Tag Archives: new mexico

Ranking States’ Websites

Insurance is a complex purchase — policies are hard to understand, the reputations of insurance companies can be difficult to determine and what exactly you’re paying for isn’t always clear. Making an informed decision amid the overwhelming amount of information takes some effort, diligent research and, sometimes, a bit of luck.

As it turns out, there’s an agency in your state government that should be able to help with all these things: your state’s department of insurance. But these agencies vary widely in their ability to give critical time- and money-saving information to residents, or even to answer a simple question about insurance in your state. A new NerdWallet analysis looked at insurance departments across the country, evaluating their online offerings and how helpful their websites are to consumers in their communities.

We found most of these websites fall short in serving consumers by not providing key information, such as insurer rate comparisons and complaint data, as well as easy access to consumer assistance and educational materials. But we also identified states like Texas, whose insurance department website is a model of excellence that the lower-scoring states would do well to emulate.

Key Findings

For this study, NerdWallet examined the websites for all 50 states and the District of Columbia, looking for information that would benefit consumers the most. We also called consumer helplines and emailed each insurance department. We then graded each agency on more than 20 factors that added up to a 100-point scale.

What did we find? The vast majority of departments had plenty of work to do to improve the consumer information they offer and how easy it is to find it.

  • States are split on sharing rate comparisons: Twenty-seven department websites featured car insurance rate comparisons at the time of our scoring, and 24 did not. As for homeowners insurance rate comparisons, 21 websites shared the data, and 30 did not.
  • Complete complaint data are scarce: Just nine department websites offered consumers the ability to compare 2015 complaint data across insurance companies for all four major lines of insurance — auto, health, homeowners and life. Twenty-three departments shared no complaint data.
  • Calling for help can be cumbersome: We called all 51 departments and asked a basic, state-specific auto insurance question. Though 19 answered our question in less than two minutes and 36 in less than 10 minutes, 15 either didn’t answer the question at all or took long enough that consumers could have found another source of information during that time.

It’s important to note that state insurance departments do much more than provide help and information to consumers. They also handle licensing, monitor and regulate rates, and deal with complaints. Our analysis focused only on their websites and helplines. Spokespeople for many of the lower-scoring states said their website offerings are limited because of staffing and budget constraints. A handful of state spokespeople we interviewed said they didn’t see value in offering the things we scored. For example, Ohio Department of Insurance spokesperson David Hopcraft said the agency does “not view its website as a shopping mall for online insurance comparisons,” when asked about why the department didn’t post rate comparison data.

Of the lower-scoring departments that responded to our requests for comment, several announced coming or in-progress improvements, including New Mexico, the lowest-scoring state in our analysis.

See also: The Insurance Implications of Social Networking Websites, Part 3  

“Your project has motivated us to improve the consumer elements of our website,” wrote Alan Seeley of the New Mexico Office of Superintendent of Insurance, whose department made several consumer-centric adjustments before publication.

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The Analysis

In 1999, the Consumer Federation of America graded state insurance department websites and reported that three states lacked an online presence. Now, all departments have websites, catering to how Americans prefer to get information. But these sites vary greatly in their offerings, their ease of use, how well they’ve kept pace with advancements in design and how folks get information online.

NerdWallet analyzed each website based on four categories:

  • Insurance rate comparisons
  • Complaint data
  • Consumer assistance
  • Consumer education and resources

For a comprehensive look at our methodology, including weightings, click here.

Here’s why we chose these metrics:

Insurance Rate Comparisons

States accept rate filings from insurance companies, which alert the department to changes in pricing and coverage. Typically based on these filings, premium comparisons shown on insurance department websites are not meant as quotes — as numerous factors go into pricing a policy — but consumers can use them to get a general idea of what they might pay for coverage or which company offers the lowest price.

Complaint Data

States are tasked with accepting and investigating consumer complaints against insurance companies. Comparing complaint rates across companies can be a useful shopping tool for auto, homeowners, health and life insurance customers.

Consumer Assistance

When insurance customers have questions about coverage and laws in their state, they should be able to call the agency responsible for insurance regulation and receive answers. For this metric, we called all 51 departments by using the phone number that consumers would be most likely to dial. We asked a basic state-specific insurance question: “What are the minimum auto insurance requirements in this state?”

