Benefits Consideration Post – DOMA
All Employers and Employees
July 21, 2013
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UPDATE: Please view our more recent HR Alert concerning this topic, available HERE.
On June 25, 2013, the U.S. Supreme Court ruled a section of the federal Defense of Marriage Act (DOMA) to be unconstitutional. This ruling now recognizes the legal union of same-sex couples in 12 states and the District of Columbia. While the court ruled part of DOMA as unconstitutional, it does not appear that this decision will be forced on states that currently do not recognize same-sex marriage and allows these states to continue to define marriage as the populist wants.
Provided there are no challenges in which the U.S. Supreme Court is asked to reconsider its decision, in July 21, 2013, private sector employer’s benefit obligations will expand to married same-sex couples where this union is recognized. Expanded benefit obligations include:
- Federal law governing employee benefit plans will require the company to treat employees’ same-sex and opposite-sex spouses equally for benefits extended to spouses.
- COBRA continuation coverage to be offered to same-sex spouses.
- 401(k) Plan death benefits will need to recognize same-sex spouses and same-sex spouses must consent to beneficiary designations.
- Pension Plans will need to recognize same-sex spouses for purposes of determining surviving-spouse annuities.
- Employees will be permitted to take family and medical leave to care for an ill same-sex spouse.
- Employers may need to cease imputing income to employees for the value of the health benefits provided to same-sex spouses.
There are questions that remain due to this ruling, such as: will benefits be retroactive? What about benefits if the same-sex married couple moves to a state that does not recognize same-sex marriages? What determines marriage status? Federal law or state law? The state where the marriage occurred, or the state where the same-sex couple resides? These questions will need to be determined by executive order or legislation.
- With Open Enrollments beginning on August 1, 2013 and going forward, employers will need to offer the same benefits to a same-sex spouse as offered to an opposite-sex spouse.
- Beginning July 21, 2013, a same-sex spouse will need to be offered COBRA continuation coverage.
- For 401(k) and/or pension plans, it is advisable to distribute beneficiary designation forms to all participants for optional completion.
- Review leave policies and notify management staff of eligibility of same-sex spouse to take family and medical leave.
- Watch for IRS guidelines on imputing income to employees for the value of same-sex spousal premiums.
- Look for continued information from ManagEase as the full impact of the ruling against DOMA is assessed and implemented.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.
© 2013 ManagEase, Incorporated.
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