Maryland to End Benefits For Employees’ Domestic Partners (Posted on June 10, 2013 by )

Carol V. Calhoun, Counsel
Venable LLP
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Washington, DC 20001
Phone: (202) 344-4715
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Carol V. Calhoun

The discussion does not take into account the Supreme Court’s later decision in Obergefell v. Hodges, which struck down bans on same-sex marriage. An updated look at the pros and cons of continuing domestic partner benefits can be found at this link.

The Baltimore Sun is reporting that with same-sex marriage now available, Maryland state employees in same-sex relationships have been notified that they won’t be able to include domestic partners in their health insurance as of January 1, 2014. With 11 states, the District of Columbia, and three Native American tribes having legalized same-sex marriage, employers that have domestic-partner benefits are increasingly reexamining their policies in that area.

In many instances, domestic-partner policies were originally adopted based on a perception that employees with same-sex partners were disadvantaged relative to those with opposite-sex partners, due to the fact that same-sex marriage was not recognized under applicable state law. In most instances, the policies apply only to same-sex partners, although in some they are also available to unmarried opposite-sex partners. The question therefore becomes whether to eliminate these policies as same-sex marriage becomes available. Some factors to consider are set forth below.

Arguments for eliminating domestic-partner policies

Administrative complexity

A marriage is typically easy to document. Governmental agencies maintain copies of marriage certificates. A marriage can be ended only on divorce or death, either of which is also documented by a government agency. Thus, it is typically possible to determine with certainty whether an employee is or is not married. (Of course, this may be more of an issue in instances in which a common-law marriage is a possibility, but these represent a small fraction of marriages.)

By contrast, except in those states with registered domestic partnerships, the existence of a domestic partnership can be much harder to document. Typically, an employee must file an affidavit with the employer to establish a domestic partnership as a precondition for benefits. However, if there is no formal divorce-type filing, it can be difficult to determine whether or when a domestic partnership ends. Indeed, there could be instances in which an employee marries without ever formally ending a domestic partnership. (Bigamy laws would, of course, apply to an employee who remarried without ending a prior marriage, but those laws do not apply to domestic partnerships.)

Equal protection issues

One of the concerns in Maryland was that the state could face lawsuits from opposite-sex couples denied the opportunity to obtain benefits as domestic partners. After all, if same-sex couples can get benefits without marriage, why should opposite-sex couples be denied the same right?

Arguments against eliminating domestic-partner policies

Domestic-partner policies fulfilling other goals

In some instances, domestic-partner policies already cover opposite-sex as well as same-sex couples. For example, some employers have wanted to protect senior citizens reluctant to marry due to the effect on Social Security benefits. These reasons may continue to exist even after passage of marriage equality.

Inconsistent state laws

An employer in Maryland, for example, may have employees who are domiciled in Virginia. While Maryland recognizes same-sex marriage, Virginia does not. If the employer eliminates recognition of domestic partnerships, employees domiciled in Virginia may lose benefits.

Moreover, the determination of whether an opposite-sex couple is married is typically determined under the law of their state of domicile at the time they get married. And in the vast majority of instances, a state will recognize a marriage of an opposite-sex couple performed in another state, even if the marriage would be impermissible under the laws of the state of domicile. Thus, if an opposite-sex couple lives in Virginia but gets married in Maryland, it is generally safe to assume that the couple has a valid marriage.

The law applicable to same-sex couples is much less clear. Section 2 of the federal Defense of Marriage Act provides as follows:

No State, territory, or possession of the U.S., or Indian tribe, shall be required to give effect to any public act, record, or judicial proceeding of any other state, territory, possession, or tribe respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other state, territory, possession, or tribe, or a right or claim arising from such relationship.

For example, if a same-sex couple domiciled in Virginia gets married in Maryland, Virginia will not recognize the marriage. Should Maryland nevertheless recognize the marriage for benefits purposes?

Even more complicated questions arise due to the mobility of employees. Suppose that a same-sex couple is domiciled in Maryland, and gets married there, but then moves to Virginia. It is clear that Maryland would have recognized the couple as validly married before the move. Should the move be treated as the equivalent of a divorce for benefits purposes?

Fairness issues

Even in states that recognize same-sex marriage, the panoply of rights and obligations available to married same-sex couples is very different from those available to married opposite-sex couples. To begin with, same-sex marriage involves a much higher level of commitment. An opposite-sex couple knows that divorce will be available. However, divorce is governed by the couple’s state of domicile at the time of the divorce. Thus, for example, suppose that a couple gets married while living in Maryland, but then retires to Florida. At that point, they could never get a divorce unless at least one of them moved to a state that recognized same-sex marriage.

In addition, a marriage, unlike domestic partner benefits, is a matter of public record. For an opposite-sex couple, being known as married is unlikely to be an issue. However, for a same-sex couple, a marriage outs both of them as gay. It is unclear whether federal law provides any protections against discrimination based on sexual orientation. Many state laws do not prohibit discrimination on the basis of sexual orientation. Even if being known as gay is not an issue for the current employer, it may be an issue in housing, future job applications, a new supervisor at the current employer, etc. To the extent that the impetus for abolition of domestic partner benefits is fairness vis a vis opposite-sex couples, consideration needs to be given to the extent that requiring marriage as a condition for benefits in fact constitutes an equal requirement for same-sex and opposite-sex couples.

Timing Issues

For an employer that decides to abolish domestic partner benefits, another issue is timing. Should the change apply only to new employees, or to those who have not yet established domestic partnerships? Or should it apply even to those who already have domestic partner benefits?

To the extent that domestic partnership policies apply to retirement plans, governmental employers may be precluded by state Constitutional provisions from taking those benefits away from current employees, or at least from those current employees already in domestic partnerships.

Another issue to consider is what happens to those individuals already receiving benefits as domestic partners if such benefits end. Will they receive a COBRA-type ability to elect to continue benefits at their own expense? (COBRA itself, being a federal statute, typically does not apply to benefits to domestic partners.) How long will it take them to secure other coverage?

And for those employees who do choose to get married, how fast is it reasonable to expect them to do so? The average length of an engagement is 13-18 months. For a couple that has never been legally able to get married, is it reasonable to expect them to make the decision to marry, and plan the wedding, within a few months?

1. No federal law explicitly bans discrimination based on sexual orientation, but some have argued that sex discrimination laws may provide some protection if, for example, benefits are provided to the wife of a male employee but not to the wife of a female employee.
No federal law explicitly bans discrimination based on sexual orientation, but some have argued that sex discrimination laws may provide some protection if, for example, benefits are provided to the wife of a male employee but not to the wife of a female employee.