Lawyers from the firm McDermott Will & Emery said in an alert on the Association for Corporate Counsel Web site that because civil union partners will have the same rights as spouses under state law, many religious organizations’ benefit plans could be affected. Determining whether coverage of civil union partners is required hinges upon the type of benefit plan, whether the benefit is insured, and whether the plan is subject to the Employee Retirement Income Security Act, they noted.
Plans maintained by religious organizations that do not qualify as church plans, and plans that otherwise qualify as church plans but have opted into ERISA by making a Code Section 410(d) election, are subject to ERISA, which contains a broad pre-emption provision, under which all state laws applicable to employee benefit plans are pre-empted by federal law. Therefore, a plan governed by ERISA would not be subject to the Illinois civil union law and would not be required to provide death benefit coverage or joint and survivor annuity protection to civil union partners of employees.
Plans that have not made a Section 410(d) election to be covered by ERISA are subject to state law, and any benefits provided to spouses under that plan would also need to be provided to civil union partners in order to comply with the new Illinois civil union law, the attorneys said.
In addition, whether civil union partners must be offered coverage under health and welfare plans sponsored by religious employers depends largely on whether plans are insured (i.e., benefits are partially or fully provided by insurance companies) or self-insured (i.e., benefits are paid from the general assets of the employer). Self-insured plans are not subject to Illinois state insurance law, which after June 1, 2011, will require insurance contracts that provide coverage to spouses to also cover civil union partners.
Self-insured plans have the flexibility to provide coverage to any parties prescribed under the plan document and will not be required to provide coverage for civil union partners, unless the employer chooses to amend its plan to do so. This is true both for non-“church” plans, which are subject to ERISA, as well as church plans, which, depending on whether the sponsoring employer has elected to be subject to ERISA under Internal Revenue Code (the Code) Section 410(d), may be exempt from ERISA.
The Illinois Catholic Health Association, which includes Catholic Hospitals and other health care institutions in Illinois, sent a memo to its members on May 9 suggesting that they offer “employee plus one” benefit packages instead of “employee plus spouse” benefit packages, starting on June 1, 2011, the Rainbow Sash Movement announced in a press release. This will allow employees to buy into a health benefits package that would provide coverage for themselves and one other person living with them.
“This person could be a sibling, relative, etc., the exact relationship would not need to be disclosed,” said Patrick Cacchione, the Health Association Executive Director, according to the press release.