Consumer Education and Resources

Insurance is a complicated topic, and with so many resources online, it’s difficult to know whom to trust. People should be able to go to the state agency tasked with insurance regulation to get unbiased information to help guide their insurance decisions.

Why It Matters

Insurance in the U.S. is regulated at the state level. This is in contrast to many other financial service providers, such as banks, other lenders, credit card companies and debt collectors, which operate under significant federal oversight. The Consumer Financial Protection Bureau is also looking out for the interests of customers by accepting and resolving complaints, as well as serving as a liaison between citizens and financial institutions. However, the trillion-dollar insurance industry is by and large an exception.

Fifty-one different regulating bodies make for a widely varied approach to insurance regulation and consumer services. Generally, however, these state insurance departments have the task of regulating the industry to protect consumers, the primary goal of state insurance regulation, according to the National Association of Insurance Commissioners, or NAIC.

Robert Hunter, director of insurance at the Consumer Federation of America and former insurance commissioner for Texas, led an analysis of state insurance agencies in 1999 that was similar to this study. The motivation then: Consumers were complaining they couldn’t find crucial information, which Hunter says these department websites are in a unique position to provide.

See also: ACA: Complication for Websites  

“These departments are — at least you hope, and it’s almost always true — independent of insurance companies,” not subject to biases that might come from state commissions staffed by industry insiders, Hunter says. “Plus, they have a lot of information for consumers that no one else has, information that no one else can really help you with.”

Departments of insurance are clearinghouses for consumer complaints against insurers in their state. Most also require insurers to file rate changes and policy form updates, making them an ideal primary source of insurance policy information. These agencies, better than any national organization, know the unique challenges and legal requirements consumers in their state face, and they can provide this information without any self-serving interests.

“Consumers shouldn’t have to rely 100% on the insurance company or its salesperson for information,” says Amy Bach, executive director of United Policyholders, an insurance consumer advocacy organization. “There should be a neutral source of information available to the consumer to help them make good decisions surrounding this very complicated product.”

In our analysis, we found many states’ websites rely on the NAIC for educational information and details about complaints filed against insurance companies. This trade organization was established almost 150 years ago to bring some uniformity to the patchwork that results from so many regulatory bodies, and has developed some useful consumer resources. States can save time and money by passing these resources on to their residents. But NAIC resources are no substitute for the kind of localized information that state insurance departments provide, according to Birny Birnbaum, executive director of the Center for Economic Justice.

“It’s ridiculous to have an auto insurance buyers guide that lacks state specifics, that says, ‘In some states… .’ How does that help me?” Birnbaum says. “It’s wrong for a state to limit the resources that their insurance department has by simply relying on the NAIC. States need to supplement the tools that the NAIC provides.”

NerdWallet contacted the NAIC for comment but didn’t receive a response in time for publication. However, the NAIC consistently refers consumers to state insurance departments for information specific to where they live, both on its website and its educational site InsureU. When it comes to complaint data, the NAIC’s Consumer Information Source does the same, directing visitors to their state agency for complete information and accuracy.

The Results

Here’s how each state’s department measured up. An asterisk (*) denotes a tie in the rankings. For details of what went into each score, click on your state’s name or navigate to this page.

 

This report originally appeared on NerdWallet. You can find the methodology here.

Marijuana Case Gets Even Weirder

Of all the states, who would have guessed that New Mexico would be the hotbed of medical marijuana court decisions?  Between the Vialpando v. Ben’s Automotive in May and the Maez v. Riley Industrial case, handed down earlier this month, New Mexico’s court of appeals appears to be one of the most pro-marijuana courts in the nation.

Back in May, when I first wrote about this issue, I wondered why the reasonableness of the marijuana treatment was not questioned, and our corporate counsel told me that surely there be additional case law. Sure enough, the court in Maez decided to take on the issue.

Maez suffered from an industrial accident and was treated by Dr. Reeve.  Dr. Reeve prescribed a variety of medications, including several opioids. As required for patients on long-term opioid therapy, he performed regular urine drug tests. Maez tested positive for marijuana.

Typically, recreational marijuana use, or the use of any illicit substance, raises red flags with the prescriber. But not with Dr. Reeve!

