May 25, 2011
Illinois Religious Freedom Protection and Civil Union Act Takes Effect June 1
Please note that this summary is for informational purposes and is not intended to be legal advice or relied upon as such.
The new Illinois Religious Freedom Protection & Civil Union Act (Public Act 96-1513) takes effect June 1, 2011. While this is not an insurance act, it does afford same sex and opposite sex couples entering into a civil union, the same obligations, responsibilities, protections and benefits afforded or recognized by the law of Illinois to spouses.
Under the Act, a person is a “party to a civil union” if they establish a civil union under a licensing process established by the Illinois Director of Public Health. This process includes obtaining a license from the county clerk’s office, paying appropriate fees, having the ceremony performed within 60 days of the date of the license, and returning the certified license to the clerk’s office. Illinois residency is not an explicit requirement, and Illinois will recognize civil unions or substantially similar unions entered into in other states with similar laws.
Guidance published by the Cook County Clerk's office recognizes health insurance in a list of benefits that a party to a civil union is entitled to under law. The new law provides that a "party to a civil union" is to be included in any definition used in state law where the term "spouse," "family” or other terms that denote "spousal relationship" are stated.
BCBSIL Business Decisions
Blue Cross and Blue Shield of Illinois (BCBSIL) has made the following business decisions for its policies and employer plans that currently cover dependent spouses and dependent children:
- Generally, a civil union will be treated from an operational and claims processing perspective the same as a traditional marriage.
- For group coverage, it is the employer group’s responsibility to determine eligibility, just as it is currently.
- Parties to civil unions will be eligible for coverage if the policy or employer plan covers spouses in marriage for:
- BCBSIL fully insured individual and group business, including HMOs, and
- Self-funded state municipalities, school districts, counties, church plans and other non-ERISA plans (the “non-ERISA ASO groups”), just as most insurance laws would typically apply to these entities.
- Although the law provides religious organizations the freedom to choose not to officiate or solemnize a civil union based on their religious practices, as an employer, religious organizations are required to extend benefits as mandated by law.
- All other self-funded ASO business will have the option to choose to provide coverage to dependents who are parties to a civil union. If coverage is elected, it will automatically include coverage for dependent children of a civil union. The ASO Benefit Program Application (BPA) will be updated to define and accommodate the civil union coverage election and confirm the employer’s responsibility for its decision. It is the employer’s choice.
- The law will extend to BCBSIL contracts issued and delivered in Illinois, regardless of where the member resides.
Civil Union Coverage
BCBSIL will provide civil union coverage as follows:
- For insured business and non-ERISA ASO groups, coverage will be available to a party to a civil union and dependents upon the BCBSIL member entering into a civil union on or after June 1, 2011, similar to a qualifying life event. If the member does not elect to change his or her coverage within 31 days of entering into a civil union, the next opportunity will be upon the employer group’s open-enrollment period. For group coverage, it is the employer group’s responsibility to determine eligibility, just as it is currently.
- BCBSIL has the flexibility to offer ASO ERISA customers (that choose to provide coverage for civil unions) the option to offer coverage to a party to a civil union and dependents either as of June 1, 2011, or upon their renewal as of June 1, 2011, and thereafter.
- For plans/policies that are implementing civil union coverage, existing BCBSIL members who have previously entered into a civil union as legalized by another state are able to add their party to a civil union and dependents upon the employer group’s next open enrollment as of June 1, 2011, and thereafter.
Changes to BCBSIL Documents
There are no changes to any of BCBSIL health or dental benefit plan designs. There will not be any changes to the majority of our business forms or collateral materials (such as highlight sheets, product reference guides, applications, etc.). Listed below are contractual documents that are undergoing enhancements as a result of the new law:
- Insured (including HMO and Dental HMO) and ASO Certificate Booklets (if applicable) – The civil union definition will be added; the updated eligibility will indicate that civil union applies to all provisions pertaining to a spouse unless otherwise noted; a new section on continuation coverage options available to parties of a civil union will be added.
- Insured BPAs and ABS – The new civil union coverage statement indicating that a party to a civil union and his or her dependent children are automatically eligible to enroll for coverage, and once enrolled, he or she is eligible for continuation of coverage.
- ASO BPAs and ABS –
- A section is added for self-funded state municipalities, school districts, counties, church plans and other non-ERISA plans to self-identify and acknowledge that a party to a civil union and his/her dependents are automatically eligible to enroll for coverage, and once enrolled, eligible for continuation of coverage.
- For all other ASO groups, an option is added where they can elect to cover civil unions and elect to offer continuation benefits.
- Insured Group Administration Document (GAD) – The "Covered Person" definition is revised to refer to the definition in the Certificate booklet.
The insured documents must be filed with the Illinois Department of Insurance (IDOI). Upon approval, riders will be sent to members, and the updated BPAs and GAD will be placed into production.
COBRA and Other Continuation Coverage
Because federal law does not recognize parties to a civil union, they are not entitled to continuation election rights under COBRA (the Consolidated Omnibus Reconciliation Act of 1985). The following continuation scenarios apply for employees and parties to a civil union:
- For insured business, if the qualifying event results in the employee having an election right (such as termination of employment or reduction of hours), either Illinois State Continuation or COBRA (if the account has 20 or more employees) can be chosen. For Illinois State Continuation, the member's spouse/party to a civil union and dependent children will be eligible for coverage if there is family coverage at the time of the event. For COBRA, the member's spouse and dependent children will be eligible for coverage if there is family coverage at the time of the event, but not a party to a civil union.
- For insured business, if the election right is that of the former party to a civil union or dependent (such as a divorce, dissolution of civil union or death of the employee), the Illinois State Spousal or Dependent Continuation options are available.
- For ASO business, again depending on who has the election right, the employee can opt for COBRA and the former party to a civil union can opt for COBRA-like continuation if made available by the employer group.
Because federal law does not recognize civil unions, employer-provided health coverage for an employee's civil union family members is generally taxable to the employee. Employers should contact their personal tax advisors for information. The employer, and not BCBSIL, is responsible for providing notice of possible tax implications to those covered employees with coverage for their civil union families.
The IDOI is expected to issue an insurance FAQ on the law and BCBSIL will make any appropriate adjustments based on the IDOI’s direction.
If you have additional questions or comments, please contact your BCBSIL representative.