AB 2208 MAKES CHANGES TO DOMESTIC PARTNER COVERAGE
AB 2208, the California Insurance Equality Act was
recently signed into law and imposes new requirements for domestic partner
coverage on insurance carriers and employers. The new requirements become
effective for health insurance policies that are issued or renewed after
January 2, 2005. All other insurance plans are subject to the law beginning
January 1, 2005.
This issue of Insight provides a summary of the requirements and what
employers must do to comply with the new law.
Overview
AB 2208 expands upon the prior law AB 25 which required insurance
carriers to make domestic partner coverage available to employer groups who
wished to offer it. AB 2208 mandates that all insurance plans actually make
benefits available to domestic partners under the same terms and conditions
that apply to the spouse of an insured. Employer groups may no longer choose
to offer only spousal coverage under a benefit insured through a California
policy.
What Employers Need to Know
AB 2208 applies only to domestic partners that have registered their
partnership with the State of California. Registered domestic partners must
meet the requirements set out in section 297 of the California Family Code.
The Registration
Form includes the detailed set of requirements.
Domestic partner coverage must be provided under the same terms and
conditions that apply to the spouse of an insured. Employers cannot exclude
coverage for registered domestic partners unless spouses are also excluded
from coverage. Employers cannot require an affidavit for domestic partners
unless spouses are required to show proof of marriage. However, affidavits
can still be required for domestic partners who are not registered in
California such as domestic partners outside of California and most opposite
sex domestic partners.
AB 2208 applies to all forms of insurance that are regulated by the
California Department of Insurance, including plans such as group auto and
homeowners insurance. The law does not apply to self-insured plans or any
insurance plans that are not regulated by the state of California.
Most insurance policies with a January 1, 2005 renewal date are required to
comply with the new law on January 1, 2005. However, medical plans defined
as those providing hospital, medical, or surgical benefits are not required
to comply until the policy is renewed or amended after January 1, 2005. This
means that medical plans with a January 1, 2005 renewal date are not
required to comply until January 1, 2006.
What Employers Need to Do
| ArlenGroup clients do not
need to initiate any action. Your ArlenGroup associate will
contact you regarding any plans that need to be modified to comply
with the new law. |
For plans that currently provide domestic partner coverage:
Even
though plans may already cover domestic partners, there are still several
compliance responsibilities, including:
-
Modifying all contracts to provide coverage for registered domestic
partners. For example, many employers provide benefits only to same-sex
domestic partners. The new law covers all registered domestic partners,
which may include some opposite sex domestic partners who are allowed to
register with the State of California under limited
circumstances.
-
Modifying all contracts to ensure that the definition of a spouse
includes a domestic partner. For example, many dependent life insurance
plans define a spouse as the person legally married to the insured.
-
Ensuring that the enrollment requirements for registered domestic
partners are the same as for spouses. If an affidavit is required from a
domestic partner, then a marriage certificate must be required from a
spouse.
-
Review summary plan descriptions and employee communications to ensure
that these materials accurately reflect the new eligibility
requirements.
For plans that currently do not provide domestic partner coverage:
The
following steps must be completed to comply with AB 2208:
-
Modify all non-medical insurance contracts for January 1, 2005 to
include coverage for registered domestic partners that is equal to the
coverage for a spouse.
-
Conduct a limited open enrollment for employees to enroll their newly
eligible domestic partner in the insurance plans. Most group life
insurance carriers are allowing employers to conduct the open enrollment
in January 2005 and are allowing the domestic partners to enroll at the
guaranteed issue amounts without evidence of insurability.
-
Modify medical insurance contracts at or before your next renewal to
include benefits for domestic partners that are equal to the benefits
for a spouse.
-
Work with your payroll department to identify the tax consequences of
providing domestic partner coverage. The federal government may require
that employee contributions be made with post-tax dollars and that the
value of domestic partner benefits be included in the employee’s gross
income.
-
Review summary plan descriptions and employee communications to ensure
that these materials accurately reflect the new eligibility
requirements.
Additional Information
Legislative
text of AB 2208
State of
California Domestic Partner registry (includes registration form)
This document is not intended to provide any legal advice or analysis. Please
consult your own legal counsel for further information on the topics discussed in this
issue of Insight.
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