CMS Requires Provision Of Nondiscriminatory Coverage For Legally Married Same-Sex Spouses

The Centers for Medicare and Medicaid Services (CMS) has issued a release clarifying that the availability of coverage requirement of the Public Health Service Act (PHSA) requires issuers of health insurance coverage to provide the same coverage to legally married same-sex spouses under the same terms and conditions offered to opposite-sex spouses. In recently released questions and answers, CMS cited PHSA’s implementing regulations, which set forth a prohibition on discriminatory marketing practices and benefit designs.

Background. PHSA Sec. 2702 requires guaranteed availability of coverage by issuers of non-grandfathered health insurance coverage in group or individual markets, including in qualified health plans offered through the health insurance exchanges created by the Patient Protection and Affordable Care Act (ACA). The preamble of the final rule implementing the PHSA states that “discriminatory marketing practices or benefit designs represent a failure by issuers to comply with the guaranteed availability requirements,” and that “a health insurance issuer and its officials, employees, agents, and representatives must not employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals in health insurance coverage based on these factors.”

Coverage for same-sex spouses. In clarifying the meaning of the terms of 45 CFR 147.104(e), CMS states that sexual orientation is one of the factors for which discrimination constitutes noncompliance with the availability regulations. CMS states that an insurer is considered to use discriminatory marketing practices or benefit designs on the basis of sexual orientation if: “(1) The issuer offers coverage of an opposite-sex spouse; and (2) The issuer chooses not to offer, on the same terms and conditions as those offered to an opposite-sex spouse, coverage of a same-sex spouse based on a marriage that was validly entered into in a jurisdiction where the laws authorize the marriage of two individuals of the same sex, regardless of the jurisdiction in which the insurance policy is offered, sold, issued, renewed, in effect, or operated, or where the policyholder resides.”

In essence, according to CMS, while group health plans are not required to provide coverage where an individual would not otherwise be eligible, or to “otherwise interfere with the ability of a plan sponsor to define a dependent spouse for purposes of eligibility for coverage under the plan,” the regulation prohibits issuers from declining to give plan sponsors the option to cover same-sex spouses under the same terms and conditions offered to spouses of the opposite sex.

Because of the confusion, CMS is not requiring compliance for the 2014 coverage year, but expects issuers to comply for policy years beginning on or after Jan. 1, 2015.

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