Did the New Health Law Effectively Institute a New Tax on SS Couples?

[Una_Persson]

My company tells me that they have had to change their policy as a result of the Patient Protection and Affordable Care Act of 2010, such that same sex couples can no longer pay for their health coverage pre-tax, only legally married couples are allowed to do so. Given that our health insurance has increased by about 15-40% in one year (which again is blamed on the new law), this could represent an additional tax on SS couples measuring in the hundreds to thousands of dollars per year.

Without any snark about Obama, etc., was there indeed a change as a result of the Patient Protection and Affordable Care Act of 2010 which is sandbagging SS couples?

[elfkin477]

It doesn’t address whether or not this is a new tax, but this law page states

Domestic Partnership Benefits: Effective August 3, 2009, the domestic partnership provisions of the budget bill extended certain rights to domestic partners. Although these provisions do not require public employers to extend health care benefits to the domestic partners of their employees, many employers do so voluntarily. In addition, some employers may be required to provide domestic partner benefits. For example, the Dane County Domestic Partner Equal Benefits Requirement, which is currently in place, mandates that employers provide equal benefits for domestic partners if the employer has a contract with the County for $5,000 or more. If an employer does provide domestic partner benefits—whether by choice or by mandate—there may be certain situations in which the value of the benefits is taxable to the employee and pre-tax earnings may not be used to pay for such benefits.

And

In general, employers may provide health insurance to their employees and employees’ spouses and dependents on a tax-free basis. This is due to a specific exemption in the Code. (Without this exemption, the value of the benefits would be treated as taxable compensation.) As part of this exemption, the Code defines “spouse” and “dependents.”
Spouses: Generally, an employee’s spouse qualifies under the Code if he or she is considered a spouse under state law. However, under federal law, a same-sex spouse does not qualify as a spouse under the Code, regardless of whether the same-sex spouse is considered a spouse under state law. Nevertheless, a same-sex spouse may qualify as a dependent under the Code if he or she meets the criteria discussed below.

So, it looks like your employers didn’t make it up. You’ve got to love unintended consequences like this, though, since it’s unlikely the law was designed to screw same sex couples…

[Una_Persson]

I see. Thank you, but I’m a bit confused - it almost seems like it wasn’t the Patient Protection and Affordable Care Act of 2010 alone which did it, but a combination of laws passed by Obama in 2009 and 2010?

[Roderick_Femm]

I pay for my partner’s medical coverage through my company, and it has always been after-tax. We’re not married, just domestic partners. Not sure if legal marriage would have changed that.
Roddy