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Thursday, September 8, 2011

Last week we looked at the implications of New York’s Marriage Equality Act (“Act”) upon the tax treatment of employer-provided health care benefits for same-sex married couples in New York. Today we’ll consider how the Act affects the administration of family and medical leave, HIPAA special enrollment rights and health care continuation coverage under COBRA and New York’s “mini-COBRA” law.

Family and Medical Leave

Provided the employer is subject to the federal Family and Medical Leave Act (“FMLA”), FMLA allows employees unpaid job-protected leave to care for a seriously ill “spouse,” among other FMLA-qualifying reasons. A 1998 Department of Labor advisory opinion sets forth the interpretation that only the federal definition of marriage and spouse under the Defense of Marriage Act (“DOMA”) may be recognized for FMLA leave purposes, meaning that employers are not required to permit a New York employee to take FMLA leave to care for his or her seriously ill same-sex spouse. New York does not have a comprehensive family and medical leave act that would require this type of leave under State law.* Employers that choose to offer it should be aware that, even if an employee takes 12 weeks of leave to care for a seriously ill same-sex spouse, that leave does not count against FMLA entitlement, meaning the employee is still statutorily entitled to take an additional 12 weeks of FMLA leave for any other FMLA purpose (e.g., caring for a seriously ill son or daughter).

 *A New York employee is permitted under State law to take ten days unpaid leave if his or her spouse is a member of the military, is on leave from the military and has been deployed during a time of military conflict. With the passage of the Act, “spouse” for this purpose now includes a same-sex spouse.

 HIPAA Special Enrollment Upon Marriage to Same-Sex Spouse

An employer-sponsored group health plan that offers coverage to employees’ spouses is required to offer a special enrollment opportunity when an employee acquires a new spouse. Under HIPAA, “spouse” is defined according to federal law, and DOMA excludes same-sex spouses, so special enrollment would still not be required under HIPAA by virtue of an employee’s same-sex marriage.* Employers can always offer greater special enrollment rights than HIPAA requires. However, employers with self-funded plans should check with their stop-loss carriers before doing so in order to ensure coverage.

 Employers with insured plans that cover New York employees and offer spousal coverage may also wish to consult with insurers to determine whether same-sex spouses are eligible under the policy. Because the Act provides that same-sex marriage must be treated the same as an opposite-sex marriage for all purposes under New York law, it would appear that employer-sponsored insured health plans that are governed by New York insurance law are required to cover same-sex spouses if spousal coverage is offered under the policy. Sponsors of these insured plans would not be required to offer HIPAA special enrollment rights to same-sex spouses when the employee gets married, but insurance policies may provide for such special enrollment rights pursuant to State insurance law.

 * It may be possible for a same-sex spouse to exercise a HIPAA special enrollment right if he or she loses other group health coverage (another type of special enrollment event besides marriage) and the plan either covers same-sex spouses or the plan’s definition of “dependent” is sufficiently broad to include same-sex spouses.

 COBRA

 Under federal COBRA, a same-sex spouse is not a “qualified beneficiary” who can elect health care continuation coverage when he or she experiences what would otherwise be a COBRA-qualifying event. Again, employers who self-fund group health plans that offer coverage for same-sex spouses can offer continuation coverage that is not required by COBRA, but may wish to check with stop-loss carriers before doing so in order to ensure coverage.

 In addition, New York is among several States that have “mini-COBRA” laws that apply to insured plans. Employer-sponsored group health insurance policies governed by New York insurance law presumably are required to treat same-sex spouses the same as opposite-sex spouses for purposes of New York health care continuation coverage rights. Employers may choose to check with their insurers to ensure compliance.

 

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