In the wake of United States v. Windsor, the case in which the Supreme Court held the Defense of Marriage’s (DOMA) prohibition on federal recognition of same-sex marriages unconstitutional, the Internal Revenue Service issued Internal Revenue Ruling 2013-17. The Ruling held that same-sex individuals who were married under state law would be considered married for federal tax purposes, but that those who are registered domestic partners would not. On September 27, 2013, the Centers for Medicare and Medicaid Services (CMS) issued guidance to clarify the impact of this Ruling on eligibility for advance payments of the premium tax credit and cost-sharing reductions in the Affordable Care Act’s Health Insurance Marketplaces (also known as exchanges).
Under CMS’s guidance, same-sex married couples will be treated the same as opposite-sex married couples for purposes of the premium tax credit and cost-sharing reductions. However, states may elect not to recognize same-sex marriages for purposes of Medicaid and the Children’s Health Insurance Program (CHIP), which could result in an eligibility gap for these individuals who live in states that do not recognize same-sex marriages for purposes of Medicaid and CHIP. The guidance states that the federally-facilitated exchanges will implement the guidance October 1, 2013 when open enrollment begins, but that state-based exchanges must implement the guidance “as soon as reasonably practicable.”