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Health insurance benefits for domestic partners

When the Supreme Court declared bans on same-sex marriages unconstitutional in June 2015, it took some of the scrutiny off domestic partnerships, which had previously been one of the primary ways that same-sex couples could share the same health insurance plan.

But domestic partnerships aren't going away anytime soon, as both unmarried same-sex and opposite-sex couples may still benefit from these arrangements when it comes to sharing health insurance plans and other benefits typically reserved for married couples.

Definition of a
domestic partner

If your employer offers health insurance coverage for domestic partners, you’ll probably first be asked to sign an affidavit that you and your partner:
  • Have lived together at least six months.
  • Are both age 18 or older.
  • Share a close personal relationship and are responsible for each other’s common welfare.
  • Are exclusive.
  • Are not married to anyone else.
  • Are not related by blood closer than would bar marriage in the state.
  • Share the same regular and permanent residence, with the current intent to continue doing so indefinitely.
  • Are jointly financially responsible for "basic living expenses," defined as the cost of basic food, shelter and any other expenses of a domestic partner because of the domestic partnership.
  • Were mentally competent to consent to the contract when the domestic partnership began.

Some employers impose waiting periods that vary from six months to a year before insurance coverage begins.

A brief history of domestic partnerships

The roots of domestic partner benefits go back to 1981, when San Francisco considered legislation to provide benefits to unmarried couples. "Domestic partners" soon became a legal term used by private and public employees to extend benefits to an employee’s unmarried partner of the same or opposite sex.

In 1982, The Village Voice in New York City became the first private employer to offer domestic partner benefits. Two years later, Berkeley, California, became the first municipal employer to do so. In May 1997, San Francisco began requiring all businesses with municipal contracts to offer same-sex benefits if they offer benefits for married couples.

Prior to the 2015 Supreme Court decision, domestic partner benefits commonly applied to all same-sex couples and unmarried opposite-sex couples. But because gay and lesbian couples can now get married nationwide, domestic partnerships today apply only to couples -- same sex or opposite sex -- who choose not to marry.

Insurance coverage for domestic partners

Benefits offered to domestic partners can be the same as those for married couples, such as long-term care insurance, group life insurance, bereavement, sick leave and relocation benefits. The most commonly offered benefits are health, dental and vision insurance.

Private employers are not required to offer health insurance to any employees, including domestic partners. Employers that choose to offer health benefits must follow federal law and state law, when applicable.

In the past, health insurers have contended that allowing domestic partner benefits would make them targets of fraud if customers tried to add relatives or friends onto their health plans. This is why many employers that offer such benefits require detailed information from domestic partners to determine eligibility (see sidebar).

Even if your state doesn't mandate that insurance benefits be extended to domestic partners, an employer can choose to include them in group benefits. Many major group health insurers provide insurance for domestic partners through employers.

Tax implications of domestic partnerships

The IRS has determined that employment-based health benefits for domestic partners or non-spouse cohabitants can be excluded from taxable income only if the recipients are legal spouses or legal dependents.

The federal and state governments do not tax benefits for spouses. But the federal government taxes benefits for domestic partners because it does not recognize those relationships. Also, in some instances, an employee who receives benefits for a domestic partner has to pay for the premium with after-tax dollars and then pay taxes again on the cost of the benefit because it counts as income.

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