Military Veterans Benefits will be Extended to Same-Sex Married Spouses

images-1The Department of Defense announced today that spouses of gay military members will be eligible to receive veterans benefits.  This is the latest announcement regarding the effects of the Windsor decision in which Section III of DOMA, limiting the definition of marriage to be between one man and one woman for federal law purposes, was found unconstitutional.

The Department of Defense had previously announced that military benefits would be extended to same-sex spouses. However, a decision on veteran’s benefits had been delayed because those benefits were separately governed under Title 38 of the U.S. Code, which includes its own provision defining marriage between a man and a woman. The Justice Department recently advised the Obama Administration that it considered Title 38’s definition of marriage unconstitutional for the same reasons as set forth in the Windsor decision. Following that advisement, Attorney General Eric Holder announced today that President Obama has directed the Executive Branch to take steps allowing for same-sex spouses of military veterans to collect federal benefits. The announcement comes after the House Bipartisan Legal Advisory Group (BLAG) recently decided to stop defending the Title 38 provisions in pending cases. Additionally, last week, a federal district court in California held the Title 38 provisions unconstitutional on equal protection grounds.

This decision clears the way for the same-sex spouses of military veterans to receive all veteran’s benefits, which include health care, disability and survival benefits and burials in national cemeteries.  The letter from the Attorney General to Congress outlining the decision can be read here.

IRS: All Same-Sex Marriages Recognized for Federal Tax Purposes

imagesThe IRS has announced that it will recognize all legal same-sex marriages for federal tax purposes, regardless of where the couple resides. Thus, even if a same-sex couple lives in or moves to a non-recognition state, such as Colorado, if they have obtained a marriage in a recognition state, then they will be treated as married for purposes of federal tax law.

The primary highlights of today’s announcement are:

– Same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming the earned income tax credit or child tax credit.

– Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.  Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011, and 2012.

– Employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income.

To read the announcement in its entirety, go here.

Colorado Division of Insurance Addresses Sexual Orientation Discrimination

On March 19, 2013, the Colorado Division of Health Insurance released a bulletin declaring that Colorado insurers are prohibited from discriminating based on sexual orientation, this includes heterosexuality, homosexuality, bisexuality and transgender.  The Division of Insurance does not make state law but issues guidance or policy statements that interpret already existing state laws. Under Colorado statute, a Colorado insurer is prohibited from “inquiring about or making an investigation concerning, directly or indirectly, an applicant’s, an insured’s, or a beneficiary’s sexual orientation in … [a]n application for coverage.” Colo. Rev. Stat. § 10-3-1104(1)(f)(VI). Further, state law prohibits an insurance company from “using information about gender, marital status, medical history, occupation, . . . to determine sexual orientation”  Colo. Rev. Stat. § 10-3-1104(1)(f)(VII). Finally, it is unlawful for any insurance company to use “sexual orientation in the underwriting process or in the determination of insurability.”  Col. Rev. Stat. § 10-3-1104.   In reviewing these laws, it is clear the basic premise of the bulletin, that discrimination based on sexual orientation is prohibited, is not new but the bulletin serves to highlight for Colorado’s insurers exactly what types of actions are prohibited under these already existing laws.

Specifically, the bulletin states that under these laws, a Colorado insurer may not:

1). impose any differential in premium rates or charges with regard to an applicant or covered person’s sexual orientation;

2). designate an individual’s sexual orientation as a pre-existing condition for the purpose of denying or limiting coverage;

3). deny, exclude, or otherwise limit coverage for medically necessary services, as determined by an individual’s medical provider, if the item or service would be provided based on current standards of care to another individual without regard to their sexual orientation.

One of the most significant impacts this bulletin is expected to have is on the transgender community. Transgender individuals are often denied insurance coverage based on either their transgender status or for transgender-related services, in spite of the fact that the American Medical Association, American Psychological Association, American Psychiatric Association and the Colorado Medical Society have issued statements against discrimination in public and private organizations, including in relation to the medical care transgender people receive.

Some examples of specific insurance coverage requests that may be implicated by this bulletin is that an insurer who covers breast-reduction surgery to relieve back pain cannot deny the same coverage for a transgender person if the medical provider deems it medically necessary.  The American Medical Association has stated that it generally considers such treatment medically necessary for treatment of gender identity disorder.  Other examples that have arisen in the past are the inability of transgender patients who identify as male to receive insurance coverage for annual gynecological exams  and the inability of transgender patients to receive insurance coverage for hormone-therapy treatment while the same treatment is covered for conditions of non-transgender patients.

It is important to note, however, that the laws addressed in this bulletin only apply to Colorado insurers.  An employer who is based outside of Colorado likely also purchases their employees’ health insurance outside of Colorado and therefore, is not governed by Colorado’s insurance laws.  It also does not apply to self-funded insurance plans.  Even with these limitations, though, it remains an example of Colorado doing what is within its power to protect the LGBT community from discrimination, and this is an area in which existing laws have been lacking in their application and protection.

To read the bulletin in its entirety, go here.

To read an article about application of the bulletin, go here.