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What Employers Need to Know About Civil Unions

  • Fall 2005

    On October 1, 2005, Connecticut's Civil Union law will go into effect.  Under the new law, partners in a civil union will receive the same legal benefits and protections that Connecticut law currently grants to opposite sex spouses.  In the context of the employment relationship, the effect of the Civil Union law is still speculative.  It appears that the law will have its greatest impact on employee benefits.  Both public and private employers would be wise to explore how the Civil Union law may affect employee benefit plans.

    In the public sector, federal employers will not be required to give benefits to civil union partners.  Under the federal Defense of Marriage Act (DOMA), a marriage is "a legal union of one man and one woman as husband and wife."  While no definitive interpretations have been issued, it is likely that in accordance with DOMA, the federal government will not recognize civil union partners.  This means federal COBRA benefits presumably will not extend to civil union partners.  Connecticut, however, has a state COBRA law as well.  The state COBRA law applies to spouses in traditional marriages.  Under the Civil Union law, it will extend to civil union partners.  To the extent that an employer's COBRA plan is subject to the state version of the law, employers should plan for the inclusion of civil union partners.

    Benefit plans in the private sector are governed by the Employee Retirement Income Security Act (ERISA).  Under ERISA, employers may choose whether or not to offer benefits.  If an employer decides to provide benefits, it can decide to cover any combination of its employees, their dependents, spouses, and other beneficiaries.  With the enactment of the Civil Union law, employers may have to decide whether or not to extend benefits to civil union partners.  While ERISA is a federal law, it is subject to state insurance laws.  This means the State of Connecticut Insurance Department may require that any insurance benefits offered to spouses be offered to civil union partners as well.  It is important to note that the Insurance Department has not yet established an official position on this issue.

    Other benefits guaranteed by state law may be affected.  Connecticut law mandates that employees be given family leave benefits.  These benefits apply to spouses in traditional marriages, and should extend to civil union partners as well.  Any other non-ERISA benefits provided by an employer may be subject to change under the Civil Union law.  For example, if an employer provides adoption assistance or tuition reimbursement programs to spouses, they soon may be required to offer these programs to civil union partners.

    Employers also should be aware of potential changes in tax procedures.  Any benefits a civil union partner receives will be considered taxable income by the federal government.  On the state level, the Civil Union law will protect civil union partners from paying Connecticut income tax on their benefits.  Employers should ensure that their payroll systems will be able to process employee income taxes accordingly.

    While the Civil Union law mandates the extension of some benefits to civil union partners, employers still have some discretion.  However, once a plan is in place, employers should update their benefits plan language and human resources systems to ensure that any changes are adopted quickly and efficiently once the new law takes effect.

    On October 1, 2005, Connecticut's Civil Union law will go into effect.  Under the new law, partners in a civil union will receive the same legal benefits and protections that Connecticut law currently grants to opposite sex spouses.  In the context of the employment relationship, the effect of the Civil Union law is still speculative.  It appears that the law will have its greatest impact on employee benefits.  Both public and private employers would be wise to explore how the Civil Union law may affect employee benefit plans.

    In the public sector, federal employers will not be required to give benefits to civil union partners.  Under the federal Defense of Marriage Act (DOMA), a marriage is "a legal union of one man and one woman as husband and wife."  While no definitive interpretations have been issued, it is likely that in accordance with DOMA, the federal government will not recognize civil union partners.  This means federal COBRA benefits presumably will not extend to civil union partners.  Connecticut, however, has a state COBRA law as well.  The state COBRA law applies to spouses in traditional marriages.  Under the Civil Union law, it will extend to civil union partners.  To the extent that an employer's COBRA plan is subject to the state version of the law, employers should plan for the inclusion of civil union partners.

    Benefit plans in the private sector are governed by the Employee Retirement Income Security Act (ERISA).  Under ERISA, employers may choose whether or not to offer benefits.  If an employer decides to provide benefits, it can decide to cover any combination of its employees, their dependents, spouses, and other beneficiaries.  With the enactment of the Civil Union law, employers may have to decide whether or not to extend benefits to civil union partners.  While ERISA is a federal law, it is subject to state insurance laws.  This means the State of Connecticut Insurance Department may require that any insurance benefits offered to spouses be offered to civil union partners as well.  It is important to note that the Insurance Department has not yet established an official position on this issue.

    Other benefits guaranteed by state law may be affected.  Connecticut law mandates that employees be given family leave benefits.  These benefits apply to spouses in traditional marriages, and should extend to civil union partners as well.  Any other non-ERISA benefits provided by an employer may be subject to change under the Civil Union law.  For example, if an employer provides adoption assistance or tuition reimbursement programs to spouses, they soon may be required to offer these programs to civil union partners.

    Employers also should be aware of potential changes in tax procedures.  Any benefits a civil union partner receives will be considered taxable income by the federal government.  On the state level, the Civil Union law will protect civil union partners from paying Connecticut income tax on their benefits.  Employers should ensure that their payroll systems will be able to process employee income taxes accordingly.

    While the Civil Union law mandates the extension of some benefits to civil union partners, employers still have some discretion.  However, once a plan is in place, employers should update their benefits plan language and human resources systems to ensure that any changes are adopted quickly and efficiently once the new law takes effect.

What Employers Need to Know About Civil Unions

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