CHICAGO (The opinions expressed here are those of the author, a columnist for Reuters.)
Something big happened in the world of retirement benefits a year ago today: The U.S. Supreme Court struck down the Defense of Marriage Act.
The court's recognition of marriage equality has transformed life for many same-sex couples. In the realm of retirement benefits, the DOMA ruling opened the door for couples to receive spousal benefits from our two most important social insurance programs, Social Security and Medicare.
Since the ruling, Social Security and Medicare have made substantial changes that benefit same-sex married couples. But there have been complications.
The ruling quickly cleared the way for same-sex couples to be recognized for purposes of federal benefits in cases where couples were married in, or are living in, a state recognizing gay marriage. Most Medicare benefits have also been extended to married couples no longer living in states permitting same-sex marriage. But Social Security hasn’t yet extended benefits to states that don’t permit same-sex marriage because the Social Security Act's definition of a spouse relies on the definitions in the state where an applicant lives.
Here’s where Social Security and Medicare stand a year after DOMA.
The Social Security Administration is processing spousal and survivor claims for benefits in states recognizing same-sex marriage, and it has streamlined the way it handles marriage-based claims involving transgender individuals.
LGBT legal advocates have argued that the SSA also has a legal basis to recognize marriages no matter where a couple lives, but the Obama Administration believes amendments to the Social Security Act are needed, and said last week it will propose legislation to get that done.
Meanwhile, the SSA took an additional incremental step last week as part of a broader federal initiative to extend a wide array of benefits to same-sex couples. It announced that spousal benefits will be extended to married couples living in states that don’t recognize same-sex marriage but have laws that recognize an inheritance right for a same-sex spouse - for example, states that permit civil union or domestic partnership.
In the meantime, experts advise same-sex couples who think they may be eligible for benefits to file for Social Security. That step could qualify couples to receive retroactive benefits if, and when, the state-of-residence issue is resolved.
Gay & Lesbian Advocates & Defenders (GLAD), which played a key role advancing litigation that led to the Supreme Court decision, has published an in-depth guide to benefits for same-sex couples that addresses many key questions about Social Security (bit.ly/1ysmcE2).
Medicare isn’t legally bound by state-of-residence restrictions, so its same-sex reforms have been more extensive than those made by Social Security.
In states recognizing same-sex marriage, same-sex spouses are eligible for all of Medicare’s benefits, including:
- Hospitalization. Medicare Part A is available to individuals who have at least 40 quarters of work history. People who don't qualify pay premiums, but married people qualify for free coverage on a spouse's record. Same-sex couples now qualify for that benefit in same-sex marriage states.
- Delayed filing. Individuals who have health insurance through a same-sex spouse's employer-based insurance can now keep that coverage and delay enrolling in Part B of Medicare past age 65 without facing a penalty. That's an important change, because Medicare imposes stiff penalties for late enrollment: The monthly Part B premiums jump 10 percent for each full 12-month period that a beneficiary could have had coverage but didn't sign up.
If you work for a company with 20 or more employees, the employer's coverage remains primary while you're working. If there are 20 or fewer workers, you should sign up for Medicare at age 65. (Learn more about enrollment timing at Medicare.gov: 1.usa.gov/TejcL2)
- Prescription drug subsidy. Spouses are now eligible for Extra Help, the federal program that helps low-income seniors pay for prescription medications. However, it's worth noting that the income and asset limits for the Extra Help program are higher for married couples, which means some couples who might have qualified individually may not qualify together.
Joint-filing couples could also face Medicare's high-income premium surcharges for Part B and Part D in cases where one spouse's income is high.
People who live in states that don't recognize same-sex marriage, but were married elsewhere, have access to all the above-mentioned with one wrinkle: You cannot get premium-free Part A based on your spouse's work history unless you are in a civil union or domestic partnership and living in a state that recognizes inheritance rights. (This policy was revised just last week as part of the latest round of federal rule changes.)
The rules around which relationships in which states count are complicated, so if you think you might be entitled to benefits, you should apply. And all else failing, you may be able to get a reduction in the amount of the Part A premium. This year the full price for enrollees with 29 or fewer quarters of work is $441 per month; people with 30-39 quarters pay $243 monthly.
“The silver lining there is that it's really rare for someone not to have enough working quarters to qualify for premium-free Part A,” says Stacy Sanders, federal policy director at the Medicare Rights Center. But it's significant for people who are affected.”
A Q&A on Medicare benefits for same sex married couples is available at SAGE USA (bit.ly/1sAfOdz)
For more from Mark Miller, see link.reuters.com/qyk97s
(Follow us @ReutersMoney or here. Editing by Douglas Royalty)