Medical/Dental Insurance for Same-Sex Spouses and Qualified Domestic Partnerships (QDPs) of Faculty and Staff


Supreme Court Ruling on Same-Sex Couples

The Supreme Court ruled last week that married same-sex couples are entitled to the same federal benefits, including tax benefits, that are available to married opposite-sex couples. The ruling appears to take effect immediately and may even require retroactive application.

Since December 6, 2012, PEBB employee benefits have been available to spouses regardless of the spouse's gender with a caveat regarding the tax implications of benefits for same-sex spouses and their children.

With the Supreme Court ruling, PEBB will need to review all of our materials so they are congruent with the new ruling but at the same time, we must await promised direction from federal sources including the IRS to be sure that we provide the correct guidance to you. The IRS does not have the needed direction at this time. We anticipate directing payrolls to stop inputting of taxes on the premium payments for same-sex spouses and their children and we anticipate discontinuing the use of the "Declaration of Tax Status" for same-sex couples. Planning to make those changes would be logical action at this time.

The complexity and the unknowns - the reasons we aren't prepared to suggest you implement the above action now - are significant. As an example, the Court's ruling does not change the current reality that the federal government defers to states to determine the marital status of same-sex couples. So, if your employee happens to live in a state that doesn't recognize same-sex marriage - and we are surrounded by such states - we do not yet know whether the IRS will look to the state of residence or the state in which a couple is married to determine the tax treatment of same-sex spouse coverage.

At this point, we recommend the following:

  • Stand-by for further guidance from us as soon as we get direction from the IRS and others.
  • Prepare to stop imputing taxes on premium payments for same-sex spouses and paperwork requirements as noted above.
  • If an employee wishes to change their tax withholding now, document their request as you would any such request and make the change. Ultimately, the taxation issue for them will be resolved between them, their tax advisor, and the IRS.
  • If an employee has questions about retroactive relief from taxes withheld already, encourage them to consult their tax advisor for guidance on how to proceed
  • Consult your tax advisor if you consider a different approach

Please note that the Court's ruling will not change our guidance regarding other people including same-sex domestic partners, extended dependents such as foster or disabled children, or opposite-sex domestic partners where one partner is 62 years old or older. Our materials will remain unchanged for these persons including guidance related to the use of the "Declaration of Tax Status" form and the imputing of taxes on premium payments.

Steve Norsen
PEBB Outreach & Training


Employer-Provided Insurance for Spouses, Qualified Domestic Partners and Children

Western Washington University provides insurance coverage to qualified same- and different-sex domestic partners and their children in accordance with the provisions of the Washington State Public Employees Benefits Board regulations.

A Qualified Domestic Partnership (QDP) is one in which two people are registered as domestic partners with the Secretary of State for the State of Washington and meet the following criteria:

  • both persons share a common residence,
  • both persons are at least 18 years of age,
  • neither person is married to someone other than the domestic partner and neither person is in a domestic partnership with another person,
  • both persons are capable of consenting to the domestic partnership,
  • the persons are not more closely related to one another than a second cousin as determined by the rule of civil law. For example, neither person is a sibling, child, grandchild, aunt, uncle, niece, or nephew, to the other person, and
  • both persons are of the same sex or if the partners are of different-sex, and one of the persons is at least age 62.

For the purposes of benefits eligibility, the PEBB program will accept same-sex domestic partnerships validated in other states.

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Registering a Qualified Domestic Partnership

To register a qualified domestic partnership with the State of Washington, compete and submit the Declaration of State Registered Domestic Partnership form.

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Children of Same-Sex Spouses and Qualified Domestic Partners

The term "children" refers to your biological children, step-children, legally-adopted children, children for whom you have assumed a legal obligation for total or partial support in anticipation of adoption, children of your qualified domestic partner, and children specified in a divorce decree or court order.

