P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

GEORGIA C. OHM, Complainant


a Division of Samuels Strapping System (Tennessee, Inc.), Respondent

ERD Case No. 199602375, ERD Case No. 199602289

An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modifications:

Delete paragraphs 7 through 12 of the Findings of Fact and substitute therefor the following:

7. A collective bargaining agreement exists between the Respondent and the union to which both Gary Veltus and Delano Ohm belong, District No. 10 of the International Association of Machinists and Aerospace Workers. Under this collective bargaining agreement, all hourly employes are provided health insurance coverage without the requirement that they contribute anything towards the premium. Under certain circumstances, such hourly employes are also given "family" coverage, by which certain family members of the hourly employe may be covered. There is an annual deductible of $200 for individual coverage, and $400 for family coverage, and there is also a partial co-pay requirement on claims once the deductibles are met, amounting to 20% of additional covered charges up to an annual maximum of $1,000 for individual coverage and $2,000 for family coverage.

8. Salaried employes of Respondent, who are not covered by a collective bargaining agreement, are not directly provided health insurance coverage, as hourly employes are. Instead, each salaried employe is provided a fixed amount of money ($1,400 per year) which that employe can then spend on various fringe benefits, including group health insurance coverage plans made available by Respondent. Under certain circumstances, salaried employes are also allowed to purchase "family" coverage versions of these plans, by which certain family members of the salaried employe may be covered. The health insurance coverage options available for them to purchase include an HMO plan that pays 100% of covered expenses (except for dental). If a salaried employe spends less than the $1,400 allowance on fringe benefits, he or she is paid the balance in cash.

9. Under both the hourly employes' plan and the salaried employes' plan, the "family coverage" options provide insurance coverage for the covered employes' "dependents". Under both plans, a "dependent" is defined as including a spouse who is not legally separated, and unmarried children (including both natural children and other children living with and economically dependent on the employe) who are either under age nineteen or are full-time students under age 25 (salaried employes' plan) or 23 (hourly employes' plan). Neither Jerilyn and Gary Veltus nor Georgia and Delano Ohm had any children eligible for coverage as "dependents" under the health insurance programs offered by Respondent.

10. Both the hourly employes' plan and the salaried employes' plan provide, that if any dependent of an employe is himself or herself "eligible under this plan for a coverage as an employe"(emphasis added), that person can not be eligible for that coverage as a dependent. Thus, if two hourly employes of Respondent are married to one another, neither can carry the other as a dependent under his or her insurance coverage; and if two salaried employes of Respondent are married to one another, neither can carry the other as a dependent under his or her insurance coverage.

11. The salaried employes' plan provides that the term "dependent" does not include "a person who is covered under any other group plan or program toward the cost of which the Company contributes" (emphasis added). The hourly employes' plan does not contain a similar provision, but the Respondent applies the plan as if it did; in addition, the salaried employes' plan provides that salaried employes may not forego purchasing their own health insurance unless they "submit proof of other medical coverage" (emphasis added), and Respondent applies the term "other insurance" to mean insurance provided by a source other than Respondent. Thus, in practice, if an hourly employe of Respondent and a salaried employe of Respondent are married to one another, neither can carry the other as a dependent under his or her insurance coverage.

12. Because Complainants were not eligible to be covered as dependents under their husbands' insurance coverage (which in any event would not have been from a source outside of Respondent's health insurance plans), and since they had not privately purchased any other outside health insurance coverage, they were not permitted to forego purchasing health insurance coverage with their $1,400 annual allowance. Because their husbands were covered under another group plan toward the cost of which Respondent contributed, the Complainants were also not allowed to select a "family coverage" option covering their husbands as dependents. They therefore each selected "single" coverage, choosing the Compcare HMO option, which cost $1,214 of their $1,400 allowance.


The decision of the administrative law judge (copy attached), as modified, is affirmed.

Dated and mailed: July 22, 1997
ohmvelt.rmd : 110 :

/s/ Pamela I. Anderson, Chairman

/s/ David B. Falstad, Commissioner


This case involves an allegation that the employer discriminated on the basis of marital status when it imposed limitations on certain employes, whose spouses were also employes of the employer, in connection with their options under employer- provided health insurance coverage.

This general kind of issue has recently been addressed in Motola v. City of New Berlin (LIRC 07/31/96), aff'd. sub. nom. Motola v. LIRC, Waukesha Co. Cir. Ct.(1/27/97), and Genther v. City of Kenosha (LIRC 07/31/96). Those cases concerned employer policies that prohibited employes who were married to one another from each having their own separate insured status, and which forced one of them to take a plan which covered their spouse as a dependent.