Dr. Reeve informed Maez that, if he was going to use marijuana, he needed to have a medical marijuana license. Luckily for Maez, Dr. Reeve was happy to provide him with one. According to Dr. Reeve, “Patients are going to use cannabis either one way or the other. . . . If a patient requests that I sign [a license], I will sign it . . . but I’m not recommending . . . or in any way advocating for the use of medical cannabis.” Dr. Reeve also considers the use of medical marijuana to be the patient’s decision, “as it’s private and voluntary, and it’s not overseen by a physician.”

So the guy ended up on a medical marijuana regimen because of a failed drug test. That should be sufficient for the court to find in favor of the payer, right?

Nope.  And it gets worse.

The court went on to rationalize Dr. Reeve’s actions as reasonable, stating that “[Dr. Reeve] adopted a treatment plan based on medical marijuana. He would not have done so if it were an unreasonable treatment.”

Imagine if that logic was applied to all workers’ comp medical treatment. The doc says it’s reasonable. . . so it is. State statutes and regulations have been evolving for more than a decade to specifically counter this argument. But not in New Mexico.

And it gets even worse.

To take this determination one step further, because the physician said it is Maez’s choice whether to use medical marijuana, the court, by default, has determined that the self-directed use of marijuana by this injured worker is reasonable because the physician signed off on it.

This is patient-directed care at its absolute worst.

To recap what led to this decision: illicit drug use, perpetrated by the injured worker, condoned by the doctor and supported by a court of law.

I wish I could tell you that marijuana should be the least of your concerns, but if this is the specious logic to which we’re beholden. . . we’ll need better guidelines, better tools and better lawyers.

Oregon Study Shows Which States Are Next

The biennial study on workers’ compensation premium rates issued by the Oregon Department of Consumer and Business Services (DCBS) was released last week, and, as always, is worthy of a review by those of us entrenched within the industry. The study ranks all 50 states and Washington, D.C., based on rates that were in effect Jan. 1, 2014. This year’s results show that major reforms don’t always gain the results that were intended or marketed to the industry; and while the results may not accurately reflect legislative intentions of the past, the report may be a better predictor of major reforms to come.

The study shows that, despite extensive reforms designed to lower costs, California now has the most expensive rates in the nation, followed by Connecticut. North Dakota had the least expensive rates. In the Northwest, Idaho’s rates were the 14th most expensive, followed by Washington. Oregon researchers also compared each state’s rates to the national median (midpoint) rate of $1.85 per $100 of payroll — California, for instance, was almost twice the median

According to Mike Manley, one of the co-authors of the survey, “We continue to see a trend in the distribution of state index rates in our study clustering in the middle of the distribution. A record 21 states are within plus or minus 10% of the 2014 study median. This makes the rank values more volatile from one study to the next. I would recommend that states look also to their ‘Percent of study median’ figure for comparisons over time.”

Because states have various mixes of industries, the study calculates rates for each state using a standard mix of the 50 industries with the highest workers’ compensation claims costs in Oregon. Details about how the study was conducted can be found here. A summary of the study was posted Wednesday, Oct. 8; the full report will be published later this year.

The summary report, available here, provides the complete ranking of the states premium rates. I have taken that data and added a comparative column that shows at a glance how far up or down the scale a state has moved since the last report in 2012. The table presents an interesting view, particularly juxtaposed with the knowledge of what states have undergone significant reforms in the past few years.

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We can see that there were major drops in premium rank for both Kentucky and Wisconsin. Kentucky moved from 22nd-highest in the nation to 40th, improving by 18 positions. Wisconsin moved down 11 spots, from 12th-highest to 23rd. While Wisconsin did enact some changes in 2012, neither state is considered to have been a major reform state over the last few years.

For a couple of those states undergoing dramatic reforms, Oklahoma and Tennessee, it is too early to tell the effect, as they are just implementing changes this year. Others, however, including California and Kansas, saw premium costs as a comparative rise despite reforms intended to do otherwise. Illinois, another reform state, did see some positive movement, but it is probably not statistically significant given the weight of the costs and issues in that state.

I would postulate based on this report that people in New Mexico, Hawaii, Missouri and Delaware may be thinking of what changes should be in order, because they had dramatic negative movement on the scale this year. Even if past reforms overall are not creating significant improvement in these numbers, I am pretty sure they will be a better predictor of what states may be facing reform in the future.

Oregon has conducted these studies in even-numbered years since 1986, when Oregon’s rates were among the highest in the nation. The department reports the results to the Oregon legislature as a performance measure. Oregon’s relatively low rate today reflects the state’s workers’ compensation system reforms and its improvements in workplace safety and health.

