As gay, lesbian, bisexual, and transgender people prepare to celebrate June as Pride Month, they're finding that barriers to equal insurance benefits for same-sex couples gradually are going away.
"When you are talking about insurance for domestic partners, it clearly is increasing," says Paul Guequierre, a spokesman for the Washington, D.C.-based Human Rights Campaign, a civil rights group. "More and more companies are offering benefits."
For home and auto insurance, bundling policies into one plan for a shared household can earn discounts. Not all insurers offer unmarried same-sex couples the same discounts they provide for couples who are legally married, however.
Keir Jones, a State Farm agent in Long Beach, Calif., has made selling auto, home and life insurance to gay and lesbian clients a specialty. He says his agency strives to create a welcoming atmosphere, extending the same price breaks to unmarried domestic partners that it gives to people whose marriages are legally recognized.
Mario Morales, manager of corporate underwriting for MetLife Auto & Home, says his company has followed the same course.
"The policies we offer to same-sex couples are exactly the same policies we offer to heterosexual couples," he says.
Are domestic partner benefits improving?
While auto and home insurance companies are becoming more welcoming, finding affordable health policies remains a challenge for many same-sex couples.
The Defense of Marriage Act (DOMA) defines marriage as a union between a man and a woman. Because of the DOMA, a federal employee can insure a spouse through his or her job only if that spouse is a member of the opposite sex, says Aaron McQuade, director of news and field media for GLAAD, an organization that works with members of the news and entertainment media to ensure accurate portrayals of members of the gay community. GLAAD says it promotes understanding and equality.
Currently the U.S. Supreme Court is deciding whether DOMA is unconstitutional or not.
McQuade says the same-sex partners of federal workers must find insurance through their own jobs or on the individual insurance market. Individual policies typically are more expensive than group plans.That's because group plans enable employers to create large pools of policyholders. This generally enables them to receive cheaper rates from insurance companies. In contrast, individual insurance customers have less bargaining power to request discounts.
Guequierre says 12 states and the District of Columbia now recognize same-sex marriages. Another seven provide the equivalent of state-level spousal rights to same-sex couples within the state, and one state provides some statewide spousal rights to same-sex couples within the state.
In states that recognize same-sex marriages or civil unions, insurance plans that extend health benefits to the opposite-sex partners of employees also must provide benefits to same-sex partners, says Debbie Harrison, senior manager of public policy for the nonprofit National Business Group on Health. The organization studies national health care issues that affect businesses.
Businesses legally can decline to extend insurance benefits to the same-sex partners of employees, if those businesses are self insured, Harrison adds. Self-insured companies set money aside to cover claims, rather than purchasing their coverage through insurance companies.
"If you are self-insured, you aren’t buying insurance and aren’t subject to state laws," she says.
According to McQuade, not having a single national standard for how same-sex couples are recognized has created confusion and uncertainty.
"It is a big, murky, legal mess," he says.
For example, most major U.S. cities, including Boston, Los Angeles, New York and Philadelphia, offer health insurance benefits to the spouses of municipal workers who have same-sex partners, McQuade says. However, not all state governments extend insurance benefits to the same-sex partners of state workers.
"The partner of a state worker in Texas can't get benefits," he says. "The partner of a state worker in Minnesota can."
You can contact your state department of insurance to determine your state's policies regarding insurance and same-sex unions.
Among private sector employers, voluntarily offering health benefits to gay and lesbian domestic partners is a growing trend. Over half of all employers did so in 2011, according to a survey by Mercer, a benefits consulting company.
"Large employers are more likely to cover same-sex partners than small employers, but it is a voluntary choice," says Lee Badgett, a professor of economics at the University of Massachusetts Amherst. "The trend is going in the right direction, but it still has a very long way to go."
Life insurance for same-sex couples
Before same-sex couples can purchase insurance on the lives of their partners, they generally must to show that they have an insurable financial interest in their lives, says Cindy Gentry, chair-elect of the Life and Health Insurance Foundation for Education (LIFE). That means they must have a direct economic stake in the survival of the insured. Usually this involves having shared financial obligations, such as paying off home mortgages or funding the education of their children.
Same-sex couples often seek the legal protection of marriage or civil unions to prevent a surviving partner from having his or her status as a life insurance beneficiary challenged by relatives of the deceased.
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