By Jennifer A. Brandt & Ivy E. Silver
The issue of living arrangements and marriage— from civil unions to domestic partnerships to common law marriage—promises to grab headlines in the months ahead. While states and the federal government continue to debate the issues, a Pennsylvania Commonwealth Court ruling last September added that state to the list of those states prohibiting all new common law marriages. Since state definitions of marriage are crucial when determining benefit eligibility for employees and their dependents, it is important for benefits and risk managers to understand the ramifications of these evolving laws.
Currently, just nine states—Alabama, Colorado, Kansas, Rhode Island, South Carolina, Iowa, Montana, Oklahoma, Texas—and the District of Columbia continue to allow common law marriages. Couples previously "married" in a state that permitted common law marriages maintain their marital status nationwide.
The requirements for demonstrating common law marriage vary from one state to the next. Domestic partnerships have become popular in cases where no common law marriage exists and where people
cannot be legally married—such as samesex couples. However, a domestic partnership is not a legally accepted relationship in most states. Rather, it is an agreement that a couple demonstrates by verifying that they share property ownership, bank accounts, and other assets.
Steps for Risk Managers to Consider
As our federal and state governments continue to define the concept of marriage, benefit and risk managers should consider taking the following steps.
- Audit all insurance policies to identify the impact of changing state laws on current employees.
- Identify the benefit options and alternatives available to individuals who either choose not to become legally married or are not able to do so under current law; determine if your company is interested in offering domestic partnership benefits. If you want to offer domestic partner benefits, talk with your insurance professional to determine if this eligibility provision can be added to the contractual provisions of your benefit plan. Keep in mind that not all insurance contracts or states allow for the domestic partner provision without a legal dependent designation; even when they do, these benefits are not included within reimbursement accounts. Employees lose the tax-deductible advantage for the dependent portion of the cost that they had through common law marriage when they switch to domestic partner status under an S. 125 plan.
- Educate your employees about your benefit programs and specifically what benefits are available for dependents and/or domestic partners. These may include medical coverage, voluntary benefit options and long-term care benefits, spousal life insurance, medical expense reimbursement plans, dependent care plans, pension options and beneficiary obligations, and even Social Security benefits.
- Communicate changes to employees. Technically, there is no implied requirement because rulings only affect future relationships, not existing common law marriages. How much and what type of communication is appropriate should be determined by the employer group and is more a function of the organization's culture, rather than a necessity.
- Recognize that carriers must accept previously designated common law marriages. Generally, insurers may require common law marriage certification to prove that a union occurred prior to the change in the state's law.
One thing is certain, however. The definition of marriage is rapidly changing and developing in our society. States, such as Pennsylvania and New Jersey, are changing existing laws and others, such as Massachusetts, are developing new ones. Thus, employers need to be mindful of these shifting patterns and establish new policies that will not only protect themselves, but also offer employees a broad understanding of their options.
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Jennifer A. Brandt, a member of the family law department with Cozen O'Connor (www.cozen.com), in Philadelphia. Ivy E. Silver is the president and a founder of The Commonwealth Consulting Group, Inc. (www.tccgroup.com), in Jenkintown, Pa.
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