administered in a manner that treats registered domestic partners the same as married spouses." Therefore, if any of the insurance policies you provide to your employees provide coverage or benefits to married spouses, they must also provide coverage to registered domestic partners.

Does Our Insurance Policy Have to be Amended?

The Insurance Commissioner is not requiring insurers to amend insurance policies, as long as they are interpreting "spouse" to include a registered domestic partner.

Does the Law Affect Pension and Retirement Plans?

Pension and retirement plans are governed by a federal law, ERISA, that generally preempts any state regulation of those plans.

Does the Law Impact Fully Self-Insured Health and Welfare Plans?

Although ERISA preempts state regulations related to employee benefit plans, states are allowed to regulate insurance. Private employers that purchase insurance are thus subject to the domestic partnership law because the state Insurance Commissioner appears to be treating the law as an insurance regulation. In addition, non-ERISA plans (governmental and church plans) are not subject to ERISA preemption and therefore are subject to state regulation in most instances. However, fully self-insured employee health and welfare benefit plans under ERISA are not generally subject to state law, and thus are likely exempt from domestic partnership regulations relating to employee benefit plans. Pending federal legislation may change this, so stay tuned.

How does the Law Impact Family Leaves?

Washington state statutory leaves, like family care leave, family and medical leave, spousal military leave, and domestic violence leave now cover registered domestic partners of employees on the same terms as spouses. Employers must modify their policies and postings regarding these leaves to include registered domestic partners.

What are the Tax Issues?

If an employee attempts to enroll his or her domestic partner for health coverage, the employee must state whether the domestic partner meets the requirements under federal tax law to be a dependent of the employee as a "qualifying relative." If the domestic partner does not meet those requirements, the value of the health coverage must be included in the employee's taxable income. Pending federal legislation may also change this rule.

What about COBRA?

The new law does not require employers to provide COBRA to registered domestic partners. However, neither state nor federal prohibit an employer from offering domestic partners a COBRA-like benefit voluntarily.

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The new health care bill passed by the U.S. House on Saturday would do more than help reduce the amount of people without health insurance. It also would reduce the taxes usually owed by gay couples.

Currently, employees must pay taxes on the health benefits given to their domestic partners or same sex spouses. That's because DOMA doesn't let the IRS recognize same sex relationships.

The new health care bill would stop that. Instead, benefits given to to domestic partners would receive the same tax treatment as benefits given to opposite sex spouses.

Robert Pear reported in the New York Times about the effect of current tax law on employee benefits given to domestic partners:

Joseph R. Solmonese, president of the Human Rights Campaign, a gay rights advocacy group, said federal tax law had not kept up with changes in the workplace.

“I meet people all the time who are gratified they work for companies that offer domestic partner benefits,” he said. “But they pass on the benefits because they cannot afford the taxes that go with the benefits.”

M. V. Lee Badgett, a labor economist at the University of Massachusetts, Amherst, said employees with domestic partner benefits paid $1,100 a year more in taxes, on average, than married employees with the same coverage.

If the bill becomes law, it will help reduce the higher lifetime costs of being a gay couple. Tara Bernard and Ron Lieber reported in the New York Times last month that differences in health insurance treatment by the government and employers are by far the biggest contributors to these higher costs.

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I got an email this morning that said the U.S. Office of Personal Management wants feedback on proposed changes to federal regulations that would include same sex domestic partners in the definition of family member for the purpose of using federal employment benefits.

Specifically, the changes would allow federal employees to use sick leave, funeral leave, voluntary leave transfers, the voluntary leave bank, and emergency leave transfers to care for their same sex partners. The current regulation is 5 C.F.R. § 630.

Read the full text of the proposed regulations [PDF] (which include the OPM's explanation behind them).

Then, you can send the OPM your comments through their special online form.

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Many attorneys think they don't need to keep up with laws affecting gay and lesbian rights if their practice doesn't involve those laws.

They're wrong. Here's why:

1. Gay clients like attorneys that understand their unique legal needs.

Gays are a picky demographic. They are more likely to buy services from firms that target them specifically or that have a good reputation in the gay community. Gay people respond better to attorneys who care about them by keeping up with laws that affect their rights.

Even if your practice area has nothing to do with same sex family law and estate planning, you will earn a gay client's loyalty by showing that you follow the laws that personally affect him.

2. Gay clients are less likely to reduce spending on legal services in a recession.

The recession has reduced demand for most services, but gay people have reduced spending less than straight people. Don't be surprised if gay clients want legal work more often than straight ones as the recession continues.

Keeping up with the laws affecting their rights makes them loyal, coming back to you instead of going to your competitors.

3. Metropolitan legal centers are more gay than the rest of the country.

Gays make up 1-4% of the population in most cities, but are more concentrated in the country's major legal centers:

San Francisco - 15.5%
Seattle, Boston, Atlanta - 13%
NY, LA, Chicago - 6%

Other metropolitan areas are similarly concentrated. Your clients are more likely to be gay if you practice in a big city.