Here are some key links for the study/workers’ compensation costs:
• To read a summary of the study, go here.
• Prior years’ summaries and full reports with details of study methods can be found here.
• Information on workers’ compensation costs in Oregon, including a map with these state rate rankings, is here.

States of Confusion: Workers Comp Extraterritorial Issues

As states passed workers compensation laws, each state established its own system. This resulted in a mishmash of laws, benefits, compensability and eligibility from state to state. Courts have ruled that a state has the right to apply its own workers compensation rules and standards to each case. Hence, most states simply don’t care what other states allow, only what is required under their workers compensation laws. There is little meaningful cooperation or coordination among states. Challenges for agents, employers, insurance companies and adjusters include understanding:

  • When coverage is required in jurisdictions where the employer has operations or employees working, living or traveling in or through.
  • How coverage is provided for various jurisdictions.
  • What jurisdictional benefits an employee can collect.

The policy

The two items that reference what states are insured under a workers compensation policy are 3.A. and 3.C. on the information page. (Federal coverage can only be added by endorsement.) 3.A. is fairly simple. The insurance agent for the employer instructs the insurance carrier to list the states where the employer operates when the policy goes into effect or is renewed. 3.C. is a safety net – at least most of the time. That item lists states where an employer expects it may have employees traveling to or through or working in. If an employer begins work in any state listed in 3.C. after the effective date of the policy, all provisions of the policy apply as though the state were listed in 3.A. Notice must be given “at once” if work begins in any state listed in 3.C., although “at once” is not defined in the policy. If the employer has work in any state listed in 3.C. on the effective date of the policy, coverage will not be afforded for that state unless the carrier is notified within 30 days.

It should be noted the insurance policy does not determine what law applies at the time of injury. The law determines what is payable. In addition, note that the workers compensation policy does not apply to Ohio, North Dakota, Washington and Wyoming, “monopolistic” states where coverage may only be purchased from the state. Although larger employers may self-insure in Ohio and Washington (but not North Dakota or Wyoming), no private insurance carrier can write workers compensation coverage for an employer.

It would seem the safe bet is to add all states except monopolistic states to 3.A. However, most underwriters are unwilling to do this or even add the ideal wording for 3.C.: “All states, U.S. territories and possessions except Washington, Wyoming, North Dakota, Ohio, Puerto Rico and the U.S. Virgin Islands and states designated in Item 3.A. of this Information Page.” The reason for the underwriters’ unwillingness varies. Common reasons underwriters provide include:

Licensing issue

The insurer is not licensed in all states. Many regional insurers are only licensed in a handful of states while other carriers may only be licensed in one state…often for strategic reasons. Carriers frequently assert it is impossible — and possibly illegal — to list a state they are not licensed in (even though policies contain wording whose clear intent is to allow carriers to pay benefits in states where they are not licensed).

Underwriting considerations

The insurance carrier may not want to provide insurance in certain states it considers more challenging from a workers compensation standpoint or because carriers do not want to write in states where they have little or no claims adjusting experience, established provider networks and knowledge of the nuances of the law.

Underwriters’ lack of awareness or knowledge

Underwriters are not claims adjusters and do not always have a full understanding  of workers compensation’s jurisdictional complexity and the employer’s risk (no coverage) and agents’ risk (errors and omission claims) for not securing coverage for all states with potential exposure. Agents are often told the employer does not need coverage in the state in which the agent is requesting coverage — which the home or primary state benefits will pay. However, the chance that an employee will be successful in securing another state’s benefits — even if the employee is only there temporarily — is just too much of a risk.

Physical location

Carrier underwriters frequently cite the “physical location” — actually needing an address — as a roadblock to adding a state to 3.A. The National Council for Compensation Insurance (NCCI) has rules on this issue. Most states that follow NCCI rules allow entry of “no business location” — but not all.  States that follow NCCI rules (including the independent bureaus like Texas) will often modify some rules. Arizona, Kentucky, Montana and Texas do not allow “no business location.” It is a regulatory reporting issue. Possible solutions to secure 3.A. coverage include:

  • Providing an entry of “Any Street, Any Town” or “No Specific Location, Any City” for the state. Many carriers will use this.
  • Using an employee’s home address in the state if there is an employee working from home there.
  • Using the agent/brokers address if they have an office there.