The specific facts are different here -- in fact, the situation here is the reverse. In this case, employes of Respondent who are married to one another are each entitled to their own insurance coverage, and they are prohibited from electing a plan which covers their spouse as a dependent.

The complainants here object to this because, given the terms of the health insurance benefit plans offered by the employer, there are circumstances under which they could turn their married status to their financial advantage in ways that single persons could not -- but those circumstances are foreclosed by the employer's policy. (1)

The question, is whether this involves differential treatment because of marital status; and if so, whether it is unlawful marital status discrimination within the meaning of the Fair Employment Act.

The Administrative Law Judge decided that this was not unlawful marital status discrimination under the Fair Employment Act, on the authority of Kozich v. Employe Trust Funds Board, 203 Wis. 2d 363, 553 N.W.2d 830 (Ct. App. 1996). That case concerned a policy that, if two state employes are married to one another, each could elect to take single insurance coverage, or one could take family insurance coverage covering himself or herself and their spouse as a dependent, but they could not both take insurance coverage in such a way that one or both was actually covered under two separate coverages (i.e., if one took family coverage covering the spouse as a dependent and the spouse also took their own single coverage). In Kozich, the court reasoned that the legislature, presumably aware of the state's practices as an employer, must not have intended to make this practice unlawful. In Motola, the commission looked to Kozich and decided that if this was not unlawful discrimination when a practice of the state as an employer, it could not be viewed as discrimination when it was the practice of some other employer.

The commission agrees with the Administrative Law Judge's application of Motola. Even though the practices here are different to some extent in their specifics from the practice challenged in Motola (and Kozich), still they are functionally similar, in that they involve employer limitations on the options allowed to its employes who are married to one another, which limitations are designed to avoid a situation in which the employer actually purchases coverage twice for the same employe.

However, the commission also believes that Respondent's practices do not treat persons differently based on whether they are married persons as opposed to single persons. Instead, these practices treat some persons with dependents differently from other persons with dependents, based on whether or not their dependents are themselves eligible for coverage under the employer's insurance program(s). The commission affirms the Administrative Law Judge's decision both for the reasons described by the Administrative Law Judge, and alternatively because of the commission's view that this case does not involve differentiation based on "marital status" at all.

"Fairness" -- The commission wishes to note that it does not subscribe to the view of the Administrative Law Judge, that "it may arguably be unfair to distinguish situations involving the provision of health insurance benefits where spouses are employed by the same employer from situations involving the provision of health insurance benefits where spouses are employed by different employers". The commission believes that there is a distinction between the two situations described in the ALJ's comment, which provides a good reason for the practice of the Respondent herein.

When an employe could be covered under another person's insurance, their employer may feel that it would save them some money to have that happen. However, that employer really loses nothing if this does not happen; the employer would have to pay for that person's insurance anyway but for the existence of other coverage. In such a case, the issue is whether the employer will pay for the employe's coverage once, or not at all. However, when two employes of the same employer are married to one another, it is clearly an unnecessary added expense for the employer to purchase insurance coverage for one of them twice, as they would do if they purchased family coverage for one which covered the other as a spouse, and also purchased separate coverage for that spouse. In such a case, the issue is whether the employer will pay for the employe's coverage once, or twice.

It is certainly true, that it is not fair to force an employe who could be covered under the insurance of a spouse employed elsewhere, to give up what would otherwise be their right to their own coverage status, so that their employer can avoid paying for their coverage at all. However, it is also unfair to force an employer to pay twice to provide one of its employes with two separate coverages, one as an individual insured, and one as another insured's dependent. For these reasons, the commission has no reservations about the fairness of the result reached in this case.

NOTE: The commission had no disagreement with any of the material findings of fact made by the Administrative Law Judge. It has modified the Findings of Fact in order to describe more fully the nature of the practices at issue in this case.

cc: Gregg M. Formella, Attorney for Respondent

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(1)( Back ) If Complainants could elect family coverage, their husbands could obtain coverage which did not require deductibles and co- payments -- a benefit hourly employes of Respondent would never be able to obtain if they were single. Alternatively, if the Complainants' husbands could elect family coverage and the Complainants were allowed to forego buying insurance coverage themselves, they could keep much more of their $1,400 benefit allotment in cash -- again, a choice that few if any single salaried employes of Respondent would be able to make unless they were somehow covered under some other policy (an unlikely situation, since under most insurance plans, like the ones here, they would have to actually be young, financially dependent children of someone else to obtain dependent coverage status).