Equality California
Governor Signs LGBT Health Insurance Tax Parity Bill
September 25, 2013

CONTACT: Jesse Melgar, Equality California
PHONE: 323.848.9801 x207 EMAIL: jesse@eqca.org

Governor Signs LGBT Health Insurance Tax Parity Bill

(Sacramento) Assembly Bill 362, authored by Assemblymember Phil Ting and sponsored by Equality California, was signed by Governor Jerry Brown today. The bill covers same-sex couples who are married or registered domestic partners, whose employers reimburse their employees for federal taxes the couples pay on health care benefits for their partner and dependents. 
"The Governor's signature today affirms the belief that no matter who you love, everyone should be treated equally under the law," said John O'Connor, Executive Director of Equality California. "We applaud Assemblymember Ting for authoring this bill and standing up for gay and lesbian couples throughout California!" 
“Same sex couples in California can finally choose marriage but our tax policy penalizes them for being unable to marry until now,” said Assemblymember Philip Y. Ting (D-San Francisco), author of AB 362. “This new law is the first of its kind to ensure that all couples are taxed equally by the state, regardless of who they love.  It also provides same sex couples a window of time to transition to marriage, which shows California’s commitment to fairness for its lesbian, gay and bisexual residents in spite of continued federal discrimination.” 
The federal government assessed taxes on these benefits because it did not recognize marriages of same-sex couples prior to the Supreme Court ruling striking down DOMA.   As a result, employer-sponsored health insurance coverage to an employee’s same-sex partner and the partner’s children has been treated as income at the Federal level.  A growing list of companies choose to reimburse their employees for this unfair tax at the federal level, however California then taxes this reimbursement.  AB 362 completely removes the state’s role from these reimbursements - allowing California’s same-sex couples to receive the full reimbursement given to them by their employer.  The bill will sunset in 2019.
Under current state law, the reimbursements provided by an employer are considered income to the employee, and are subject to taxation by the state of California.

Equality California (EQCA) is the largest statewide lesbian, gay, bisexual and transgender advocacy organization in California. For more than a decade, Equality California has strategically moved California from a state with extremely limited legal protections for LGBT individuals to a state with some of the most comprehensive protections in the nation. Equality California has partnered with legislators to successfully pass over 90 pieces of pro-equality legislation and continues to advance equality through legislative advocacy, electoral work, public education and community empowerment. www.eqca.org