Benefit Options for UW Employees with Domestic Partners

Legalization of Same-Sex Marriage in Wisconsin

On October 6, 2014, the U.S. Supreme Court denied review of the Wolf v. Walker case. This is the case in which the U.S. District Court for the Western District of Wisconsin and the Seventh Circuit Court of Appeals ruled unconstitutional the provision in the Wisconsin Constitution (art. XIII, § 13) that recognizes only opposite-sex couples' marriages. As a result, same-sex marriage is now legal and recognized in Wisconsin.

ETF has compiled a FAQ about the effect on ETF-administered benefit programs to assist members and employers. Marriage is a qualifying life event and may afford you benefit change opportunities.

Domestic Partnership

A Chapter 40 domestic partnership (same-sex or opposite sex) is authorized by Wisconsin State Statute (Wisconsin Statute § Chapter 40) and allows you to add your domestic partner and his/her dependents to all benefits plans that are administered by Employee Trust Funds (ETF) and offer family coverage. A Chapter 40 Domestic partnership also extends to University of Wisconsin System Administration (UWSA) plans that offer family coverage.

Domestic partners must meet all of the following conditions:

Creating a Domestic Partnership and Applying for Benefits

Submit a notarized Affidavit for Domestic Partnership, ET-2371 to ETF. For benefit purposes, a domestic partnership does not become effective until the date ETF receives your Affidavit of Domestic Partnership, regardless of how long your relationship has been in effect.

Retain a copy of the notarized affidavit for your records.

You may want to consider filing benefit applications with your campus benefits office so that you have coverage while the affidavit is being processed by ETF. It is possible that you could have coverage for yourself prior to coverage being available for your domestic partner and his/her dependents.

ETF will send you an acknowledgement letter indicating the effective date of your domestic partnership. You have 30 days from the effective date of the partnership to submit new applications for any plans enrolling your domestic partner and his/her dependents. When you submit the applications to your benefits office, you must include a copy of the ETF acknowledgement letter. Retain copies of these documents for your records.

You are not required to create a domestic partnership to claim medical and/or dependent day care expenses incurred by your same-sex spouse or spouse's children in the Flexible Spending Accounts (FSA) program.

Even if you do not intend to add your domestic partner to any of your benefit plans, you may want to consider submitting an Affidavit for Domestic Partnership to ETF. You must have established a Chapter 40 domestic partnership with ETF for your domestic partner to be eligible for certain benefits in the event of your death. A domestic partnership cannot be established after the death of the employee or the domestic partner.

Tax Consequences

If you add a dependent to your health insurance plan who does not qualify as a tax dependent under the Internal Revenue Code section 152 and Notice 2010-38, the Fair Market Value of the employer contribution toward that coverage is considered a taxable fringe benefit (known as imputed income) and subject to tax withholding. Imputed income increases your taxable income, increasing taxes withheld from your pay and decreasing your take-home pay.

You can estimate the monthly imputed income by using the tables at Imputed Income and Health Insurance Benefits. The tables estimate monthly imputed income based on the Fair Market Value (FMV) of each health plan and the number of non-tax dependents covered. The FMV amounts are adjusted annually.

If you are legally married to your same-sex spouse, you are not subject to imputed income for federal tax purposes. You may be subject to Wisconsin imputed income, depending on whether your same-sex spouse and his/her children are dependents for Wisconsin tax purposes, When adding a same-sex spouse, complete a Tax Status Verification of Marriage Form, UWS-55a to ensure that the correct taxes are withheld from your earnings.

Terminating a Domestic Partnership

If you terminate your domestic partnership, you must complete applications to remove your former domestic partner and his/her children from your benefit plans. You should also confirm the tax status of any remaining dependents with your benefits office to ensure that you are being taxed correctly.

To end your Chapter 40 domestic partnership, you or your former partner must submit an Affidavit of Termination of Domestic Partnership, ET-2372. The domestic partnership ends as of the date ETF receives the affidavit. It is the responsibility of the partner submitting the termination affidavit to notify the other partner that he/she is terminating the domestic partnership.

The termination of a domestic partnership is irrevocable. Once terminated, if you want to restore your domestic partnership, you must submit a new signed and notarized Affidavit of Domestic Partnership. Once an Affidavit of Termination of Domestic Partnership is filed, you cannot enroll a different domestic partner in any benefit plans for at least six months.

Marriage to Your Opposite-Sex or Same-Sex Domestic Partner

The domestic partnership ends on the date of marriage. You do not need to submit an Affidavit of Termination of Domestic Partnership. You should submit new benefit applications to change your domestic partner's status to spouse, as the change can impact your take-home pay if you have imputed income or are having premiums deducted post-tax.

Flexible Spending Accounts (FSA)

If you are in a legally recognized same-sex marriage, the FSA program can be used to pay the qualifying medical expenses of your domestic partner or his/her dependents.

If you are NOT in a legally recognized same-sex marriage, federal tax regulations do not allow the use of flexible benefit plans to pay for a domestic partner's (or domestic partner's child's) qualifying medical expenses on a pre-tax basis unless the domestic partner or child qualifies under the Internal Revenue Code as a tax dependent at the time the expense was incurred.

Family and Medical Leave Act (FMLA)

Employees cannot use federal FMLA leave to care for a domestic partner with a serious health condition.

Wisconsin Family and Medical Leave Act (WFMLA)

Domestic partners are included under the Wisconsin Family and Medical Leave Act (WFMLA). Employees may request WFMLA leave to care for a seriously ill domestic partner or the domestic partner's parents. The provision does not extend to a domestic partner's children unless the children are legally adopted by the employee.