Compliance

Only Texas and New Jersey have workers compensation laws that are elective. New Jersey employers still, in effect, cannot go without workers compensation insurance. In Texas, any employer can “unsubscribe” to the workers compensation system and “go bare” and be subject to the tort system. All other states require employers to purchase workers compensation insurance for their employees or qualify for self-insurance.

Which benefits apply? 

If an employer has employees traveling on a limited basis from their home states, the headquarters state may have established a time limit on coverage for out-of-state injuries. The most common limit is six months. This may be written into the statute or may be silent, but over time case law has made determinations. In other words, if an employee usually worked in Michigan but spent three months working on assignment in Kentucky and was injured in Kentucky, the employee would most likely still be eligible for Michigan benefits. In states with a timeline, an employee working in another state for more than the designated duration is no longer entitled to benefits in the home state, but the employee is probably entitled to the compensation in the state in which he or she is currently working.

One of the most important factors is that an employee injured outside of his state of residence may have selection of remedies (benefits) if he lives in one state and works in another. The Michigan employee injured in Kentucky may want Kentucky benefits because Kentucky has lifetime medical and Michigan does not. Or, an employee may have been injured on the way to work, and the state where she was injured does not allow for workers compensation in this circumstance even though this would be a compensable injury in the employee’s headquarters state. Perhaps there is a disqualification in one state because of, for example, an employee’s intoxication that would not be a disqualifier in another state. In addition, the maximum amount of income benefits available to employees varies considerably from state to state.

Piggybacking benefits

Piggybacking occurs when an employee files in one state and then in another state where he qualifies for additional benefits. What is allowed in additional payments will depend on the circumstances of the claim and the states involved. This issue has become particularly dangerous for employers that have not arranged coverage in other states because they are unaware there is an exposure there. The employer then becomes liable for the benefits due in the uninsured state, including all costs to adjust and defend the claim if litigated.

Typically, if an employee collects benefits in one state and is successful in perfecting a claim in another state with higher benefits, the benefits collected in the first state are offset from the second state’s benefits payment. For example, assume an employee collects $10,000 from Indiana then files in Illinois, which grants $18,000. Only the difference between $18,000 and $10,000, or an additional $8,000, would be paid. Employers with employees in both “wage-loss” and “impairment” states face an additional challenge: Employees could qualify for both states’ benefits with no offsets.

Most states don’t care what other states have allowed, only what is required under their laws. If the employee collected under another state’s law but qualifies in our state for additional benefits, well, so be it. If an employee has traveled to, through or lived or worked in another state to create a “substantial” relationship with the state, there is a very good chance he or she will be granted workers compensation benefits in that state.

State statutes, case law, common law and tests

State statutes, case law or the common law in a jurisdiction may influence what benefits an employee may collect. Various criteria that may apply include:

  • State of hire
  • State of residence
  • State of primary employment
  • State of pay
  • State of injury
  • State in agreement between employer and employee (unique to Ohio, and only Ohio and Indiana recognize the agreement)

The “WALSH” test is a good guide to questions to ask, in order of importance:

W   Worked – Where did the employee work most of the time?

A    Accident – Where did the accident occur?

L    Lived – Where is the employee’s home?

S    Salaried – Where is the employee getting paid from?

H    Hired – Where was the contract of hire initiated?

Just about all jurisdictions indicate an employee is entitled to the benefits of their state if the employee was working principally localized in the state, was working under a contract of hire made in the state or was domiciled in the state at the time of the accident. This is why “worked” and “accident” are given the most weight.

Reciprocity

Several states will reciprocate another state’s extraterritorial provisions. Each state has its own reciprocal agreements, with as few as a half-dozen states or as many as 30. For as many states that cooperate with reciprocity, just as many states will not.

In addition, not all reciprocity agreements address the “claims” aspect of compliance. In other words, the reciprocity means the employer does not have to secure “coverage” for an employee temporarily in another state; however, it does not mean that the employee could not pursue a claim in that state. If the employer was relying on the reciprocity provisions of the state law and did not secure coverage in that other state, the employer may be without coverage for that state and may also become “non-compliant” with the state and be subject to fines. The employer (or its agent) has decided to rely on the employee accepting his home state benefits. If the injured employee goes back to her home state for benefits, no harm, no foul.  However, if the employee perfects a claim in another state or in some instances simply chooses to file a claim in that state, then the employer would be considered a non-complying employer and could be subject to penalties.

