Second principle for universal coverage: Treat Covered Relationships Equally
There is no national right to health insurance, and the federal Employee Retirement Income Security Act (ERISA) prohibits states from requiring that employers provide health insurance. Nonetheless, numerous laws encourage and shape job-based coverage through taxes, fines, and continuing coverage rules. Some examples:
- The IRS does not collect income taxes on the money that companies or workers spend on premiums for job-based health insurance, thus lowering the total cost of coverage.
- Several states give employers the option of either providing insurance or paying into a fund that is used to subsidize insurance for non-covered workers.
- Under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), people may stay on their employer’s group plan by paying the full premium (both the employer’s and the beneficiary’s share) for up to 18 months after a “triggering event” makes them ineligible for the job-based coverage. Although COBRA applies only to employers with 20 or more employees, 41 states have COBRA-like laws that apply to smaller employers.
None of these laws currently takes into account the increasing prevalence of coverage for non-marital relationships. As a result, unmarried partners pay more for coverage, and lose coverage more often, than spouses do.
- The IRS should exempt domestic partner or plus-one benefits from income taxes. COBRA should require continuing coverage for everyone who is on a job-based plan. (Over 120 of you wrote to Congress urging them to update COBRA during the stimulus package debate.) These changes require acts of Congress, because the Defense of Marriage Act prevents federal agencies from extending spousal benefits to non-spouses. Congress should repeal the Defense of Marriage Act.
- State COBRA-like laws should require that all insured beneficiaries have equal access to continuing coverage.
- State “pay or play” health reforms should make employers who cover spouses but not unmarried partners contribute to state funds to subsidize insurance for those partners.
