|The Republican leader of the New
Hampshire state Senate wrote a commentary this week for the
Seacoast newspapers criticizing Democratic lawmakers for passing
three new employee benefit laws.
Senator Ted Gatsis claims that
the bills will have "unintended consequences on the insurance
laws of New Hampshire as well as the small-business owners and
their employees." "These bills will cause enormous
problems because of the taxes that New Hampshire families will
be obligated to pay," Gatsis argues.
House Bill 790 allows unmarried
New Hampshire young adults to remain eligible for insurance on
their parent's benefits plan until the age of 26, regardless of
whether they are enrolled in college. House Bill 437
permits same-sex couples to enter civil unions and have the same
rights, responsibilities and obligations as married couples
under state law. Senate Bill 197 allows a divorced or
legally separated spouse to continue employer-sponsored group
health insurance coverage.
Gatsis points out that these new
state laws conflict to some extent with federal laws governing
the same subject matter. As a result, employers in New
Hampshire will have to fill out extra paperwork and some
employees will have to pay additional federal income taxes if
they choose to participate in these new benefits programs.
What Gatsis fails to mention is
that employee participation in these new benefits plans is
voluntary. Same-sex partners won't be forced to register
for a civil union, parents won't be required to keep an adult
child on their benefits plan, and the continuation of health
benefits for an ex-spouse is not mandatory.
The senator explains that federal
law does not recognize same-sex marriages and therefore same-sex
partner benefits are not tax exempt under IRS rules, although
spousal benefits are. So an employer's contribution to a
partner's health benefits may be taxable to the employee as
non-exempt benefits compensation.
Employers will explain this to
employees before they sign up for such benefits. I'm sure
that gay couples can do the math. If it is financially
beneficial for them to participate in such a benefits plan, they
will enroll. If not, they won't.
Gatsis says that HB 790 conflicts
with federal tax laws because the "Internal Revenue Code's
definition requires the dependent to be 23 years of age and
younger." So what?
If an employee pays the full
premium for an adult child between 23 and 26 years of age, there
will be no tax under federal law, but there could be a major
savings in a group premium versus buying an individual policy
for the child. If the employer pays a portion of the
premium, and if the adult child does not meet the federal
definition of an exempt dependent, then the parent will pay some
tax on the employer's contribution.
Again since parental
participation is voluntary, the only problem I see is with
federal laws which are not "family friendly" in their overly
restrictive definitions of an exempt dependent.
"The bottom line and ambiguity
with the aforementioned pieces of legislation is there's a wide
scope of differences between existing federal and state laws,"
Gatsis argues. "And unfortunately for the people of New
Hampshire, many will be confused when it comes to filing their
taxes next year."
Because federal tax laws are
often confusing, Gatsis attacks state Democratic lawmakers for
expanding benefits protections for workers and their families.
It seems to me that his criticism should be directed toward
Congress for not giving more leeway to the states in designing
benefits laws that meet the needs of workers and their
Why isn't this Republican senator
defending state's rights? Why isn't he lambasting the
federal government for taxing workers who obtain health benefits
for family dependents?
New Hampshire is not out of the
mainstream in adopting a broad definition of "eligible family
dependent" for workplace health benefits. Many cities and
states and thousands of private employers have reshaped benefits
programs to respect family diversity, which includes the
realities of dependent adult children, divorce, and same-sex
It seems to me that the
Republican leader has concocted phony arguments to attack these
progressive health benefits laws and the Democratic legislators
who voted for them. Perhaps the tax argument is a Trojan
horse which conceals another hidden agenda.
To read other editions of
Column One, click here.
Unmarried America 2007
Thomas F. Coleman, Executive Director of Unmarried America, is an
attorney with 33 years of experience in singles' rights, family
diversity, domestic partner benefits, and marital status discrimination.
Each week he adds a new commentary to Column One: Eye on Unmarried
firstname.lastname@example.org. Unmarried America is a nonprofit
information service for unmarried employees, consumers, taxpayers, and