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What the Supreme Court’s DOMA ruling means for health insurance

Jun 27th, 2013


MARRIAGE EQUALITY RALLY in front of the US Supreme Court on First Street between Maryland Avenue and East Capitol Street, NE, Washington DC on Tuesday morning, 26 March 2013 by Elvert Barnes Protest Photography via Flickr

This week, people across the nation are celebrating the end of the Defense of Marriage Act (DOMA) following the Supreme Court’s decision to rule part of the law unconstitutional.

The section of the law that was in question defined marriage as between one man and one woman for all federal purposes. For married same sex couples, this essentially barred them from receiving any federal benefits, even if they lived in a state where gay marriage is legal.  Now though married gay couples are entitled to the same federal benefits as their heterosexual counterparts.

The Affordable Care Act and Gay Marriage?

So with the impending implementation of the Affordable Care Act, arguably the largest federal program to be implemented in at least a generation, how will the end of DOMA impact the legislation?

The major  health insurance change under the ACA for same sex married couples will be applying for tax credits. The health care reform legislation makes tax credits available to families and individuals with an income between 133 and 400 percent of the federal poverty line to help offset the cost of health insurance.

So the biggest decision will be whether to apply separately or jointly for their tax credit. Together a combined income may put the couple over the threshold of eligibility for a tax credit. But if they applied separately they might each qualify for one.

Other Insurance Benefits

For gay couples insuring their spouse through their employer’s health insurance program, Wednesday’s ruling will bring some financial benefits. Any money that a worker contributes towards their employer sponsored health insurance plan is considered non-taxable income. In the past if that employee decided to cover their same sex husband or wife under the same plan, the extra money paid in premiums to for them to join the plan would be taxed. But now after Wednesday’s ruling it appears that that will no longer be the case.

Several companies have programs in place that reimburse their employees for the extra expense of insuring their same sex spouses. So these companies could likely save a substantial amount in the future.

A final area where the DOMA ruling could have an impact is on the Family Medical Leave Act (FMLA). It’s a federal program where a person can take up to 12 weeks of unpaid leave in order to care for an immediate family member. Since it’s a federal program, same sex couples have previously been excluded from it. But that will be changing.

There is still one major question remaining though, how will the ruling on DOMA impact states who do not permit gay marriage? An answer to this will not be quick in coming. It’s possible that we’ll find ourselves right back at the Supreme Court again next year attempting to answer this very question.

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