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 Many large and mid-sized employers are self-insured, which means
their benefits are governed by a 1974 act that has no language on
preventing discrimination based on sexual orientation.
The Employee Retirement Income Security Act allows companies to
bypass differing state laws that complicate healthcare options for
employees spread out across the country.
In a Reuters survey of 60 large U.S. employers, nearly half said
they were already providing benefits to same-sex spouses before the
Supreme Court ruling last month, including 13 that are based in
states where gay marriage was illegal.
While benefits experts see many more companies moving in that
direction, the lack of legal clarity could lead to some notable
holdouts that will test the spirit of the gay marriage ruling.
“This is a great decision by the Supreme Court, but people are wrong
in thinking that the struggle is over and that nothing is left in
the ability to discriminate, because it’s still there,” said Robert
Louis, a senior partner who represents plaintiffs at Saul Ewing LLP
in Philadelphia on employee benefits issues.
 While ERISA requires companies to comply with federal law that
protects employees against discrimination based on race, gender or
religion, there is no language preventing discrimination based on
sexual orientation. The act itself does not specifically address
same-sex marriage.
“ERISA was enacted in the 1970s, and I don’t think it contemplated
anything of that nature,” said Annette Guarisco Fildes, chief
executive of the ERISA Industry Committee, which represents
self-insured employers. She expects many self-insured employers will
ultimately provide the same benefits to same-sex spouses as they do
for heterosexual couples.
The U.S. Equal Employment Opportunity Commission has taken on cases
involving discrimination against gay or transgender employees, but
legal advocates say it needs to update anti-discrimination rules to
include sexual orientation. The agency would not comment on its
future plans.
“We clearly need a federal law that will protect sexual orientation
claims so that the federal courts won’t have to jump through hoops
to do that,” said Randolph McLaughlin, an attorney at Newman Ferrera
LLP. Last year, he represented plaintiffs in a case they ultimately
lost, after a judge ruled that ERISA does not prohibit self-insured
employers from excluding same-sex spouses in their benefit policies.
Some plaintiffs are trying to win by suing employers for violating
existing laws against gender discrimination. One such case was filed
on Tuesday against Wal-Mart Stores Inc <WMT.N> for its previous
policy excluding same-sex spouses from health coverage. Wal-Mart,
the largest private U.S. employer, began offering health insurance
to same-sex spouses last year.
STAYING COMPETITIVE
Executives from companies that provide benefits to gay spouses say
their policy is an important recruiting tool, and also not that
expensive.
“We want to make sure that we’re providing access to as many
individuals and their families as possible,” said Brian Nick,
director of national media relations at Walmart, referring to the
company’s decision to make the benefits available to same-sex
spouses.
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“If we want to attract talent pools, we need to remain open and
inclusive,” said Jamal Kheiry, communications manager for Marathon
Petroleum Corp <MPC.N> headquartered in Ohio, where gay marriage was
illegal until the Supreme Court ruling. The company began offering
same-sex spousal benefits after it first became legal for couples to
wed in individual U.S. states.
Some employment experts expect a significant increase in the number
of self-insured employers that decide to offer same-sex spousal
benefits rather than risk being sued.
“The administrative nightmare to applying this exception would be
worse than granting,” said Julius Turman, a partner at San Francisco
law firm Reed Smith LLP who represents employers in discrimination
claims and other matters.
Others say the future of company policy is less clear-cut.
Jonathan Scruggs, a lawyer with Alliance Defending Freedom, a
conservative Christian nonprofit group, sees ERISA allowing
companies with conservative views on marriage to continue excluding
same-sex couples from their benefits plans. That would change if
ERISA and other federal law is amended to include specific
protection for sexual orientation.
“We have heard initial reservations and disagreement, but have yet
to see definitive action from employers on how to ... avoid or
minimize the impact of the Supreme Court ruling on their benefits
and corporate philosophy,” said Sandy Ageloff, U.S. West division
leader at Towers Watson in Los Angeles, in an email.
Companies that do not want to offer benefits to same-sex couples
could reduce or eliminate benefits for all employee spouses, add a
surcharge for spouses that could receive benefits from their own
employer, or object on religious grounds.
In a highly contentious case that sparked demonstrations on both
sides, privately held craft-store chain Hobby Lobby successfully
argued before the Supreme Court in 2014 that the Religious Freedom
Restoration Act exempted it from covering certain contraceptives for
employees under President Barack Obama’s healthcare law.
Hobby Lobby said in a statement that it is evaluating the gay
marriage ruling and what it means for the company.
(Editing by Michele Gershberg and Matthew Lewis)
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