Benefits Eligibility
Several States Make Moves on Issue of Gay Marriage

Recent actions by several states regarding same-sex marriage and domestic partnerships likely will add to the compliance challenges for human resource departments, experts say.

Earlier this month, New Hampshire became the sixth state to legalize gay marriage, effective on Jan. 1, 2010. The measure, passed by the state’s legislature and signed by Gov. John Lynch, is expected to increase the number of dependents and beneficiaries who will be eligible for employer-sponsored benefits.

New Hampshire joins Iowa, Massachusetts, Connecticut, Vermont and Maine as states that have legalized gay marriage.

Washington State recently expanded its laws governing domestic partnerships but stopped short of legalizing marriage. However, the legislation passed in late May essentially puts domestic partners on the same level as legal marriages in terms of rights and benefits.

A ruling in California, on the other hand, has muddled the compliance landscape there by overturning the legalization of gay marriage. In late May, the state’s Supreme Court upheld Proposition 8, a voter-approved amendment to California’s constitution that prohibits same-sex marriage. That legislation was sparked by a 2008 ruling by the court that overturned the state’s ban on gay marriages. In this recent ruling, the court upheld the constitutional change but left intact the 18,000 marriages of same-sex couples who married before Prop 8 took effect.

This decision creates a sort of “mixed system,” according to a report in the San Jose Mercury News. No more gay couples may wed, but those who tied the knot before this most-recent ruling will have equal rights with heterosexual married couples.

California still extends spousal benefits to state-registered domestic partners, so some employers won’t see significant changes from this ruling, according to attorneys at the law firm McDermott Will & Emery LLP. However, the domestic-partner rule does not apply to self-funded plans, qualified and nonqualified retirement plans and plans that are funded outside the state. Employers with those plans should take extra care to make changes in light of the court’s ruling on Prop 8.

To avoid potential compliance pitfalls, employers with operations in California should carefully review their benefit plans to make sure any spousal benefits are provided to those who were married before the state court’s most-recent decision, the attorneys said.

The attorneys said employers might have to amend their eligibility descriptions in their summary plan descriptions (SPDs) and enrollment forms. In addition, employers should be very specific about the definition of “spouse” in any plan document.



Mental Health Coverage
Most Employers Aim to Keep Benefits,
Meet New Rules

A large majority of employers say they’re committed to keeping benefits that cover mental health conditions despite new federal regulations designed to bring those benefits in line with other medical coverage.

Only 7.1 percent of employers polled by the Partnership for Workplace Mental Health said they are considering dumping mental health benefits. Slightly more (7.8 percent) also are thinking about discontinuing coverage for substance abuses.

In fact, 38 percent of employers plan to boost their promotion and use of employee-assistance programs to help them achieve mental health parity as required by a federal law passed in 2008. The Mental Health Parity Act (MHPA) requires companies with 50 or more employees to provide the same coverage for mental disorders, which in some cases includes substance abuse, as they do for other medical illnesses.

A separate report by the National Alliance on Mental Illness (NAMI) found that states and employers still have much room for improvement when providing mental health services and benefits. In a grading of mental heath services based on a variety of criteria -- such as access to medicine and education -- the group gave the nation a D, reflecting a lack of adequate coverage in private and public plans, the report said.

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• HSA CONTRIBUTION RATES: The IRS has announced the new maximum out-of-pocket expenses and contribution rates for plans linked to health savings accounts (HSAs) in 2010.
   They are:
   Single coverage: $5,950 maximum out-of-pocket; $3,050 contribution;
   $1,200 minimum deductible
   Family coverage: $11,900 maximum out-of-pocket; $6,150 contribution;
   $2,400 minimum deductible