I’ve been meaning to ask if employees are able to add common law spouses or domestic partners to health insurance?
This question comes up frequently. Many believe common law marriage is the same thing as a domestic partnership, however, there are some significant differences.
If common law marriage is recognized by the state the couple has the same rights as a civil marriage for state and federal tax purposes (e.g. taxation & benefit purposes) and likewise it requires a divorce to end the common law marriage.
There is a common myth that if you live together for a certain length of time (seven years is what many people believe), you are common-law married. I am not aware of this being true anywhere in the United States.
Rather only a few states recognize common law marriages, each with their own requirements. For instance TX recognizes couples who:
- Agree to be married
- Live together in Texas as husband and wife, and
- Tell other people that they are married.
Therefore, if the employer’s insurance plan does not specifically exclude common law spouses (e.g. dependent eligibility is defined as ‘legal spouse’) and the employee’s marriage was valid in the state in which it was entered into, the employee should be able to enroll their common law spouse.
Whereas a domestic partnership may be recognized by state law but it is not recognized under federal law. Therefore, if the plan’s eligibility includes domestic partners, the employee would be able to enroll their partner on the plan but not on a pre-tax basis, (i.e. imputed income) unless the domestic partner qualifies as a tax dependent (which isn’t common). Generally, an employer is not required to offer COBRA to a domestic partner either (i.e. no independent right to elect COBRA coverage) because COBRA is a federal regulation that doesn’t recognize a domestic partner as a qualified beneficiary. A self-insured plan an employer may design (if the stop-loss carrier agrees) to offer COBRA-like benefits to domestic partners, however, a fully-insured plan, the carrier may not be willing to amend the policy to provide COBRA-like coverage to domestic partners when under Federal Law, there is no obligation to do so.
And no, domestic partners are not equivalent to same-sex marriages….but I’ll leave that discussion for another blog post.