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CalPERS sued over insurance exclusion

By Chris Rizo | Apr 14, 2010

SACRAMENTO, Calif. (Legal Newsline)--CalPERS, the nation's largest public employee pension fund, is being sued over the agency's refusal to sell long-term care insurance to same-sex spouses of state government workers.

The class-action lawsuit against the California Public Employees' Retirement System and the U.S. government was filed Tuesday in U.S. District Court in San Francisco, where the plaintiffs reside.

The lawsuit seeks to compel the CalPERS board to permit same-sex spouses and registered domestic partners of state government employees to enroll in the tax-protected long-term care program, which is available to state employees and their family members.

"Excluding same-sex partners from these plans -- while permitting so many other family members to enroll -- is deeply disrespectful, and harmful to public servants and their families. It also violates the Constitution," said Claudia Center, who represents the plaintiffs.

For its part, CalPERS says it cannot sell its long-term care program, which covers such things as nursing home care, to an employee's same-sex partner because the federal government, under the Defense of Marriage Act, does not recognize same-sex marriage.

The giant pension fund argues that the program's federal tax status could be jeopardized if it sells policies to same-sex spouses of state workers because the benefits are not taxed and policyholders pay the insurance premiums with pre-tax dollars.

The San Francisco-based Legal Aid Society-Employment Law Center filed the lawsuit on behalf of the three couples who are the plaintiffs. In addition to CalPERS, the U.S. Treasury Department and the Internal Revenue Service are listed as defendants.

CalPERS has more than 1.6 million members and more than $200 billion in assets.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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