Extension of Federal Benefits to Same-Sex Partners Falls Short of Goals
The memorandum issued by President Obama yesterday extends some benefits to the same-sex partners of federal employees, including access to a government insurance program that pays for long-term conditions such as Alzheimer's disease, and to sick leave to care for a sick same-sex partner or a non-biological child. However, the extension did not provide eligibility for health care to same-sex partners, drawing protest from gay activists.
Why did President Obama stop short? The Defense of Marriage Act (DOMA), the 1996 federal law that, among other things, defines marriage as a legal union exclusively between one man and one woman. According to President Obama's press statement, the White House determined that DOMA prevented an extension of all benefits to same-sex partners, including health care. In the statement, President Obama called on Congress to repeal DOMA and signaled an intend to extend all benefits to same-sex partners if and when that happens.
President Obama's actions will clearly impact Federal agencies and their employees, but what effect does it have on private employers? For now, none - the memorandum only applies to the federal government. However, it does signal a growing trend in mandating the extension of employee benefits to same-sex partners. States that recognize same-sex marriage generally require private employers to extend benefits to same-sex spouses; other states that do not recognize same-sex marriages but do recognize same-sex partnerships (such as Oregon, Washington and California) may require private employers to extend benefits to same-sex partners under certain circumstances. Private employers should consult legal counsel about their possible obligation to provide such benefits.
Obama To Extend Job Benefits to Same-Sex Partners
The New York Times is reporting that President Obama will sign an order later today extending some -- but not all -- job benefits to the same-sex partners of federal employees. According to reports, the order will come short of providing full health care coverage to same-sex partners. Check back in with the World of Work for details as they emerge.
New Legislation Aims to End Taxation of Domestic Partner Health Benefits
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Under the current tax code, employer-provided health care benefits for employees, their spouses and dependent children are exempt from federal income and payroll taxes; however, health care benefits provided to unmarried domestic partners are subject to both payroll tax (for the employee) and to income tax (for the domestic partner beneficiary). But if passed, the proposed Tax Equity for Health Plan Beneficiaries Act introduced last month in Congress would end the taxation of health care benefits of both same- and opposite-sex domestic partners.
The Act was introduced in the House of Representatives by Rep. Jim McDermott (D-Wash.) and in the Senate by Sen. Charles Schumer (D-N.Y.) A similar bill was introduced last year, but failed to gain enough traction to make it out of committee. The bill might have more potential this time around, with a friendlier climate in both Congress and the White House.
To learn more about the tax laws the Act may impact, check out this article on the taxation of domestic partner benefits from the Human Rights Campaign. The World of Work will pay attention to this and other important Labor and Employment legislation, so check back for updates!
Supreme Court Clears Pension Plan That Differentiated Pregnancy Leave Prior to the PDA
Today the U.S. Supreme Court held that an employer does not violate the Pregnancy Discrimination Act (PDA) if it pays pension benefits based in part on pre-PDA calculations that gave employees less retirement credit for pregnancy leave than for other types of medical leave. Click here to read the Court's decision in AT&T Corp. v. Hulteen.
The employer in Hulteen, AT&T, based its pension calculations on a seniority system based on years of service minus uncredited leave time. AT&T gave less credit for pregnancy absences than it did for other types of medical leaves. When the PDA was enacted in 1978, AT&T replaced its old plan a plan that provided the same service credit for pregnancy leave; it did not, however, make any retroactive adjustments for pre-PDA pregnancy leaves. Some female employees, including the plaintiff Hulteen, received less credit for pre-PDA pregnancy leaves, and therefore received smaller pensions.
The lower courts held that this violated Title VII; however, the Supreme Court reversed 7-2. Because AT&T's pension payments accord with the terms of a bona fide, non-discriminatory seniority system, they are insulated from challenge under Title VII §703(h). (The system was considered non-discriminatory because, prior to enactment of the PDA, an accrual rule limiting the seniority credit for time taken for pregnancy leave did not unlawfully discriminate onthe basis of sex.)
New COBRA Subsidy Forms and Information Available
The Department of Labor's Employee Benefits Security Administration has just released a salvo of new forms and information on the COBRA subsidy. Click on the titles below to download:
- COBRA Premium Reduction Fact Sheet
- Job Loss Poster (8½" x 11")
- Loss Poster (11" x 17")
- Flyer for Employers • Flyer for Employees
- COBRA Continuation Health Coverage FAQs for Employees
- COBRA Continuation Health Coverage FAQs for Employers
- IRS Information on COBRA Premium Reduction
- DOL Information Related to the American Recovery and Reinvestment Act of 2009
Keep watching the World of Work for more information on the COBRA subsidy!
