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Health Insurance for Civil Union Couples
On February 19, 2007, The Civil Union Law went into effect. This law established “civil unions” between same-sex couples within the State of New Jersey and provides for the extension of State Health Benefits Program (SHBP) benefits to civil union partners. This benefit will only apply to State employees enrolled in SHBP.
The Civil Union Law provides for the recognition of civil unions formed in New Jersey as well as the states of Connecticut and Vermont. New Jersey also recognizes same-sex marriages performed in Massachusetts, Canada, Belgium, the Netherlands, South Africa, and Spain as Civil Unions. Domestic partnerships formed in California are also recognized in New Jersey.
Domestic partnerships established in Hawaii, Maine, or the District of Columbia and those established in New Jersey prior to February 19, 2007 will continue to be accepted for benefits under the provisions of the Domestic Partnership Act.
After February 19, 2007, same sex couples are permitted to establish a civil union but may no longer enter into a domestic partnership in New Jersey.
Enrollment of a Civil Union Partner for SHBP Coverage
To add a civil union partner to SHBP coverage, the employee must submit the appropriate SHBP enrollment application within 60 days of the date of the civil union. The employee must provide a photocopy of the New Jersey Civil Union Certificate or a valid certificate from another jurisdiction that recognizes same-sex civil unions. If the application is received within 60 days of the date of the civil union, the effective date of coverage will be the date of the civil union. If the application is submitted after the 60 days of the date of the civil union, the employee will have to wait until the next Open Enrollment period.
The New Jersey State Health Benefits Program Application can be obtained from the Office of Human Resources or by following the link to the Division of Pensions and Benefits web site http://www.state.nj.us/treasury/pensions/shbp_forms.htm.
Cost of Coverage for Civil Union Partners
The cost for Member and Spouse and Member and Civic Union Partner will be the same. If the employee also has children enrolled for coverage, the Family level coverage will include the civil union partner at the same cost as if a spouse were covered. As of July 1, 2007, the employee cost was changed to a standard contribution of 1.5% of the annual base salary.
Taxability of the Civil Union Partner Benefit
It is important to note that because the federal internal revenue code does not view a civil union partner in the same manner as a spouse, the cost of a civil union partner’s coverage may be subject to federal taxes (similar to the current tax liability of domestic partners).
The value of the employer health benefits provided to a civil union partner is normally subject to federal income taxes, Social Security, and Medicare taxes as imputed income. This means that the biweekly payroll tax calculation will be based on your gross biweekly pay plus the dollar value of the employer provided health insurance, (i.e., imputed income). Please note that the value of the Civil Union benefit is not taxable under New Jersey law.
If the civil union partner meets the IRS definition of a dependent for tax purposes, the benefit will not be subject to federal taxes. In order to effect this exemption, you must file a tax certification with the Office of Human Resources. The tax certification is available at the web site http://www.state.nj.us/treasury/pensions/shbp_forms.htm. The certificate must be updated annually.
Cobra upon Termination
The federal COBRA law sets minimum standards which an employer can exceed. The SHBP considers a civil union partner as an eligible dependent for coverage and will include them in its COBRA program.
