Most employers are aware that the federal Defense of Marriage Act (DOMA) defines marriage as the union of one man and one woman for federal law purposes, including federal tax and benefits law. For benefits governed by ERISA, this means that state laws that recognize same sex marriages are preempted. Although for some benefits (e.g., health plan benefits) an employer could choose to recognize same sex partners, for other federal benefits (e.g., qualified domestic relations orders (QDROs) dividing pension or 401(k) benefits), an employer is not permitted to treat a same sex spouse under state law as a spouse under the pension plan.
The Obama administration has determined that it can no longer defend DOMA against constitutional challenges in lawsuits that have been filed raising that issue. However, the administration intends to continue to enforce the law until it is either repealed or held unconstitutional in a final court decision. Congress has chosen to defend the law in some of the suits that have been filed.
In the meantime, at least some courts have held that the law is unconstitutional. The most recent decision is Golinski v. US Office of Personnel Management, in which a US District Court judge ordered the federal government to honor an employee’s request to enroll her same sex spouse in the federal employees health benefits program. The two were married during the time that same sex marriages were permitted in California. An earlier decision in Massachusetts ordered the federal government to allow legally married same sex spouses access to social security benefits (e.g., death benefits) and benefits available to legally married opposite sex spouses of federal employees (e.g., spousal health coverage).
So far the cases affect the federal government and the benefit programs that it maintains. However, if the law is ultimately declared to be unconstitutional, employers will be obligated to recognize same sex spouses as spouses for purposes of their benefit plans where spouses are given rights under federal law. These would include QDROs (as mentioned above), rights to death benefits, including qualified joint and survivor annuities in retirement plans, and COBRA and special enrollment rights under health plans, among others. These rights would not extend to unmarried domestic partners. Employers might also be obligated to recognize same sex marriages contracted in other states even if the state in which the employer does business does not recognize such unions.
Whether or not operating in a state that recognizes same sex marriages employers should pay attention to this developing area of the law.