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Religious employers weigh gay marriage dilemma

Refusal to offer spousal benefits may create liability

Religious employers weigh gay marriage dilemma

Employers with religious objections to same-sex marriage face difficult decisions on whether to extend spousal benefits to married gay and lesbian couples.

The U.S. Supreme Court's recent nationwide legalization of gay marriage effectively stripped away many legal protections for employers that don't offer benefits to employees' gay spouses for religious reasons.

Still, several employers, including colleges with religious affiliations, have indicated they won't change their benefits policies despite the high court's June 26 ruling in James Obergefell et al. v. Richard Hodges et al.

“I don't really see a way for private employers to not include married same-sex couples if they're providing spousal coverage,” said Edna Kersting, a Chicago-based partner at law firm Wilson Elser Moskowitz Edelman & Dicker L.L.P.

As a result of the court's ruling, which overturned state laws banning same-sex marriage, employers that fully insure their group health care plans must offer married same-sex couples the same coverage as opposite-sex couples.

Employers that self-insure their health plans can still elect not to cover employees' same-sex spouses even if they cover married opposite-sex couples, since those plans are not governed by state laws.

However, experts said doing so could result in workplace bias lawsuits, particularly in light of the U.S. Equal Employment Opportunity Commission's recent announcement that it will pursue employment discrimination claims based on sexual orientation, even though Title VII of the U.S. Civil Rights Act does not expressly prohibit it.

“In most cases, I think it would run afoul of the EEOC's position that discrimination against gay and lesbian employees is forbidden as sex discrimination, because if you're covering the wife of a male employee, then you need to cover the wife of a female employee,” Ms. Kersting said.

Despite the legal difficulties created by the recent changes, several Christian colleges — including Wheaton College, Baylor University, Union University and Cedarville University — have indicated that they intend to continue to exclude married same-sex couples from their health benefit plans.

“Wheaton College believes that it continues to have the legal authority to enforce biblically based conduct standards for its employees,” a spokeswoman for the Wheaton, Illinois-based school said in an email to Business Insurance. “By virtue of their employment by the college, all faculty members, administrators and staff must accept the obligations of membership in the college community by committing annually to Wheaton's statement of faith and community covenant.”

Last week, Jackson, Tennessee-based Union University announced that it has left the Council for Christian Colleges due to the organization's “failure to respond appropriately” after two other member institutions — Eastern Mennonite University and Goshen College — recently extended benefits to married same-sex couples.

“The reason we are passionate about this is because what we are talking about is not a secondary or tertiary theological issue — marriage is at the heart of the Gospel,” Union University President Samuel Oliver said in an open letter to the CCCU. “To deny the Bible's concept of marriage is to deny the authority of Scripture.”

One possible legal refuge for some religiously-inclined employers that wish to continue providing spousal benefits only to opposite-sex couples could be the Supreme Court's June 2014 ruling in Hobby Lobby Stores Inc. v. Sylvia Burwell, in which closely held companies with religious objections to the health care reform rule requiring employers to offer contraception coverage were exempted from the rule under the Religious Freedom Restoration Act.

However, experts said the Hobby Lobby ruling only applies to family-owned, for-profit businesses. Several dozen religious non-profit organizations have petitioned the Supreme Court for a similar exemption, but will not be granted a hearing until at least October.

Moreover, experts said it is unclear if federal courts would extend the coverage exemption under RFRA to include spousal benefits for married gay and lesbian couples, given the inherently discriminatory nature of such a request.

“I think (the Hobby Lobby ruling) was written narrowly enough that it doesn't apply in this situation,” said Todd Solomon, a Chicago-based partner at McDermott Will & Emery L.L.P. “That said, it seems pretty likely that there are employers out there that are going to try it.”

Since the Obergefell ruling, a handful of Christian-affiliated colleges have announced that they will extend spousal health care benefits to legally married same-sex couples.

In a July 6 letter to campus employees, Hope College President John Knapp said that the Holland, Michigan-based school's administration “recognized early on that the Supreme Court was likely to issue a decision that would present new challenges for our college.”

“Spouses are eligible for benefits, so long as their marriage is legally recognized by the state of Michigan,” Mr. Knapp said. “This policy remains in place, meaning that a same-sex spouse of a Hope employee will now be eligible for benefits. After much prayer and consultation with our board of trustees, legal experts and others in Christian higher education, we determined that this continued policy serves the best interests of our college and campus community.”

“We'd actually been in the process of revising our campus discrimination and hiring policies for a couple of years, and the decision to make that change included offering spousal coverage under our health plan,” said Jodi Beyeler at Goshen College, a Mennonite college in Goshen, Indiana. “Even if the Supreme Court's ruling had gone the other way, we'd still have made the change.”

Meanwhile, the vast majority of religiously affiliated colleges, universities and charities in the U.S. have yet to formally decide whether they will observe the Supreme Court's ruling. Similarly, many for-profit employers with stated, deeply held religious beliefs have remained silent on whether they will amend their benefits programs, including large employers such as Hobby Lobby Stores Inc., Tyson Foods Inc. and Interstate Batteries Inc.

All three companies declined to comment for this story.