On June 27, 2015, the U.S. Supreme Court announced its decision that same-sex marriage will now be recognized nationwide, regardless of individual state legislation, effectively legalizing same-sex unions throughout the country.
The decision marks a huge victory for millions of Americans and U.S. culture as a whole, but that doesn’t mean there won’t be challenges to face in the coming years. One arena in particular that may be facing significant overhaul is HR services, specifically as they pertain to health insurance benefits. How might this decision affect the already complicated issue of benefits administration, and what do you as a manager need to know to be ready?
Picking up from where they left off
In many states, specifically the ones that had previously passed legislation legalizing same-sex marriage, much of the work to modernize benefits policy has already been done, the Society for Human Resource Management noted. However, there are still loopholes and statutes that need to be rooted out. For example, companies that offered employer-sponsored insurance in states that recognized same-sex unions are already required to insure partners of employees in equal fashion to any other family member under the plan. However, businesses that require employees to insure themselves aren’t required to extend plan coverage to same-sex spouses, the source indicated.
There is still significant gray area in terms of what protections same-sex couples are legally afforded by legislation such as the Family Medical Leave Act or organizations such as the Equal Employment Opportunity Commission. It’s likely that this will be a hotly contested area in the coming years.
What changes are on the horizon?
One of the most significant changes employers can expect has to do with how health benefits are taxed. Based on the new Supreme Court decision, states that had previously not recognized same-sex marriage can now no longer tax employees and their spouses on health benefits. This means that companies in these states may have to retroactively update their benefits information as non-taxable, beginning in January 2015.
The new tax considerations can potentially create stumbling blocks for small-business owners who haven’t had to implement such a major policy change before. Fortunately, PEO companies are on-hand to work with employers to not just offer advice, but to provide full-service turnkey solutions that are compliant with the most up-to-date legislation. For less than the cost of maintaining an in-house HR department, business owners can now ensure their benefits, payroll and taxation policies are future-proofed and compliant.