Washington does not reciprocate in construction employment unless there is an agreement in place. Washington has these agreements with Oregon, Idaho, North Dakota, South Dakota, Montana, Wyoming and Nevada.

Some specifics

Massachusetts, Nevada, New Hampshire New Mexico, New York, Montana, and Wisconsin require coverage in 3.A.

Kentucky allows no exceptions for family members, temporary, part time or out-of-state employers performing any work in the state of Kentucky. Kentucky does not accept the Ohio C110 form.

New York made a significant change in its workers compensation law [Section 6 of the 2007 Reform Act (A.6163/S.3322)] that affected employers if they conducted any work in New York or employed any person whose duties involve activities that took place in New York. Effective Feb. 1, 2011, the New York board clarified coverage requirements. Detailed information can be found on the New York Workers Compensation Board’s website: http://www.wcb.ny.gov/content/main/onthejob/CoverageSituations/outOfStateEmployers.jsp

Florida, Nevada and Montana require all employers working in the construction industry to have specific coverage for their state in 3.A. Ohio and Washington require that employers purchase coverage from the state for all employers working in the construction industry. Otherwise, Florida, Nevada, Montana, Ohio and Washington will honor coverage for temporary work from other jurisdictions. Florida also requires the coverage be written with a licensed Florida carrier. 3.A. coverage status is required for any employer having three or more employees in New Mexico and Wisconsin even on a temporary basis.

The standard workers compensation policy exclusion for bodily injury occurring outside the U.S., its territories or possessions and Canada does not apply to bodily injury to a citizen or resident of the U.S. or Canada who is temporarily outside these countries. State workers compensation will apply, however, for those employers that have employees regularly traveling out of the country; the Foreign Workers Compensation and Employers Liability endorsement should be added to their workers compensation policy. This endorsement is used for U.S.-hired employees who are traveling or residing temporarily outside the U.S. The coverage is limited to 90 days. For employees out of the country for long periods or permanently, coverage needs to be arranged under an international policy.

The extraterritorial issues arise because many states — Alabama, Alaska, California, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee and Wisconsin — permit concurrent jurisdiction between State and Longshore coverage. Some states — notably Florida, Louisiana, Maryland, Mississippi, New Jersey, Texas, Virginia and Washington —  do not permit this concurrent jurisdiction, and Longshore becomes the sole remedy. In concurrent jurisdictions, the employee can file in both state and federal court, and the employer must defend both.

Summary

  • Recognize that having employees who work, live or are temporarily traveling to or through other states creates premium and coverage challenges for employers and agents.
  • Take time to understand the rules of the state where there is potential exposure.
  • States requiring coverage in 3.A. for some or all situations tend to be strict and impose severe penalties for non-compliance. Many carriers are often aware of the challenges these states present and will work with the agent/employer and add on an “if any” exposure basis.
  • Always attempt to secure the broadest coverage possible under the workers compensation policy, adding to 3.A. as many states with even minimal exposure. As a fallback, get the state in 3.C.
  • Obtain coverage for operations in monopolistic states separately.
  • Address out-of-state exposures when insured by a state-specific state fund or regional carrier that only writes in one or a few states. Remember, the 3.C. wording is designed to pay benefits — by reimbursing the employer — if the carrier cannot pay directly to the employee.
  • Check for employees traveling out of the country and arrange to expand coverage with the foreign endorsement or through an international policy.
  • Check with a marine expert to assess the exposure to the Longshore Act and whether coverage is required.  Longshore is very employee-friendly.

The white paper on which this article was based can be found here.

Same-Sex Marriage: An Update on Handling Claims

The pace of legislative and judicial activity surrounding same-sex marriage has quickened.

Currently, 17 states plus the District of Columbia allow same-sex couples to marry. Several states have expanded the legal rights available to spouses in same-sex relationships through civil unions and domestic partnerships. On June 26, 2013 the U.S. Supreme Court ruled in  Windsor v. United States, No. 12-307 that section 3 of the federal Defense of Marriage Act (DOMA), which defines marriage, is unconstitutional. Since this decision, several state attorneys general have announced that they will no longer defend their state’s same-sex marriage bans.

