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 Something big happened in the world of retirement benefits a year
ago today: The U.S. Supreme Court struck down the Defense of
Marriage Act.
The court's recognition of marriage equality has transformed life
for many same-sex couples. In the realm of retirement benefits, the
DOMA ruling opened the door for couples to receive spousal benefits
from our two most important social insurance programs, Social
Security and Medicare.
Since the ruling, Social Security and Medicare have made substantial
changes that benefit same-sex married couples. But there have been
complications.
The ruling quickly cleared the way for same-sex couples to be
recognized for purposes of federal benefits in cases where couples
were married in, or are living in, a state recognizing gay marriage.
Most Medicare benefits have also been extended to married couples no
longer living in states permitting same-sex marriage. But Social
Security hasn’t yet extended benefits to states that don’t permit
same-sex marriage because the Social Security Act's definition of a
spouse relies on the definitions in the state where an applicant
lives.
Here’s where Social Security and Medicare stand a year after DOMA.
SOCIAL SECURITY
The Social Security Administration is processing spousal and
survivor claims for benefits in states recognizing same-sex
marriage, and it has streamlined the way it handles marriage-based
claims involving transgender individuals.
LGBT legal advocates have argued that the SSA also has a legal basis
to recognize marriages no matter where a couple lives, but the Obama
Administration believes amendments to the Social Security Act are
needed, and said last week it will propose legislation to get that
done.
Meanwhile, the SSA took an additional incremental step last week as
part of a broader federal initiative to extend a wide array of
benefits to same-sex couples. It announced that spousal benefits
will be extended to married couples living in states that don’t
recognize same-sex marriage but have laws that recognize an
inheritance right for a same-sex spouse - for example, states that
permit civil union or domestic partnership.
In the meantime, experts advise same-sex couples who think they may
be eligible for benefits to file for Social Security. That step
could qualify couples to receive retroactive benefits if, and when,
the state-of-residence issue is resolved.
Gay & Lesbian Advocates & Defenders (GLAD), which played a key role
advancing litigation that led to the Supreme Court decision, has
published an in-depth guide to benefits for same-sex couples that
addresses many key questions about Social Security (http://bit.ly/1ysmcE2).
MEDICARE
Medicare isn’t legally bound by state-of-residence restrictions, so
its same-sex reforms have been more extensive than those made by
Social Security.
In states recognizing same-sex marriage, same-sex spouses are
eligible for all of Medicare’s benefits, including:
- Hospitalization. Medicare Part A is available to individuals who
have at least 40 quarters of work history. People who don't qualify
pay premiums, but married people qualify for free coverage on a
spouse's record. Same-sex couples now qualify for that benefit in
same-sex marriage states.
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- Delayed filing. Individuals who have health insurance through a
same-sex spouse's employer-based insurance can now keep that
coverage and delay enrolling in Part B of Medicare past age 65
without facing a penalty. That's an important change, because
Medicare imposes stiff penalties for late enrollment: The monthly
Part B premiums jump 10 percent for each full 12-month period that a
beneficiary could have had coverage but didn't sign up.
If you work for a company with 20 or more employees, the employer's
coverage remains primary while you're working. If there are 20 or
fewer workers, you should sign up for Medicare at age 65. (Learn
more about enrollment timing at Medicare.gov:
http://1.usa.gov/TejcL2)
- Prescription drug subsidy. Spouses are now eligible for Extra
Help, the federal program that helps low-income seniors pay for
prescription medications. However, it's worth noting that the income
and asset limits for the Extra Help program are higher for married
couples, which means some couples who might have qualified
individually may not qualify together.
Joint-filing couples could also face Medicare's high-income premium
surcharges for Part B and Part D in cases where one spouse's income
is high.
People who live in states that don't recognize same-sex marriage,
but were married elsewhere, have access to all the above-mentioned
with one wrinkle: You cannot get premium-free Part A based on your
spouse's work history unless you are in a civil union or domestic
partnership and living in a state that recognizes inheritance
rights. (This policy was revised just last week as part of the
latest round of federal rule changes.)
The rules around which relationships in which states count are
complicated, so if you think you might be entitled to benefits, you
should apply. And all else failing, you may be able to get a
reduction in the amount of the Part A premium. This year the full
price for enrollees with 29 or fewer quarters of work is $441 per
month; people with 30-39 quarters pay $243 monthly.
“The silver lining there is that it's really rare for someone not to
have enough working quarters to qualify for premium-free Part A,”
says Stacy Sanders, federal policy director at the Medicare Rights
Center. But it's significant for people who are affected.”
A Q&A on Medicare benefits for same sex married couples is available
at SAGE USA (http://bit.ly/1sAfOdz)
For more from Mark Miller, see http://link.reuters.com/qyk97s
(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance.
Editing by Douglas Royalty)
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