Same-Sex I-Dos Make Insurers Grapple With The How-Tos

When asked whether they would honor a request that a qualified retirement plan recognize a same-gender spouse, 13.6% of respondents said yes; 43.4%, no; and, 43% said that they did not know.

If the AON Consulting survey suggests that companies are still trying to figure out what the change in the law might mean for them, experts in Massachusetts confirm that there are many details that a gay couple marrying in Massachusetts must consider.

Ellen Wade of Wade & Horowitz, Brookline, Mass., described some of the nuances that gay couples will have to consider if they marry. Wade and her new spouse, Maureen Brodoff, were one of the couples that were part of the suit.

One question, she said, is the "big uncertainty" created by differences in federal and state law and how those differences will affect gay couples who marry.

For instance, the availability of health benefits for a spouse would depend on points such as the size of a company and whether that company is subject to federal ERISA laws or not, she says.

If a company does decide to offer such benefits, she continues, the employer cannot deduct the premiums for the spouse as with domestic partnership coverage.

A side effect could be that a lot of companies will phase out domestic partnership benefits affecting both gay and straight couples who do not wed, Wade notes.

If a gay couple divorces and alimony is involved in the agreement, according to Wade, the alimony payments would be deductible for purposes of Massachusetts state taxes but would not be deductible for federal state taxes, she continues.

With the right to marry, Wade says, there will be an exemption from Massachusetts estate tax but not from federal estate tax, she says.

Kurt Steinkrauss, an attorney with Mintz Levin Cohn Ferris Glovsky & Popeo PC, Boston, says that the Defense of Marriage Act of 1996 has indeed created differences between state and federal law concerning gay marriage. While married straight couples are entitled to up to a $1.5 million exemption on the amount taxed, gay couples would not be entitled to the exemption currently available for 2004, he says.

So, even post-May 17, 2004, when Massachusetts gay couples could start going down to City Hall to get married, gay couples need good estate planning, he continues. Consequently, he says, life insurance remains an important tool in ensuring both spouses are properly protected. "My concern," Steinkrauss says, "is that it will create a false sense of security."

Reproduced from National Underwriter Edition, July 1, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.