Here is an update on the issue of same-sex marriage and claims handling considerations:

Same-Sex Marriage Overview

In the states that recognize these unions, the legal status of same-sex marriages is identical to opposite-sex marriages.

The first states that allowed same-sex marriage did so as a result of court decisions—Massachusetts in 2004, Connecticut in 2008 and Iowa in 2009. However, most states and the District of Columbia provided for same-sex marriage through legislation. Below is a summary of changes in the states over the past two years on this fast-moving issue:

2012

Washington

Legislation establishing same-sex marriage was approved February 2012, but opponents gathered enough signatures to put the issue on the November 2012 ballot. Voters upheld the law, and same-sex marriages began on Dec. 6, 2012.

Maryland

Gov. Martin O’Malley signed same-sex marriage legislation into law on March 1, 2012. However, opponents of the legislation obtained enough signatures to file a referendum challenging the law during the November 2012 election. The law was upheld by the voters and became effective on Jan. 1, 2013.

Maine

During the November 2012 election, voters approved a ballot measure legalizing same-sex marriage. The measure became effective Dec. 29, 2012.

New Jersey

The legislature passed a same-sex marriage bill in February 2012, but the measure was vetoed by Gov. Chris Christie. A legal challenge was raised to the state’s law that only provided civil unions for same-sex couples, and a lower court ruled that the state had to allow same-sex couples to marry beginning Oct. 21, 2013. After the New Jersey Supreme Court denied an appeal for delay, Gov. Christie announced that the state would drop its appeal, making same-sex marriage legal in New Jersey.

2013

Rhode Island

Gov. Lincoln Chafee signed legislation that legalized same-sex marriage, eliminated the availability of civil union and recognized civil unions and same sex marriage from other states on May 2, 2013. This bill became effective Aug. 1, 2013.

Delaware

Gov. Jack Markell signed into law on May 7, 2013, same-sex marriage legislation that also recognized civil unions and same-sex marriage from other jurisdictions. The law became effective July 1, 2013.

Minnesota

Following the defeat of a constitutional prohibition of same-sex marriage during the November 2012 election, the legislation passed a bill allowing same-sex marriage May 2013. The law went into effect on Aug. 1, 2013.

California

On June 26, 2013, the U.S. Supreme Court declined to decide the California challenge to Proposition 8, concluding that it had no authority to consider the question in the case. The effect of that decision was to reinstate the federal district court decision overturning Proposition 8, thus allowing same-sex marriage in California.

Hawaii

During a special session held in October and November 2013, same-sex marriage was passed after both houses agreed to the addition of an amendment that strengthened the exemption of religious organization from being required to provide facilities, goods or services for the marriage or celebration of the marriage if it violates their religious beliefs. Gov. Neil Abercrombie signed the bill on Nov. 13, 2013, and it became effective on Dec. 2, 2013.

Illinois

Gov. Pat Quinn signed Senate Bill 10 into law on Nov. 20, 2013, and same-sex marriages will be available beginning June 1, 2014. A ruling by a U.S. district judge allowed residents of Cook County, Ill., to begin marrying on Feb. 21, 2014.

New Mexico

The New Mexico Supreme Court ruled on Dec. 19, 2013, that same-sex couples are allowed to marry. The ruling went into effect immediately.

Of the 33 states that still prohibit same-sex marriage, 29 have done so through constitutional provisions. Efforts to overturn state constitutional prohibitions have been initiated in the federal courts and have moved, or are about to move, into four federal appellate courts.

  • The Virginia case, Bostic v. Rainey, is expected to be appealed to the U.S. Court of Appeals for the 4th Circuit in Richmond, Va.
  • The Oklahoma case, Bishop v. U.S., 04-cv-848, U.S. District Court, Northern District of Oklahoma (Tulsa) is to be heard before the U.S. Court of Appeals for the 10th Circuit in Denver, Colo., along with the Utah case, Kitchen v. Herbert, 13-cv-00217, U.S. District Court, District of Utah (Salt Lake City). Oral arguments are scheduled to be heard separately for these two cases in April 2014.
  • The Nevada case, Sevcik v. Sandoval, 12-17668, will be heard before the U.S. Court of Appeals for the 9th Circuit in San Francisco, Ca.

