Even in Iowa, married gays are still unequal in work benefits

Jacob Holman didn't think twice as he wrote the name of his new husband, Michael Walker, in the space marked “spouse” on the application form.

Holman, a respiratory therapist, didn't expect much to change after he wedded his longtime boyfriend in a quiet ceremony in May. But he was hoping to provide health insurance for Walker, a full-time student.

But Walker could not be added to the company insurance plan. Holman's employer, Methodist Health System, follows the federal definition of marriage and does not consider the couple married.

Three months have passed since the Iowa Supreme Court legalized same-sex marriage, and gay couples are finding out that being married doesn't necessarily translate into spousal health benefits.

Of 27 major Iowa and Nebraska employers contacted by The World-Herald, four provide health insurance benefits to gay married couples.

Most employers have not changed their health insurance benefits to include gay spouses and, according to federal law, they don't have to.

“They're treating other married couples differently than us,” said Holman. “I really don't think it's right.”

Most of these employers already offer domestic partner benefits, including health insurance, but that has drawbacks: Those receiving domestic partner health benefits pay higher taxes and must jump through hoops most married couples don't face.

Ed Rider, spokesman for Methodist Health System, said that until the courts rule on the differences between federal and state laws, “we will continue to follow federal interpretations and definitions related to marriage.”

There isn't a conflict between state and federal laws, said Camilla Taylor, a lawyer for Lambda Legal, a New York City-based gay rights group.

“That's simply an excuse for discrimination,” Taylor said. “The federal law is a floor. ... Companies are free to do the right thing.”

Unlike Nebraska, Iowa's anti-discrimination law specifically lists gay people as a protected class. That includes treating married gay employees the same as married straight employees in the workplace.

But employer-provided health insurance is a different story.

The federal definition of marriage under the Defense of Marriage Act recognizes only heterosexual couples, and the health plans provided by most private employers are governed by federal law — the Employee Retirement Income Security Act, or ERISA.

As a federal law, ERISA trumps state law. It doesn't prohibit employers from extending health benefits to gay married couples, but it doesn't compel them to do so, said Colleen Medill, law professor at the University of Nebraska College of Law.

Typically there is little difference between spousal benefits and domestic partner benefits. Both usually include health, dental and vision insurance, among other benefits.

But both gay and straight domestic partners are usually required to provide evidence of their relationships to employers. That can be as involved as producing proof of the length of a relationship, shared household and joint finances, or attesting to the relationship in an affidavit. That hasn't changed since the Iowa ruling. Straight married couples generally don't have to fill out questionnaires or provide proof of their marriage.

And in most cases, gay married employees aren't exempt from this process simply because they have a marriage license. Employers continue to funnel gay employees through domestic partner programs, whether they're married or not.

“The new Iowa law allowing same-sex marriages has not impacted the way we run our benefit programs,” said Art Slusark of the Meredith publishing company in Des Moines. “We're treating those marriages as domestic partnerships just like we treated them before.”

While the benefits offered are often the same, domestic partner benefits come with another disadvantage: taxes. Domestic partner benefits are considered income by the Internal Revenue Service, unlike traditional spousal benefits, so recipients pay state and federal income taxes on them.

In Iowa, the state taxes would be dropped if a couple received spousal benefits instead of going through a domestic partner program. But that's not the route most employers have taken.

One exception is Hy-Vee. The Des Moines-based supermarket chain did not offer any benefits to same-sex couples prior to the court ruling. Now, gay employees who get married are eligible for the same benefits given to heterosexuals.

“Obviously, we wanted to extend those benefits to our employees who want to choose to get married in Iowa,” said Chris Friesleben, spokeswoman for Hy-Vee.

The new policy applies to employees in all seven states where Hy-Vee operates, including Nebraska, which does not recognize same-sex marriage.

West Corp., an Omaha-based company, also recognizes gay married employees. Any “legal spouse” of an employee is eligible for health coverage, said David Pleiss, spokesman for West. That includes gay couples in Nebraska or Iowa who have a valid marriage license, Pleiss said.

First Data in Omaha now extends spousal benefits to gay couples who are married, but only if they live in a state that recognizes same-sex marriage. Gay couples in Nebraska, however, would be eligible for domestic partner benefits.

Private corporations have been extending benefits to gay employees for years.

San Francisco-based Bank of the West, a major Nebraska employer, began providing domestic partner benefits in 1990, 14 years before Massachusetts became the first state to grant gay couples marriage licenses.

Des Moines-based Principal Financial has been providing domestic partner benefits since 1993. In 2001, that program was expanded to include children of domestic partners.

“Offering such benefits is a good recruiting tool to attract a diverse mix of talented people to our company,” said Anuj Nayar, spokesman for PayPal, which also provides domestic partner benefits.

Omaha's Union Pacific began offering such benefits in 2003.

“That started because we strive to hire the best people, and part of our efforts were to remain an employer of choice,” said Tom Lange, Union Pacific spokesman.

Iowa Health, a private system of hospitals and clinics, employs 20,000 people, primarily in Iowa. The company began offering domestic partner benefits in 2008 after hearing from employees that they were needed. In the first year, 3 percent of the work force enrolled. Now it's 5 percent.

“It's less a cost matter as it is what's the right thing to do,” said Cheri Bustos, spokeswoman for Iowa Health.

Employers that do not offer spousal health benefits for gay employees in some cases cited both religion and a lack of requests for such benefits.

Creighton University, one of Omaha's largest employers, does not provide gay employees with spousal or domestic partner benefits. “Part of it is because we are a Catholic institution,” said Creighton spokeswoman Cindy Workman.

No gay employees at Blue Cross Blue Shield of Nebraska have requested benefits for a spouse since the Iowa Supreme Court decision, said spokeswoman Bev Carlson.

“We haven't had a need to establish a policy yet. It just hasn't been an issue for us,” Carlson said. “But we're always reviewing policy. . . . It has to be on everybody's radar right now.”

Alegent Health, which has facilities in both Nebraska and Iowa, won't make any changes until next year, said Peg Breen, vice president of human resources. The company needs time to hear from employees about what, if any, changes should be made.

For now, newlywed Michael Walker will continue to go without health insurance. He plans to forgo preventative care such as routine physicals or dental visits. He and Holman hope that, in spite of federal laws, Methodist and other employers will change their policies and see them as married.

“I love my job, and I love the people I work with,” said Holman. “It would be hard to change jobs for insurance, but it's pretty important.”

Contact the writer:

444-1310, elizabeth.ahlin@owh.com

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