Final Marital Status Definitions and Spouse/Partner Coverage Trends
By Danielle Capilla, Chief Compliance Officer for United Benefit Advisors
Recently, the Internal Revenue Service (IRS) issued final regulations that define terms used in the Internal Revenue Code (IRC) describing the marital status of taxpayers for federal tax purposes. In general, for federal tax purposes, the terms "spouse," "husband," and "wife" mean an individual lawfully married to another individual. The term "husband and wife" means two individuals lawfully married to each other. A marriage of two individuals is recognized for federal tax purposes if the marriage is recognized by the state, possession, or territory of the United States in which the marriage is entered into, regardless of domicile.
Two individuals who enter into a relationship denominated as marriage under the laws of a foreign jurisdiction are recognized as married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States, regardless of domicile.
The terms "spouse," "husband," and "wife" do not include individuals who have entered into a registered domestic partnership, civil union, or other similar formal relationship not denominated as a marriage under the law of the state, possession, or territory of the United States where such relationship was entered into, regardless of domicile.
In anticipation of this rule, UBA has seen related trends in its 2016 Health Plan Survey. Namely, many employers are covering legal spouses only. In fact, 57.3 percent of all employers provide no domestic partner benefits, the first decrease (6.5 percent) seen in four years. Larger employers (1,000+ employees) provide the most same-sex domestic partner coverage, with 48.5 percent of their plans offering this benefit. The hospitality and technology industries, as well as employers in the West, also provide the most same-sex domestic partner coverage (46.7 percent, 46 percent and 67.9 percent, respectively).
For information on health care cost and plan design trends by region, industry and group size, be sure to download UBA’s 2016 Health Plan Survey Executive Summary, a free publication detailing the responses of 19,557 health plans and 11,524 employers, who cumulatively employ over two and a half million employees and insure more than five million total lives.
For more information on nondiscrimination regulations including who is affected, how the rule addresses sex, gender, and sexual orientation discrimination, how marketplace plans and third party administrators are affected, discrimination against persons with Limited English Proficiency (LEP) and disabilities, and enforcement mechanisms, view UBA’s ACA Advisor, “Nondiscrimination Regulations Relating to Sex, Gender, Age, and More Finalized”.