Help On Stimulus Package's COBRA Assistance Available
We have more information for you on the provisions of the stimulus bill affecting the Consolidated Omnibus Budget Reconciliation Act (COBRA). First, the Employee Benefits Security Administration (part of the Department of Labor) has published this website with information on COBRA continuation coverage assistance. The Web site also includes a "Subscribe To This Page" link, allowing users to receive e-mail updates when new items are posted. Second, in case you didn't receive it, Stoel Rives sent out this client alert last week, with more detailed information on the COBRA assistance program.
Stimulus Package Includes COBRA Subsidies
Among the provisions of the new stimulus package signed by President Obama are subsides for unemployed workers continuing their health care benefits through the Consolidated Omnibus Budget Reconciliation Act (COBRA). The key points of the package are:
- Who is eligible? Employees who have been involuntarily terminated between September 1, 2008 and December 31, 2009 with annual incomes less than $125,000 (single) or $250,000 (couples) are eligible for the COBRA premium assistance. Qualified individuals, who initially decline COBRA coverage, would be given an additional 60 days after they receive notice of the special election period to elect to take advantage of the subsidy.
- How much is the subsidy? Eligible employees may receive a 65 percent subsidy toward their health care premium for up to nine (9) months. The Treasury Department will provide employers (or health plans, if they administer COBRA benefits) a credit against payroll taxes to cover the cost of the subsidy. The subsidy terminates upon any offer of new health care coverage through an employer or with Medicare eligibility.
- Are there new notice requirements? Of course! COBRA notices must include information on the availability of the premium assistance. Model notices from the Department of Labor are due 30 days after enactment (so by March 18, 2009). The Act requires employers to notify all plan participants of the new subsidies within 60 days of enactment (or by April 17, 2009). We'll post the model notice as soon as it is available.
- When does the subsidy take effect? March, 2009.
For more information on COBRA, check out this page from the Department of Labor.
U.S. Supreme Court to Hear Six L&E Cases This Term
The U.S. Supreme Court opened its 2008-2009 term on October 6 with six labor and employment law cases on its docket. (For docket information and questions presented, click on the name of the case).
- Locke v. Karass: may a public employee union may charge nonmembers for representational costs for litigation expenses incurred by the international union on behalf of other bargaining units?
- Kennedy v. Plan Administrator for DuPont Savings & Investment Plan: is a qualified domestic relations order (QDRO) is the only valid way under ERISA for a divorcing spouse to waive his or her right to the other spouse's pension benefits?
- Crawford v. Metro. Gov't of Nashville & Davidson County: Is an employee who cooperates with an employer-initiated investigation into alleged unlawful discrimination protected by Title VII's anti-retaliation provisions?
- Ysursa v. Pocatello Education Ass'n: does an Idaho law that prohibits local government employers from allowing employee payroll deductions for political activities violate the First Amendment free speech rights of unions and their members?
- 14 Penn Plaza LLC v. Pyett: do employees covered by a collective bargaining agreement which providies that statutory employment discrimination claims must be pursued through the contractual grievance and arbitration procedures have a right for a court to decide their discrimination claims?
- AT&T Corp. v. Hulteen: must an employer give full service credit for purposes of calculating retirement benefits for pregnancy leaves taken before the Pregnancy Discrimination Act of 1978 if the plan gave full credit for other types of temporary disability leaves?
Some of these cases (such as the Penn Plaza and Crawford cases) have the potential to make significant changes in existing law. Stay tuned to the World of Work for developments as they occur!
Congress Passes Bills Requiring Health Plans to Cover Mental Illness
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Yesterday, the U.S. House of Representatives and the U.S. Senate both passed laws that will require employee health plans to offer the same benefits for mental illness as they do for other medical conditions.
The House approved H.R. 6983 by a 376-47 vote, and the Senate passed another version, H.R. 6049 (a tax and energy bill containing the mental health parity legislation as a rider), by a 93-2 vote. There are some minor discrepancies between the two versions (such as how it will be paid for) to be worked out, but that should not prevent the bill from becoming law. The Bush administration has stated that it supports the Senate version of the law.
If Congress can iron out the differences before it adjourns for the year, the bill will go into effect January 1, 2008. Keep an eye on the World of Work for more developments.