In all four cases, the rulings are stayed pending appeal, meaning marriages cannot occur at this time. It is anticipated that the U.S. Supreme Court will be again asked to review this issue in 2015 or soon thereafter. Meanwhile, more action through legislation and ballot initiatives is expected to occur this year.

Civil Unions

A civil union is a category of law created to extend rights to same-sex couples. These rights are recognized only in the state where the couple resides, and no federal protection is included.

In 2013, the Colorado legislature passed a bill to establish civil unions for same-sex couples. The bill also provides recognition of civil unions from other jurisdictions. Gov. John Hickenlooper signed  SB 11 into law on March 21, 2013, and it became effective on May 1, 2013.

Delaware and Rhode Island replaced their civil union provisions with same-sex marriage, as previously occurred in Connecticut, New Hampshire and Vermont.

In Hawaii, civil unions remain available to same-sex and opposite-sex couples alike. The status of civil unions in Illinois and New Jersey are not yet clear with the legalization of same-sex marriage.

Domestic Partnerships

Domestic partnership is a civil contract between same-sex or opposite-sex, unmarried, adult partners who meet statutory requirements. Laws vary among states, cities and counties for domestic partnerships. Several states register these partnerships.

Washington has recently announced that registered domestic partnerships for same-sex partners will be converted to marriages on June 30, 2014, if marriage has not occurred or the partnership has not been dissolved by that time. The conversion will not apply to the domestic partnerships of heterosexual couples.

Reciprocal Beneficiaries

A reciprocal beneficiary agreement is a consensual and signed declaration of relationship for two adults unable to marry each other. Reciprocal beneficiary laws in Colorado, Hawaii and Maryland allow some benefits of marriage such as workers’ compensation survivor and health-related benefits.

Claim-Handling Considerations and Suggestions

The definitions of “spouse,” “dependent” and “marriage” are changing, and these changes affect the handling of casualty claims as we determine who is an eligible dependent or has legal standing to file certain causes of action. It is important that we are mindful of the state laws and any case law in the particular jurisdiction relating to same-sex unions.

Some state insurance departments have issued bulletins regarding their compliance expectations. For example, the Minnesota Departments of Commerce and Health issued  Administrative Bulletin # 2013-3 to advise property and casualty insurers that any policy issued in Minnesota on or after Aug. 1, 2013, providing dependent coverage for spouses must make that coverage available on the same terms and conditions regardless of the sex of the spouse. The bulletin reminds insurers that defining a spouse in a way that limits coverage to an opposite-sex spouse would be discriminatory and unfair and a violation of Minnesota Statutes section 72A.20, subdivision 16.

When evaluating the eligibility of dependents, one area of uncertainty involves same-sex couples that have a valid marriage but move to a state that does not recognize their marriage. The U.S. Supreme Court decision in Windsor did not address Section 2 of DOMA, which does not require states to give effect to same-sex marriages performed under the laws of other states. In the past, most federal laws looked to the state of residence at the time benefits are sought, rather than where the marriage occurred.

In response to the U.S. Supreme Court DOMA decision, the U.S. Department of Labor published  Technical Release  2013-4 on Sept. 18, 2013. This release indicates that the rule of recognition to be applied is based on the state where the marriage was celebrated, regardless of the married couple’s state of domicile. Guidance is also provided on the meaning of “spouse” and “marriage,” as these terms appear in the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), and the Internal Revenue Code that the department interprets.

This release likely also applies to the following four major disability programs administered by the Department of Labor's Office of Workers’ Compensation Programs (OWCP):

  • Longshore and Harbor Workers' Compensation Program and its extensions, including the Defense Base Act
  • Energy Employees Occupational Illness Compensation Program
  • Black Lung Benefits Program
  • Federal Employees' Compensation Program

Additional recommendations include:

  1. Ascertain whom the employer shows as the spouse.
  2. In addition to determining marriage or civil union, domestic-partnership registration should be confirmed.
  3. If interviewing a claimant in a jurisdiction that recognizes same-sex unions, in addition to “spouse” add the terms “domestic partner or designated beneficiary” to the questions.
  4. It might be necessary to find out when and in what state the marriage occurred.
  5. Any questions or concerns should be discussed with your supervisor, team leader, manager or defense attorney.

Sometimes, our duties as claims examiners are affected by laws seemingly unrelated to insurance. It is important that we consider the impact of headlines and changes in the law on our handling of workers’ compensation claims.