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Same Sex Marriage Benefits

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Beginning, May 17, 2004 Employees of the City of Medford or the Medford Public School System will be allowed to add his/her same sex spouse, and if applicable, their spouse’s dependent children to their health insurance plan, provided that the employee can provide a copy of the marriage certificate. The following rules and regulations apply to health insurance benefits for both same-sex and opposite-sex married couples:

– Marriage is considered a “change in life status” and any employee who gets married during the plan year has a 30-day enrollment window to add their spouse and if applicable, their spouse’s dependent children, to their health insurance plan.

– If the employee does not complete the enrollment process within this 30-day enrollment window, they will be allowed to enroll their spouse and any applicable dependent children during the Annual Open Enrollment Period.

– If the employee is not already enrolled in a health insurance plan through the Town and then gets married during the plan year, this is not a qualifying event to enroll in a health insurance plan. Health insurance changes due to a “change in life status” may only be made to already existing health insurance enrollments.

Taxation Issues

The inclusion of a same-sex spouse on a family medical policy raises a number of issues relative to taxation and pre-tax benefits. The issues arise due to the fact that same-sex marriage is not recognized under Federal Law. The City of Medford strongly encourages an employee who chooses to enroll his/her same-sex spouse to contact a tax attorney prior to enrollment. The following are issues of which the Town is aware:

– The Internal Revenue Service has determined that your employer’s contribution to your domestic partner’s health premium is taxable income. It is unknown whether the IRS will apply a similar analysis to married same-sex couples. The Town will encourage employee’s to contact their own tax attorney to determine the best way to address the potential of a tax liability associated with this benefit.

– Employees have the option of having their health insurance deductions withheld from their earnings prior to federal income tax being withheld. This option will not be available to couples in a same sex marriage in the same way it is available to opposite-sex married couples. However, the employee may opt to have the equivalent to the individual plan health insurance deduction withheld on a pre-tax basis. The balance would then be withheld separately after federal taxes are applied to earnings. However, an employee with a same-sex spouse and dependent children may opt to have the entire family health insurance deduction withheld pre-tax if the at least one of the dependent children can be claimed as a dependent by the employee for federal tax purposes.

– The City of Medford offers a Flexible Spending Plan that allows employees to have a predetermined amount of money withheld from their pay pre-tax to pay for medical and dependent care expenses for themselves or for eligible family members. An employee cannot use the Flexible Spending Program for medical expenses incurred by his/her same-sex spouse. Applicable Medical expenses for this program would be those expenses incurred by the employee and/or any dependent child(ren) that can be claimed by the employee for federal tax purposes. An employee cannot use the Flexible Spending Program for dependent care expenses incurred by the dependent of his/her same-sex spouse unless they can be claimed as a dependent by the employee.