Domestic Partner Health Insurance: How Does It Work?.
One benefit married people have is the ability to be on the same health insurance in many cases.
This benefit hasn’t always extended to domestic partners.
Thankfully, some states now recognize domestic partnerships.
In general, a domestic partnership is when two people aren’t legally married but live together in a committed relationship.
These partnerships can be same-sex couples or opposite-sex couples.
Being part of a domestic partnership may give you certain benefits depending on where you live.
Each state has different laws regarding this. You’ll have to check with your state’s laws to be sure.
Same-sex couples may use a state’s domestic partnership laws to gain benefits they may not otherwise be able to access.
In other cases, opposite-sex couples that don’t want a legal marriage may also use domestic partnership laws to access some benefits.
One common question domestic partners have is whether they can access domestic partner health insurance together.
This may help domestic partners simplify their lives or save money.
It may make sense to consult an expert, such as a lawyer, before seeking out coverage. This can help you avoid any unintended consequences.
This is especially true for same-sex couples.
Many states do not have anti-discrimination laws in place.
If you live in one of these states, you could put your job at risk by asking about same-sex domestic partner benefits.
That said, here’s some general information about what you need to know.
What is Domestic Partner Health Insurance?
Domestic partner health insurance covers both you and your domestic partner.
Having access to domestic partner benefits isn’t guaranteed, though.
Laws may vary
Instead, accessibility to this benefit is governed by state laws.
In some cases, states may not have laws, but localities do.
This can be confusing and extremely frustrating to figure out.
If your area’s laws allow domestic partner health insurance, your employer may also offer the coverage.
Each employer and health insurance company may have slightly different rules.
You generally have to confirm certain information to qualify for domestic partner health insurance.
A health insurance company may make you sign an affidavit saying certain things are true.
Examples of things you must attest to could include:
- Neither of you being in a married couple
- Neither of you being in a legal civil union
- You both live in a committed, monogamous, nonplatonic family-type relationship
- The intention to continue your relationship indefinitely
- You’ve lived together for a specific time period
- Neither of you has been divorced in a certain time period
- Neither of you has been part of an annulment in a specific time period
- Neither person is a dependent on another policy
- You both jointly share financial responsibility for basic living expenses
- Both people are at least 18
- Both people are mentally competent to enter into a contract
- Both people aren’t related by blood that would disqualify a marriage in a state
For tax purposes, only your portion of the health insurance costs paid by your employer is income tax-free.
If your employer pays any part of your domestic partner’s health insurance premiums, that will result in taxable income to you.
You don’t get this money added to your paycheck.
Instead, the cost the employer pays is added to your gross income only. It does not appear in your net pay.
This results in you paying tax on that benefit without receiving any cash.
The IRS may allow these benefit payments to be tax-free. To qualify, your domestic partner must qualify as a dependent.
Consult the IRS rules regarding who can be a dependent to learn more.
Benefits of Being on the Same Health Insurance Plan
Being on the same health insurance plan as your domestic partner can have benefits.
One plan to keep track of
One of the most significant benefits of having health insurance together is only having one health insurance plan to keep track of.
The premium payments only come out of one spouse’s paycheck if it is a workplace plan.
If the plan was purchased on the marketplace, you only have to make one payment instead of two.
Once you understand the policy, you can apply how it works to both people.
You don’t have to learn two policies and then try to remember which rules apply to which policy.
Can visit same network of providers
Another benefit of being on the same policy is using the same provider network.
You can easily learn which providers are in-network and out-of-network.
You won’t have the possibility of getting confused with multiple plans and multiple networks.
This makes accidentally scheduling an out-of-network visit much less likely.
Partners can share whether they like a provider before the other partner schedules a visit, too.
May result in lower overall costs
Health insurance plans and their costs vary from plan to plan.
Premiums may be cheaper for a couple on one plan than two individual plans.
Of course, this depends on the plan, your alternatives, and how you use your health insurance.
That said, other costs could be increased.
You’ll have to run the numbers to see if this is beneficial based on your specific situation.
This involves making estimates of your future healthcare use and costs.
One fee structure to keep track of
When you have two health insurance plans, each plan has its own deductibles, co-pays, and co-insurance to keep track of.
This can cause headaches. This is especially true at the beginning of the year when deductibles reset.
A health insurance plan for a couple may have an individual deductible per person and a plan deductible per family.
This could be considered a bit more complex than two separate plans with separate deductibles.
However, both partners would pay the same co-pays and co-insurance amounts based on one plan’s document.
This should make keeping track of health insurance bills easier.
It should also make it easier to plan for your future healthcare costs.
Health Insurance Options If You Can’t Get on the Same Plan
You may not have an option to get on the same health insurance plan as your partner.
If that’s the case, here are some alternatives you may want to consider.
Employers may offer coverage that is more subsidized for employee health insurance than family health insurance plans.
Suppose you live in a domestic partnership where both people work. Each partner may be best off on their own health insurance plans with their separate employers.
Unfortunately, not all employers offer health insurance as a benefit.
If this is your situation, consider the following options.
Health insurance marketplace
The health insurance marketplaces allow individuals to purchase health insurance coverage.
If you don’t qualify for a family health insurance plan, this may be an option.
Some states run their own health insurance marketplaces. In that case, you’d have to visit your states’ marketplace to shop for coverage.
Other states may not run their own exchanges.
In these situations, you visit Healthcare.gov to shop for coverage. The federal government runs this site.
The marketplace should help you determine if you qualify for tax credits. These tax credits can lower the cost of these plans.
Make sure to read the rules for inputting income information carefully. This can help you determine whether you need to include your domestic partner’s income.
Health insurance agents or brokers
Health insurance agents or brokers may be able to help you find the perfect health insurance plan.
Health insurance agents work for a single company. Brokers can offer plans from multiple companies.
Ideally, a broker would give you more health insurance options and a better chance of finding the best plan.
Agents and brokers can answer any questions you have about obtaining health insurance.
They may also be able to answer questions about your particular situation with your domestic partner.
Medicaid is an affordable health insurance plan run by each state.
People with low incomes or specific disabilities may qualify for Medicaid.
Because the program is run by each state separately, the qualifications vary by state.
Check with your state to see if you qualify for Medicaid.
Be sure to check if they have any rules regarding domestic partnerships, as well.
Consult an Expert
Domestic partnership and health insurance benefits can be complex. Rules often vary by state.
Some states don’t have anti-discrimination laws based on sexual orientation.
Make sure you don’t face any unintended consequences before you seek out coverage.
To do this, you may want to consult an expert.
Consider consulting a lawyer in your area. They can help you understand your rights in your state and any unintended consequences you may face.
This way, you can make an informed decision about what actions to take.