On May 1, 2014, the United States District Court for the Southern District of New York held in Roe v. Empire Blue Cross Blue Shield that a provision in a self-funded employee health plan, which barred same-sex spouses from participating in the plan, did not violate Section 510 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The plan in question provided spousal coverage, but explicitly excluded same-sex spouses from participating in the plan.
ERISA Section 510 prohibits an employer from discharging, fining, suspending, expelling, disciplining, or discriminating against a participant or beneficiary of its employee benefit plan because the participant or beneficiary pursued his or her rights under the plan. In this case, the plaintiffs were two women legally married in New York State. The defendant employed one of the woman and offered her coverage under its employee health plan. The plaintiffs claimed that the employer-defendant’s refusal to recognize their marriage and extend coverage to the non-employee spouse amounted to discrimination in violation of ERISA Section 510.
The Court ruled that ERISA Section 510 did not extend this far. Instead, ERISA Section 510 merely prohibited an employer from taking an adverse employment action against an employee for asserting his or her rights under an employee benefit plan. The Court observed that ERISA gave employers “broad discretion in writing plan terms,” including the exclusion of same-sex spouses. However, the Court emphasized that its decision hinged on the language in the plan. Therefore, the Court may have ruled differently if the plan both provided for spousal coverage and lacked the explicit same-sex spouse exclusion.
Roe is only the second reported case following the issuance of United States v. Windsor, which as we previously posted here, held that Section 3 of the Defense of Marriage Act of 1996, as amended (“DOMA”) was unconstitutional. The Court distinguished its holding with that of the other reported case, Cozen O’Connor P.C. v. Tobits, on the basis that the plan in Roe expressly excluded coverage for same-sex spouses.
For employers, the Roe decision answers a basic question that, even following Windsor, ERISA does not require a self-funded health plan to cover same-sex spouses. However, employers should be cautioned to not read this decision to mean that such language is above legal challenge. As the court noted, its decision was limited to ERISA Section 510 and did not address whether such a coverage exclusion was lawful under other federal laws or the U.S. Constitution.