Earlier this month, a New York Federal District Court held that the exclusion of same-sex spouses from coverage under a health plan, even though coverage is provided to opposite-sex spouses, does not violate the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This is one of the first cases addressing equality of coverage for same-sex spouses under plans governed by ERISA since the U.S. Supreme Court held in U.S. v. Windsor that Section 3 of the Defense of Marriage Act was unconstitutional. (Click here or here or here for more information)
The Health Plan Exclusion
Roe attempted to enroll her same-sex spouse in the self-funded health plan sponsored by her employer. The plan provided spousal coverage, but did not define spouse. However, the plan contained a specific exclusion for same-sex spousal coverage: “Same sex spouses and domestic partners are NOT covered under this plan.”
The Employee’s Claims
- Section 510 of ERISA. The employee asserted that the employer violated Section 510 of ERISA by interfering with her right to cover her same-sex spouse under the plan. Section 510 of ERISA prohibits an employer from discriminating against a participant for exercising a right to which she is entitled under the provisions of a plan. However, the court said that since the employee was still employed and did not suffer any change or negative effect on her employment, there was no violation of Section 510 of ERISA.
- Breach of Fiduciary Duties. The employee argued that the employer violated its fiduciary duties under ERISA by enforcing the plan exclusion of same-sex spouses. Here, since the court found that the exclusion of same-sex spouses from coverage does not violate ERISA, it said that enforcing the plan exclusion could not be a breach of fiduciary duty.
- The court did not address whether ERISA preempts state laws which define spouse to include a same-sex spouse. Therefore, that question remains up in the air, particularly for insured plans.
- The court specifically noted that ERISA itself does not contain a prohibition on discrimination. Instead, ERISA’s legislative history supports the conclusion that other Federal laws, including the Equal Employment Opportunity Act, apply to the provisions of benefits to employees.
- If you haven’t already, address the issue of same-sex spouse treatment under your employment policies and benefit plans. The company should adopt an overall philosophy on this issue and apply it across its policies and plans, subject to settled legal rules that apply to particular plans. If any policy or plan does not provide equal treatment of same-sex spouses, closely monitor the legal challenges to similar arrangements and the guidance from the Internal Revenue Service and the Department of Labor.
The case was Roe v. Blue Cross Blue Shield, 2014 WL 1760343.