As previously noted, we have no problem discussing alternative lifestyle issues and insurance. This latest comes from Alert Reader© Jeff M, who asks (and then answers) "did the new COBRA rules change taxation of domestic partners?"
This is especially relevant as we see more and more carriers offering "family plan" type coverage to unmarried couples (and those same-sex marriages in relevant locales). In general, domestic partners (DP's) aren't eligible for dependent status on 1040's, so the question of how (and/or if) they should be taxed on employer provided health insurance is a poser.
Add in all the confusion about COBRA/ARRA, and you've got the makings of a real mess.
Fortunately, Benefits Attorney Frank Palmieri has the answer: a resounding "No!"
The issue is one of imputed value; that is, the monetary benefit of insurance, um, benefits. To the extent that these are (currently) not taxable for "regular" dependent coverage, the question of how they're treated for "non-traditional" arrangements becomes problematic. There was some concern that the new COBRA/ARRA rules in some way affected the taxation of these benefits with regard to DP's, but this appears to be a non-starter.
Well, so far, anyway.
[Thanks to reader Jeff M!]
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