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Insurance-related Tax Issues for Same-Sex Spouses Qualified Domestic Partnerships

Entering into a domestic partnership may have tax consequences for you depending on your partner's/child(ren)'s eligibility as dependents under the Internal Revenue Code (IRC) Section 152. If your partner and/or child(ren) do not qualify as eligible dependents under IRC 152, the University must report the cost of the insurance that the University provides for them and the insurance contributions you make as wages on your statement of taxable income (on your W2 form). The value of this benefit is subject to Federal Income, Social Security, and Medicare taxes. Western Washington University must deduct and withhold these taxes from your paycheck based on the market value of the coverage, called "imputed income." In addition, the portion of the employee-paid, pre-tax paycheck deduction that pays for this coverage is also subject to Federal taxation.

Western Washington University reimburses employees in same-sex partnerships and marriages for the federal taxation on same-sex partners' health and wellness benefits. The process, termed a "gross-up benefit," increases salaries by the amount taxed by the federal government plus the amount taxes would increase due to income, effectively eliminating the penalty incurred by same sex couples.

The University determines IRC 152 eligibility based on the Declaration of Tax Status form that you complete at the time you enroll in an insurance plan, or at the time you change your enrollment due to a qualifying life event.

For more information, see:

  • Tax Issues Related to PEBB Domestic Partner Insurance - Effective January 1, 2013

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Starting Health Insurance Coverage for Qualified Domestic Partners, Same-Sex Spouses, and/or Children of a Spouse or Qualified Domestic Partner

Complete these required forms to enroll:

You may use the spouse fields and include the date of marriage to enroll your same-sex spouse.

You must use the domestic partner fields to enroll a state-registered domestic partner.

You must provide proof of eligibility within PEBB's enrollment time lines or family members won't be enrolled.

Make a copy of all completed forms, and mail or deliver these forms to the WWU Benefits Office.

You will receive a notification letter upon enrollment.

Subscribers enrolling a same-sex spouse must also complete and submit PEBB's Declaration of Tax Status form to declare their spouse is a tax-qualified dependent. The subscriber also must complete and submit the form if the tax status changes for an enrolled same-sex domestic partner, same-sex spouse, or the children of a same-sex partner or spouse.

If you need assistance, please e-mail WWU Benefits.

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Waiving Insurance Coverage or Adding Insurance Coverage at a Later Date

You have the option to provide health insurance coverage for your QDP, spouse, and/or children. If you do not enroll your domestic partner, spouse, or your domestic partner or spouse's child(ren) upon your initial employment of during the annual open enrollment period, you will not be able to enroll them at another time unless a qualifying event occurs.

If you do not enroll your domestic partner or spouse in life insurance within the first 60 days of the initial eligibility date, he/she may be subject to evidence of insurability and possible denial of coverage.

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Ending Coverage

Please see the Changing Medical/Dental Enrollment section found here.

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Background

Effective January 1st, 2001, the Public Employees Benefits Board (PEBB) extended medical, dental, and life insurance coverage to same-sex domestic partners. Effective January 2010, the PEBB further extended coverage to include different-sex partnerships if at least one partner is age 62 or older. Same-sex partnerships must be registered with the Secretary of State.

Washington State's Civil Marriage and Domestic Partnership law went into effect December 6, 2012. The law, which legalizes same-sex marriage in Washington, was ratified when voters approved Referendum 74 last November.

Until June 30, 2014, same-sex couples can either marry or register as domestic partners with the Washington Secretary of State's Office. Washington State will convert same-sex domestic partnerships registered here to marriage status on July 1, 2014, unless the couple chooses to marry sooner or is in the process of a dissolution, annulment, or legal separation. EXCEPTION: If at least one partner is age 62 or older, the couple may remain domestic partners.

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Resources

Equal Rights Washington: A statewide political advocacy organization for the lesbian, gay, bisexual, and trans gender (LGBT) community of Washington State.

Frequently asked questions (FAQs) about same-sex marriage in Washington State can be found here.

If you would like more information about requesting Dual Career Assistance, click here.

 

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Page Updated 10.24.2013