This article and this article in the Virginian-Pilot say that "[i]nsurance companies licensed to do business in Virginia can only underwrite group policies to cover family members defined as spouses or dependent children," and implying perhaps that this law is some kind of equal protection or due process violation.
This struck me as a very strange conclusion - if this is a legal problem, is state law to blame? My first guess about where to look for the answer to just about any employee benefits question would be to go to the federal tax law - to state the matter in terms as crude as my understanding of it, isn't the whole deal with group health insurance about taxes? And taxes might be the real issue here, as suggested in this FAQ item from the IRS website, which says, among other things:
"Cafeteria plans can offer health insurance to employees, their spouses and their dependents. However, a same-sex domestic partner can never be deemed to be a spouse. See Defense of Marriage Act, Public Law 104-199. . . . The domestic partner and dependents in this case may not be participants in a cafeteria plan because they are not employees, but the plan may provide benefits to them. . . . If the domestic partner and his or her child do not qualify as the employee's dependents, those individuals may receive coverage under the cafeteria plan on a taxable basis. This means that the fair market value of the coverage for the domestic partners and his or her child must be included in the employee's wages for purposes of income tax withholding, FICA and FUTA taxes. See question and answer 65 from Chief Counsel Advice 200117038."
This snippet of knowledge (regarding a local government plan, which might make a difference, I don't know) makes me wonder if the reporting of this story is a bit off the mark. Maybe the gurus at BenefitsBlog, Tax & Biz, or A Taxing Blog know more. The article says this issue is made timely by the Supreme Court ruling on sodomy, which might be true, as evidenced perhaps by discussion such as this and this and this (and all those that preceded them) from Eugene Volokh, not to mention the recent call for divine reform of the Supreme Court from the Tidewater's own Dr. Pat Robertson.