4. Gay people are better conduits of social media.

Gay people read blogs more than straight people and are more likely to seek professional advice on the internet. They're also more likely to share information through Facebook and Twitter, and are almost twice as likely to be on LinkedIn.

Smart lawyers build reputations through blogging and social media. They'll get more bang for their buck if they get gay influencers to listen to them.

5. Laws affecting gay people impact various practice areas.

Court decisions on gay family rights frequently affect the rights of straight couples.

Tax decisions, especially regarding filing rules and wealth transfer taxes, affect the rights of all unmarried households, including brother-sister, roommates, parent-child, and pre-married ones.

With Democrats in charge, expect new laws to spur litigation in various practice areas:

• This past weekend, the President said he'd end the military's "Don't Ask, Don't Tell" policy. When he does, military litigation will pick up.
• If the Senate expands the federal hate crimes law to protects gays (the bill already passed the house), expect litigation that affects hate crimes generally.
• Employment attorneys should watch the Employment Non-Discrimination Act. Its passage would make courts address legal issues about a new protected class.
• A DOMA repeal would mean constitutional litigation on state vs. federal rights, as many states have their own versions of DOMA.

Attorneys don't have to be experts in laws affecting gay rights. But they'll benefit from spending a few minutes to follow them as they develop.

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Unfortunately in this economy, a lot of people are getting laid off. Yet if those people worked for a company with more than 20 employees, a federal law called COBRA lets the laid off employees keep their health benefits from their employers for a set amount of time.

In fact, if the health benefits covered the employee's spouses and children, COBRA lets them keep their benefits too.

But same sex spouses are out of luck. That's because DOMA prevents federal recognition of gay marriages or relationships. While gay employees can keep their health coverage under COBRA, their same sex spouses and domestic partners cannot.

It doesn't even matter if the employer covered their partners in the first place. Employers only have to continue coverage if (1) the state where the employee worked has its own state-level version of COBRA and (2) the state makes employers treat domestic partners as spouses when it comes to health benefits. The only state that qualifies? California.

Jeff Kunerth of the Orlando Sentinel reported how the lack of COBRA coverage for domestic partners affects gay couples:

For gay couples, the exclusion from COBRA means the uncovered partner must seek individual health insurance — which can be costly to find or impossible to get.

Matthew Everett started looking for insurance when his partner was laid off by Disney after 11 years. Under his partner's policy through Disney, the couple paid $128 per month for medical insurance. Everett expects to pay twice that, or more, if he can find an insurance policy.

It may be awhile before DOMA is repealed, so gay couples will have to sit out this recession without their partners getting COBRA coverage. Hopefully the next time the economy tanks, federal law will apply equally to same sex couples.

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The New York Times featured on Friday the results of a two month study on the extra lifetime costs of being gay.

The reporters, Tara Bernard and Ron Lieber, tested the finances of hypothetical same sex couples in the three highest gay population: Florida, New York, and California. Their test couples paid from $40,000 to $470,000 more in their lives for being unable to marry.

These financial costs have social consequences. Andrew Sullivan, senior editor of the Atlantic Magazine, explains:

The effect of these policies is to encourage gay people not to form stable, lasting relationships (relationships that have been shown to increase people's health, happiness and productiveness). It is to exact a communal price on anyone who actually does embrace the responsibility of marriage.

Still, the article notes that "nearly all the extra costs that gay couples face would be erased if the federal government legalized same-sex marriage." Because it's unlikely that the federal government will soon legalize gay marriage, it may seem that gay couples have to put up with these costs for awhile. 

But actually all the government has to do is get rid of Defense of Marriage Act. With DOMA gone, most of the costs of being gay would go too.

Take for example health insurance. When employers cover domestic partners, the extra costs from being gay stem from the tax consequences of domestic partner coverage. These tax consequences are because DOMA doesn't allow the IRS to recognize gay marriages.

In the Times article, health insurance posed the biggest cost unique to same sex couples. But the cost is only so large when one partner, not covered with his own job, must buy private insurance because his partner's job doesn't have domestic partnership coverage.

Or, look at the differences in social security benefits or IRA contribution limits. Gay couples pay more in these areas because of DOMA, not state laws. Other areas the article discusses--tax preparation, estate taxes (especially important for wealthy couples)--would similarly have little effect if DOMA were repealed.

While DOMA repeal may not happen soon, it will certainly come before the federal government even thinks about nationally legalizing gay marriage. As a result, gay couples may not have to put up with these extra costs for too long.

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[The Basics is a weekly feature that talks about the basics of same sex family law and estate planning. The goal is to help gay couples get general information on what the law is and how to accomplish their goals.]

A lot of people use domestic partnerships or "partners" as generic terms to describe same sex relationships. It's important to understand the different legal consequences among unregistered and registered domestic partnerships.

No Registration:

At the lowest level, simply calling yourselves "domestic partners" has no legal effect. To government agencies and employers, your self-imposed label means nothing.

