The Supreme Court ruled that the Defense of Marriage Act's (DOMA) exclusion of same-sex unions from the federal definition of marriage "is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment."
As an employer and/or Human Resources professional, we know this is a far-reaching decision that will change many of our current processes. For years we have administered a separate set of rules for same-sex couples and this will now end for some employees. With same-sex marriages recognized by the Federal government, employers will need to begin awarding all their married employees with the same benefits.
- Pre-tax treatment of employee's and employer's premium contribution for spouse
- FMLA benefits to care for spouse with a serious health condition, care for military spouse with an injury/illness, or due to military spouse's active duty
- COBRA rights for spouse to continue coverage due to employee's termination of coverage or divorce/separation
- HIPAA special qualifying event when spouse loses coverage due to a change in employment status
- ERISA provided protection to spouse covered under employer's welfare and retirement plan
- Affordable Care Act established rules of providing coverage to spouses
- Health FSA available for spouse's qualifying expenses
- Dependent Care FSA available to spouse's child who is declared on the joint tax return
- Health Savings Account established for employee and spouse and subject to family contribution limit
- Beneficiary Designation on your 401(k) plan must include the spouse with a 100% benefit or have a notarized signature from spouse requesting a lower benefit
- 401(k) Plan a spouse is provided preferred distribution benefits in the event of an employee's death
What about Domestic Partners, are they now classified as married?
This ruling does not change the status or an employer's treatment of Domestic Partners. The ruling only applies to same-sex couples obtaining a marriage in a state that allows same-sex marriages. At this time, the federal government does not recognize a domestic partnership or civil union, so no new benefits are made available to this class.
Could I have any employees with a federally recognized same-sex marriage?
Yes, provided that the employee lives in a state in which same-sex marriages are legally recognized. States that currently allow same-sex marriages include Connecticut, Illinois, Iowa, Main, Maryland, Massachusetts, New Hampshire, New York, and Washington. In addition, Washington DC recognizes same-sex marriages. Delaware, Minnesota, and Rhode Island will recognize same-sex marriage in the next two months.
California has about 18,000 legally married same-sex couples. These were preformed prior to Proposition 8 amending the state constitution. With the Supreme Courts decision on Proposition 8, the final decision is put in the hands of the lower courts. We will likely see Proposition 8 struck down in the coming weeks. Once this is done, same-sex marriages will again be legal in California.
What Should I do now as an employer?
We recommend that employers communicate to employees how these changes will affect their current benefits. Also, employers should review their current practices to ensure they are providing equal benefits to opposite-sex and same-sex married employees. For example, if you ask for a marriage certificate from a same-sex couple you must do the same for opposite-sex couples.
The following is a sample communication piece to send out to your employees:
The Supreme Court reached a landmark decision on June 26, stating that the Defense of Marriage Act (DOMA) was unconstitutional. This decision provides same-sex married couples the same status within the federal government's guidelines as opposite-sex married couples. This ruling changes the availability of benefits same-sex married couples are eligible for through their employer including: pre-tax treatment of premiums, eligibility for FMLA, COBRA rights for spouses, access to reimbursement from your FSA, and 401(k) distributions in the event of an employee's death.
It is important to know that this ruling only pertains to same-sex couples who are legally married, not to domestic partners. This ruling has no impact on the federal government's treatment of domestic partner relationships.
If you have a federally legal same-sex marriage, please contact Human Resources immediately so we can update your records. If you become legally married, you have 30 days from the date of marriage to notify Human Resources and request the addition of your spouse to your benefits.
Please contact Human Resources if you have any questions.
are there any outstanding questions?
Yes, there are many questions that the federal government needs to review. The following are a few questions we are currently waiting to be addressed:
- Is the Supreme Court's decision a qualifying event allowing a same-sex spouse the right to add/remove coverage under the employer sponsored health plan?
- What are the guidelines for same-sex married couples to file an amended tax return?
- Are employers required to retroactively apply any benefits to employees of a same-sex marriage?
- How are same-sex couple benefits treated if married in a state where same-sex marriage is legal but live/work in a state where the marriage has no legal standing?
As these and other questions arise, we recommend that you seek guidance from an employment law and tax attorney or professional.