July 18, 2013
In United States v. Windsor (June 2013), the US Supreme Court held that Section 3 of the Defense of Marriage Act (DOMA) was unconstitutional on Fifth Amendment grounds. DOMA Section 3 defined the terms “spouse” and “marriage” for purposes of federal law (including the Internal Revenue Code and ERISA) as being solely between one man and one woman. As a result of the decision, spouses in same-sex marriages in states that allow those marriages will have the same rights and obligations under federal laws as spouses in opposite-sex marriages, including rights under the federal laws that govern health and retirement plans.
The decision will have a significant impact on employers who sponsor employee benefit plans, including benefits offered to spouses in same-sex marriages that are recognized by the federal government for benefit purposes (Federally Recognized Spouses). For example, for an employer in a same-sex marriage state with a health plan that provides benefits to same-sex spouses of employees residing in the state, health coverage provided to Federally Recognized Spouses is tax-free to employees, without a showing of tax dependency. Also, for retirement plans:
- A participant’s Federally Recognized Spouse now has the right to receive survivor benefits or must consent to a waiver of these benefits.
- It appears the retirement plan must honor the qualified domestic relations order (QDRO) of a Federally Recognized Spouse.
In the Practical Law Expert Q&A article linked below, Stoel Rives attorney Howard Bye-Torre addresses new obligations and questions for employers following the Windsor decision, including changes in the taxation of health coverage provided to same-sex spouses, the ruling’s effect on health care reform provisions, and the decision’s additional impact on retirement plans, HSAs, HRAs and flexible spending accounts.
To read the full Expert Q&A, see: http://us.practicallaw.com/4-533-6905