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Abstract: 

The laws governing employer-provided benefits in the context of non-traditional relationships are in a great deal of flux. This article reviews the tax rules that apply to benefits provided to divorced spouses, domestic and civil union partners, and non-dependents. Under what circumstances are they taxable, and to whom, and when? While the principal focus is on group health insurance (including self-funded medical arrangements), the principles generally apply with equal force to other welfare and fringe benefits. The author next describes the various approaches that employers have taken to comply with applicable tax rules and examines the valuation criteria established under applicable IRS guidance and concludes with recommendations for how employers and employee organizations might go about assuring compliance.

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Affiliations:  1: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.