Health Insurance In An Unmarried Relationship

by : Melih Oztalay

Thanks to the gay rights movement and the increase of both unmarried heterosexual and homosexual couples living together throughout Texas and the United States, the workplace trend toward domestic-partner benefits is improving the lives of many committed couples, regardless of sexual orientation or marital status.

As of March 1, 2006, only 49 percent of the Fortune 500, 78 percent of the Fortune 100 largest corporations, and a small percentage other, smaller businesses, organizations and educational and government entities offered health benefits to employees' domestic partners, according to a recent study by the Human Rights Campaign Foundation.

And while it's true that the number of companies involved is relatively small, there are some very large employers, such as the Big Three automakers, who have jumped on the bandwagon. The number of individuals affected also is limited, but the unmarried couple-count is on the rise and many unmarried households include children who could be important beneficiaries of domestic-partner health insurance.

If your employer or your partner's employer offers domestic partner benefits, here are some things to consider before you sign up:

Follow the Rules
Most companies require that your significant other be 18 or older, not related to you by blood or married to someone else. You and your partner must live in the same permanent residence in an exclusive, emotionally committed, financially responsible relationship, similar to marriage. You may be required to show you share a lease or a mortgage, an insurance policy, utility bills, a joint checking account, etc.

The Taxing Situation
While the IRS allows the cost of health benefits for married spouses and dependents to be tax deductible, it hasn't yet given the same rights to unmarried couples. So the amount of money that your employer pays for health insurance for an unmarried partner and any children will be included as taxable income on your W-2.

Insurers May Not Agree
While your company may be willing to pay for these benefits, not all health insurance companies whose plans are available to an employee may agree. Some insurers are concerned that domestic partner benefits will drive up costs. For example, it's possible that the less-expensive HMO may raise objections, while the more expensive Preferred Provider Organization (PPO) or the traditional indemnity plan may not. If you have questions about your plan, talk to your human resources department or call the insurer directly.

Share the power
If you're the partner holding the policy, it doesn't necessarily mean you can make any health care decisions for your significant other if or when he/she is unable to make them. Married couples have much broader rights. A healthcare power of attorney can overcome what could be a big issue in an emergency. It has nothing to do with money. It simply allows the person you designate - in this case, your partner - to make medical decisions on your behalf if you are unable. It also can ensure that if you become ill, your partner will be able to visit while you're in the hospital. The document, which should be prepared by an attorney, can also specify the names of physicians and limit the use of life-extending procedures. But it doesn't have to be that complicated. Keep the completed document someplace, other than a safety deposit box, so it is accessible when you need it most.

It's Over and You're Moving On.
Most employer-sponsored group policies require that you inform the company immediately if your living situation changes. A recent federal court decision left open the possibility that COBRA could cover domestic partners. COBRA is the Consolidated Omnibus Budget Reconciliation Act - federal legislation that requires many businesses to keep former employees and their dependents on the group health plan for a limited period. COBRA regulations allow a divorcing spouse to keep the estranged spouse's insurance for up to 18 months. The federal court decision said this didn't specifically exclude domestic partners. But the likelihood an unmarried partner will be able to claim COBRA is slim. That means that the partner could be left without his or her own insurance with little or no notice.

With only 49 percent of Fortune 500 companies and an even smaller percentage of small businesses offering health benefits to employees' domestic partners, this still leaves a large majority of unmarried couples with possibly one individual in the relationship uninsured.