Still, calling yourselves domestic partners even without registration might have social benefits. It could encourage your families and coworkers to take your relationship seriously.

City and County Registration:

Some local governments allow couples to register as domestic partnerships. These registrations are important for two reasons:

• They sometimes give small tax benefits, especially when it comes to property transfers.
• They can be required by employers before they give domestic partner employee benefits.

State Registration:

State registrations, if available, usually have the most legal effect out of all types of registration. These can provide anywhere from a handful of benefits to "everything but marriage."

Gay couples should make sure to understand exactly what state registration gives them. For example, the Las Vegas Review-Journal reports that Nevada just this week has allowed same sex couples to register as domestic partners, giving them almost all the benefits of married couples:

With the certificate, same- and opposite-sex couples will have the same rights and responsibilities as married couples. . . . The enabling law states that a Nevada domestic partnership is not a marriage. It also states that companies are not obligated to offer health care and other benefits to the domestic partners of their employees, although they are free to do so if they want.

Federal Registration:

As of now, there is no federal registration for domestic partners. In fact, because of the Defense of Marriage Act, the federal government does not recognize same sex relationships even if they are registered at the state level.

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This past weekend my employer held a BBQ luncheon and invited families of employees to attend. People often bring their spouses to business social functions like these. While those in a same sex relationship might naturally want to bring their partner to one of these functions, doing so could lead to discrimination by the employer.

Alexandra Levit, a nationally recognized business and workplace author and speaker,  wrote in in the Wall Street Journal about why gay employees could be discriminated against by coming out at the workplace:

Many experts agree that LGBT individuals are correct to have reservations about making their sexual orientation public. "There's no federal law that safeguards people from being fired because they are gay, and only 16 states have such protections," says Brian Mustanski, assistant professor of psychiatry at the University of Illinois at Chicago. "While the constant stress of monitoring themselves can take its toll, LGBT people have to balance the freedom to be themselves with their employability."

Currently, there's no federal law prohibiting an employer from discrimination against an employee for being gay. Therefore, someone who brings their same sex partner to a social function may end up being discriminated against because of their sexual orientation.

Some states have filled the gap in federal law with laws that prohibit discrimination based on sexual orientation. In other states, cities often enact their own laws on sexual orientation discrimination.

Still, until the federal government bans sexual orientation employment discrimination, gay couples should think twice before doing something at work that might cause employers to discriminate against them.

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Many people think that having a will is important for when you die. For gay couples, it’s important for when you’re living.

In addition to saying how property should be distributed upon death, a will allows someone in a same sex relationship to evidence their intention to be in a domestic partnership.

Employers and insurance companies often require evidence of a domestic partnership before extending benefits to someone’s same sex partner. Drafting a will with the partner as the main beneficiary is a perfect way to document the intention for the holder to care and provide for their same sex partner.

Furthermore, while married couples traveling are rarely questioned if their marriage is valid, gay couples should prepare for and expect for their partnership to be challenged whenever they travel out of state.

A recent Florida case provides an excellent example of the need for preparation. Although Janice Langbehn had documents, including her will, that evidenced her domestic partnership and power of attorney, a hospital denied her the right to visit her partner of 17 years who entered a coma while traveling in Florida. While the documents regrettably did not allow her to visit her partner, she can now sue the hospital for discrimination. If she had not carried those documents, she would have no legal redress.

David Shulman, a South Florida attorney focusing on wills, trusts and estates, and tax planning, notes the tendency for people to put off writing a will:

Too many people put off estate planning until sometime “later.” They think that they can wait because they don’t think that they will die tomorrow. Unfortunately, tragic, sudden deaths happen all of the time, and you owe it to your family to be prepared. You are not immortal. The time to engage in proper estate planning is now.

Gay couples have extra need to take David’s advice. Whether or not they will die tomorrow, they can benefit from having a will today.

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The recently introduced Domestic Partnership Benefits and Obligations Act of 2009 would provide the same benefits to same-sex domestic partners as offered to opposite-sex spouses. The bill would bring the federal government in line with private employers that are increasingly providing benefits for same-sex domestic partners.

Yet the bill has a problem. Its narrow definition of “domestic partner” means that legally married gay couples may be left out. The bill provides benefits only to someone who is “an adult unmarried person living with another adult unmarried person of the same sex.” Gay couples that choose to marry in one of the states allowing gay marriage would not be “domestic partners” as defined by the bill.

Perhaps the drafters of the bill were worried that employees married to an opposite-sex spouse might choose to label a friend or business partner as a “domestic partner” to take advantage of extended benefits. However, the bill already requires that the federal employee must not be “married to or domestic partners with anyone else.” The added protection from the definition of “domestic partner” is thus unnecessary and actually would prevent legally married gay couples from receiving the added benefits.

Because of the Defense of Marriage Act, federal employees in a legal gay marriage cannot share employee benefits with their spouses. Unless the new bill adopts a more broad definition of domestic partner, this inability will remain.

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