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What Are DOMA's Effects on LGBT Couples?

Healthcare benefits are taxed and medical bills cost more.

Because of DOMA, even same-sex partners who are legally married in their home state are seen as legal strangers in the eyes of the federal government, including the IRS. As a result, even if you’re lucky enough to have employer-based health insurance that also covers your same-sex partner, you’ll pay more in taxes because your employer and you are required to treat the fair market value of your partner’s coverage as taxable income to you.

DOMA also creates disparity between heterosexual and LGBT spouses for healthcare expenses. For instance, under federal law, an employee is able to contribute pre-tax wages to a flexible spending account (FSA), which he or she can then use to pay healthcare expenses.

Because LGBT marriages are not recognized under DOMA, a same-sex spouse may not use the FSA to help pay his or her medical bills, unless that spouse is also a dependent.

Because a same-sex spouse of an employee with an FSA is still required to make co-payments and pay deductibles and uncovered health expenses using after-tax dollars, it’s estimated that same-sex couples who take advantage of employer-based healthcare benefits are deemed to have imputed income (noncash compensation to an employees’ taxable wages), and as a result they pay an average of $1,500 more per year than their straight counterparts.

Not only does this discriminatory policy hurt LGBT couples, but businesses that employ them incur extra burdens to payroll and additional administrative costs.

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