In the wake of the landmark United States Supreme Court ruling on Obergefell v. Hodges, employers that offer spousal benefits will be required to do so for same sex couples. An article in the 6/26/2015 edition of The Wall Street Journal (WSJ) by Rachel Emma Silverman reviews the FAQs that impact employers as a whole and is a good resource for orchestras.
By and large, orchestras are comparatively progressive employers in that a number of institutions in states that previously banned same-sex marriage and/or denied same-sex partners spousal benefits have already adopted measures to circumvent those restrictions. Having said that, that doesn’t mean orchestras should assume they can move forward with a business-as-usual perspective and the WSJ article examines a few items worth considering.
Although all employers must offer any spousal benefits to same-sex couples, there is a potential loophole for employers that opt to self-insure.
But companies that are self-insured, which means they assume the insurance risks for their own employees, a common practice among large companies, aren’t under the same legal constraints. “There is technically no legal requirement that a self-insured company has to include a same-sex spouse,” [Todd Solomon, a law partner in the employee-benefits practice group at McDermott Will & Emery in Chicago] says. As a result, self insurance “is where we are going to see a lot of activity and a lot of litigation.”
Potential Impact At The Bargaining Table
It will be interesting to see if any orchestras in states that previously banned same-sex marriage will use any cost increases for benefits as leverage in collective bargaining agreements. Since the economic downturn, the increase in costs for benefits has routinely been a hot button issue and employers have routinely pushed to reduce benefits and/or increase employee contributions.
The WSJ examines how employers may expect the ruling to impact their expense structure and one of their predictions is that employers will use the ruling as an excuse for increasing existing trends in reducing spousal benefits.
Employers have been cutting spousal benefits to save money, either dropping spousal coverage or imposing surcharges on spouses who can obtain health insurance elsewhere. A survey from consulting firm Mercer of over 1,100 large employers found that 17% either excluded spouses with other coverage available or imposed a surcharge in 2014, compared with 12% in 2012.
The Supreme Court ruling might spur some employers who were already inclined to cut spousal benefits to do so, Mr. Solomon says.
Migrating From Domestic Partner Benefits To Full Fledged Spousal Benefits
As mentioned above, a number of orchestras operating in states that previously banned same-sex marriage have adopted what are commonly known as domestic partner benefits and the WSJ anticipates employers may need to begin crafting plans to phase those programs out but there are additional considerations related to helping gay employees avoid discrimination.
But companies that offer partnership benefits just to gay couples may begin to phase them out, because now all their employees can legally marry. Offering domestic partnership benefits just to gay couples but not straight ones might make firms vulnerable to reverse discrimination lawsuits, lawyers say.
On the other hand, firms may choose to keep domestic partnership benefits to help protect gay employees from discrimination. The majority of U.S. states lack anti-discrimination protection for gay employees, so workers can be fired for their sexuality. Because marriage certificates are public, forcing employees to get married for spousal benefits may end up “outing” an employee, while domestic partnerships are typically private matters, gay advocates say.
This point becomes increasingly salient in light of two states that have already indicated that they will not begin abiding by the ruling until the last possible moment. Reuters reported that Louisiana and Mississippi will not issue same-sex couples marriage licenses until “legal formalities” have been settled.
Prior to the Obergefell v. Hodges ruling, 13 states banned same-sex marriage by state law: Arkansas, Georgia, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee, and Texas. A number of those states are home to some of the larger budget orchestras in the field, which are the very type that offer spousal benefits; this list includes the Atlanta Symphony, Detroit Symphony, Cincinnati Symphony, Cleveland Symphony, Dallas Symphony, Houston Symphony, Fort Worth Symphony, St. Louis Symphony, Kansas City Symphony, and Nashville Symphony.
Moving forward, these institutions are going to be the likely suspects for considering the insights provided in the WSJ article.
On 9/1/2014, I published a post about the then ongoing controversy at South Williamsport, PA over a decision by school officials to ban a planned production of Spamalot by Eric idle due to what the school’s principal, Jesse Smith, described as the musical’s “homosexual themes.” In particular, the administrator’s objections focused on the musical’s final scene that includes a same-sex marriage and at the time I wrote the following passage:
“If racial discrimination was one of the great social shames of the Greatest and Baby Boomer Generations, then sexual orientation discrimination certainly occupies an equal level of ignominy for Generation X.”
Ten months later, the United States Supreme Court ruled that same-sex marriage must be legal in all 50 states and completed the latest chapter in the slow but steady march toward equality.
The Obergefell v. Hodges ruling is a momentous occasion and one that should not only spark celebration but serve as a catalyst for bringing people together. I genuinely hope that our field will move forward with implementing same-sex spousal benefits ahead of nonprofit and for profit peers while avoiding any temptation to use the landmark ruling as an excuse for lowest common denominator behavior; including, but not limited to, using it as an excuse to cut and/or reduce existing benefits.
Ideally, any additional costs will be met among boards with willful determination and motivate members to increase contributed income necessary to cover any revenue gaps.