It’s tax time again and I tend to get questions this time of year about reporting of benefits. Health plans that provide coverage to same-sex couples and domestic partners require some special consideration for tax purposes so let’s review some of the key issues.
The first is verification of status. Some employers voice to me concerns over asking for marital status for fear that requiring enrollees to identify potential same-sex partners is tantamount to discrimination. But it is OK to ask (and in many instances, you are required to). You just can’t treat enrollees differently once they are determined to be eligible for coverage. As more states define their respective positions with regard to same-sex marriage or domestic partnerships, plan sponsors are under specific tax rules that require that benefits to these spouses and partners be properly taxed at a federal and state level. So the employer must, as a function of tax law, inquire about status and an employee who enrolls a same-sex spouse in a state that recognizes same sex marriage can be asked to differentiate between “marriage” and “same-sex marriage” for plan enrollment and tax purposes.
