Taxable Benefits / Same Gender Marriages or Domestic Partners
Current Tax Status of Domestic Partner Benefits:
Tax deductibility of health insurance premiums apply only to an employee, spouse and
legal dependents. If anyone else is covered (i.e. domestic partner) this must be paid for on
an after tax basis. This means that the portion of the employee’s cost that is attributable to
the partners coverage must be either paid for on an after tax basis or if taken out on a pre
tax basis you must include that portion of the pre tax deduction in the employee’s W-2.
The employer portion of the premium, which is attributed to the cost of the domestic
partners coverage, needs to be included as in the employee’s W-2 income. A simple
method of determining the “value” of the domestic partner’s coverage for tax purposes
would be to use the cost of single coverage for the plan of insurance covering them.
Status for Same Gender Spouses:
The same scenario as above will apply on a federal level. On a state level employee and
employer premiums may be paid on a pre-tax basis. We realize this will create headaches
administratively. We suggest you contact your payroll vendor to see what solutions they
may be exploring.
Lastly, it appears as if Flex Account benefits will not be extended to same gender
spouses. We will keep you abreast of this as well as all issues pertaining to this subject.
Please feel free to contact us with any questions you may have.