Will My Illinois Health Insurance Now Cover a Party to a Civil Union?

After Illinois’ recent passage of the Religious Freedom and Civil Union Act, some Chicago and Illinois workers are wondering whether their partners in a civil union will now be covered under health insurance. As is often the case, the answer is maybe. The Illinois law provides couples in a civil union with the same rights and benefits as those that married couples have. What is critical, however, is whether the health insurance plan is one that is covered by ERISA or not.

Under section 3(1)(B) of ERISA, a covered welfare plan is “any plan, fund, or program . . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries . . . any benefit described in section 186(c) of this title . . . .” Health care is a benefit described in section 186(c). Also important is that ERISA preempts “any and all State laws insofar as they relate to any employee benefit plans”. ERISA § 514(a). However, ERISA’s savings clause excepts from coverage under ERISA any State law regulating insurance. ERISA § 514(b)(2)(A).

So if you buy private health insurance in Illinois, the Civil Union Act will apply to your health insurance. In addition, if you are covered by group health insurance at work, and your employer pays premiums to an insurance company for the coverage, the Civil Union Act will also apply because the State law is not preempted as applied to such group health insurance under Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. 724 (1985). If, however, your employer provides health coverage, but the employer maintains a self-funded plan–typically only seen with large employers–then the employer is free to choose whether to cover same sex partners or not. Because such self-funded health care plans are squarely ERISA plans, they need not incorporate a party in a civil unions in their definitions of “spouse”.

It is often difficult to tell whether your employer has a self-funded plan or not, because it will still charge you for the coverage, and usually have an insurance company administer the plan, making it appear just like the employer buys the coverage. If you need to know whether your employer’s health care plan is governed by ERISA and whether it must cover partners in a civil union, contact an experienced ERISA lawyer.