As marriage rates in the United States have decreased, cohabitation rates have increased. In 2016, more than 18 million adults were living with an unmarried partner, an increase of 29 percent from 2007. While some couples are simply not ready to marry yet, others have chosen not to marry for a variety of reasons. Being in a domestic partnership allows you to escape certain responsibilities of marriage, but it also prevents you from benefiting from certain rights that come with marriage. One gray area is health insurance benefits for domestic partners. If you live with a domestic partner, read on to learn how you can get domestic partner health insurance benefits and when it might not make sense.
what defines a de facto couple
Cohabitation does not only apply to same-sex couples. rather, a domestic partnership is where two single, unrelated people cohabit and share a domestic life. and they are not married or joined by civil union. the two people can be of the same sex or of the opposite sex.
There is no federal definition or recognition of domestic partnerships, nor guidelines for legal rights and benefits. so whether you are eligible to be classified as a domestic partner depends on where you live. In the world of health care, this categorization and the rights it extends could determine whether you get health insurance benefits and legal rights like hospital visits.
Which states recognize unmarried couples?
Not only is there no federal definition of domestic partnership, but there is not always consistent recognition within a state. some states recognize domestic partnerships and maintain registries. while in other states domestic partnerships are only recognized in certain cities and counties. what defines a domestic partnership under local law may also differ. For example, in California, a legally registered domestic partnership is available to:
- all same-sex couples who are at least 18 years old.
- as well as opposite-sex couples where at least one partner is 62 years of age or older.
This human rights campaign directory is a useful place to start, although the only way to confirm whether your locality recognizes domestic partnerships is to contact the local government department that issues marriage licences. be sure to also ask what that acknowledgment means in terms of your legal rights.
what is domestic partner health insurance?
domestic partner health insurance is when health insurance benefits are extended to a domestic partner, as well as married spouses. In general, this benefit will also be extended to the children of the de facto couple.
Please note that private employers are not required to offer health insurance to any employee. but if they do, they must comply with federal, state, and local laws regarding whether domestic partners are eligible for health insurance benefits. In most cases, you will need to prove domestic partnership to gain eligibility. This could be through registration with the local domestic partnership registry, an affidavit certifying your relationship, or other documentation. Insurance companies generally want you and your domestic partner to meet this criteria:
- has lived together for 6-12 months (depending on company requirements) and intends to continue doing so.
- that neither of you is married or in a domestic partnership with another person.
- not related by blood.
- and that you are financially interdependent.
- receives at least 50% of its financial support from you.
- lives in the same house as you.
- and you are a citizen, national, or legal resident of the United States, Canada, or Mexico.
Is my employer required to offer domestic partner health insurance?
No, your employer does not have to offer domestic partner health insurance. even if it offers health insurance benefits to married spouses. the exception to this is in places where it is against the law not to.
In the past, employers who offered domestic partner insurance benefits often did so for the sake of employees in same-sex relationships. after the usa supreme court legalized same-sex marriage across the country, some insurance companies and employers that had previously offered it decided to reduce health insurance benefits for domestic partners. Large employers with more than 10,000 employees were the most likely to continue domestic partner benefits.
However, you can always ask your employer to add domestic partners to your group health insurance plan. Studies have shown that the costs of offering domestic partner health insurance are negligible for most employers.
what is domestic partner health insurance tax?
While health insurance benefits provided to a married spouse are only benefits, the same benefits provided to a domestic partner are considered taxable income for the employee.
if your employer pays any part of your domestic partner’s health insurance premium, then that coverage is taxable and must be reported on your w-2 as imputed income. this amount is the fair market value of what they contributed minus any after-tax contributions made by you, the employee. Because of this, it is valuable to calculate the potential tax burden and compare it to the cost of purchasing separate coverage through an Affordable Care Act health insurance marketplace. the cost could be significantly less, especially if your partner qualifies for a subsidy.
This employer-paid coverage may be tax-free. At the federal level, an exception is made if your domestic partner:
also cannot be a qualifying child of any member of the us. uu. taxpayer. this exception also applies in most states. however, there are some states that do not tax domestic partner health insurance benefits.
what are other options for domestic partner health insurance benefits?
While same-sex marriage is now legal in the United States, more and more people are also in unmarried cohabiting relationships. If you are in a domestic partnership and do not have associated health insurance benefits, you can explore the family health insurance plans available on the market, where some plans will offer domestic partner health insurance benefits. however, the official government recommendation is to include an unmarried domestic partner in a family plan only if they have a child together or will claim their domestic partner as a tax dependent. in some cases, it may be cheaper for both of you to sign up for individual marketplace plans. especially if one or both of you qualify for subsidies.
You can also explore private insurance options outside of the marketplace, but keep in mind that these plans don’t have to offer all of the benefits that the Affordable Care Act gives you.