Updated: Feb 9
-What is a domestic partnership and a civil union?
-What employee benefits including health insurance may I qualify for?
-How much is health insurance on average through an employer?
-How much is health insurance on average through Obamacare?
This week we’re going to talk about domestic partners and civil unions and if you happen to be involved in these relationships, there are benefits that you can take advantage of.
The definition of a domestic partnership is when two people live together and are involved in an interpersonal relationship living their life as if married.
Now this different than a civil union which grants same sex couples the ability to enter into a legally recognized relationship. Hence, they are granted the same rights in principle as traditional married couples.
With that being said civil unions offer some of the same rights and responsibilities as marriage; however, they vary from state to state and apply only on a state level.
There are five states that recognize civil unions: Colorado, Hawaii, Illinois, Vermont and New Jersey.
As for domestic partnerships California, District of Columbia, Maine, Nevada, Oregon, Washington and Wisconsin allow for domestic partnerships while Hawaii allows for a similar relationship known as reciprocal beneficiaries.
For the most part states abolished civil unions due the supreme court declaring this unconstitutional with the case of Obergefell v. Hodges in 2015
So here’s one last piece which is that civil unions and domestic partnerships are not recognized by the IRS in being able to file jointly on tax returns.
And now that we got that out of the way, how can these couples benefit?
This is a topic that we thought about the other day when it comes to employer benefits, namely health insurance.
Before you even get started it is important to make sure that you qualify by asking your employer. If you have the green light most likely you will have to prove you have a domestic partner or have civil union.
There’s a probable chance that you will be required to sign a form provided by the health insurance administrator or employee benefits plan administrator where you have the validate the following:
Cindy That you've had a regular and permanent residence for at least six months or perhaps a year and with the intent to keep the living situation in place.
That both people are no less than 18 years old.
David That both partners are jointly responsible for living expenses for items such as paying rent or a mortgage, general expenses and other items such as food. More than likely this documentation will need to be provided.
That you and your partner are known as being in a relationship in the public eye. (Not sure how that is validated)
Cindy This is an obvious one . . where you have to prove that you don't have a domestic partner, civil union or a marriage to somebody else.
That one is a little goofy to prove as well. Perhaps a search has to be performed in a state database showing no results of any other partnership.
David So this means that two men, or two women, or a man and a woman, can all be considered as domestic partners. Technically our two sons could buy a house together and split the bills and again prove that they were a couple somehow in the community referencing that other point a few seconds.
Cindy So here’s some common benefits that may be applicable as well such as sick leave, relocation expenses, access to company property, and permission to attend employee functions.
David Okay so perhaps the primary piece of having a domestic partner or a civil union for insurance purposes is the health insurance portion.
Cindy So let's face it, health insurance especially if you're paying for it on your own through the health exchange and/or Obamacare. It is very expensive in this country and in fact, we covered this in a similar topic in Podcast #16, Shopping For Your Surgeries.
David This where we talked about researching your doctors and technically shopping for your medical needs. Do you remember that in my case I saved 10 times what I would have paid normally by researching diagnostic codes and choosing a different medical facility?
So with that being said let's throw out some stats around Obamacare.
This is statement taken from AARP:
Cindy While the average medical premiums dropped in both 2019 and 2020, they are up, overall, since 2016. The average monthly premium for a benchmark plan (the second-lowest-cost silver plan) in 2020 is $388 for a 27-year-old enrollee and $1,520 for a family of four.
Keep in mind that these are monthly plans. So to put this in perspective, absent of copays, prescriptions and deductibles, the 27-year old person would pay $4,656 a year and the person with a family of four, which is very common in this country, would pay $18,240.
That is insane!
David Okay as for employer sponsored health insurance, according to research published by the Kaiser Family Foundation in 2019, the average annual worker premium contributions for family coverage is $6,015 and that doesn't account for copays, prescriptions and deductibles as well.
CIndy So if we compare the cost of having an employer-sponsored plan versus Obamacare for a family plan, it is $12,225 more expensive. Again, that is insane!
I do recall that you had a friend that put her boyfriend on her medical insurance plan?
Cindy Yes. She was in Indiana and that state is not in the lists that we mention.
David So this shows that you need to check with your employer before determining that you do not qualify.
Okay so that was a lot of information so I think it is time we do the recap.
Cindy #1 Domestic partnerships and civil unions are similar in nature; however, not all states recognize them or have the same exact rules so please do your homework to see if you qualify.
David #2 Keep in mind that the IRS does recognize a civil union and domestic partnerships to be able to file taxes as a joint return.
Cindy #3 Employers may offer similar benefits as those that are married such as sick leave, relocation expenses, access to company property, and permission to attend employee functions.
David #4 So check with your employer to see if these benefits are available to you and if so you will have to go through some validation through documentation by proving that you are in a domestic relationship or a civil union.
Cindy #5 As we just went over in detail, by the numbers and by a wide margin, it is clear that having an employer-sponsored plan for insurance is much less expensive than going through the Healthcare Exchange / Obamacare. David So you can see that if you don't qualify through your employer you might just want to get married because you're going to feel like you're rich when you see all the money that you can save. Haha!