Same Sex Marriage: Effect on Benefits
The United States Supreme Court recently held in Obergefell v. Hodges http://www.supremecourt.gov/opinions/14pdf/14-556_3204.pdf that all states must recognize and allow marriages between same sex partners. Depending on an employer’s current employee benefits plan, certain provisions may need to be changed in light of this ruling.
For those employers who already provide spousal benefits to same sex partners, no changes will need to be made to their benefits policies. However, tax reporting for those employers may be simpler. States that did not recognize same sex marriage prior to Obergefell will now recognize those marriages for state tax purposes, allowing employers to treat the spouses as married for both state and federal tax purposes.
For those employers who currently provide benefits only to opposite sex spouses and not same sex spouses, their benefits policies may need to be amended to provide same sex spouses with all spousal benefits to the extent mandated by law. Such changes for qualified retirement plans should have been made by the end of last year to provide federally required spousal benefits. This change was required as a result of the Supreme Court’s 2013 decision in United States v. Windsor finding the federal Defense of Marriage Act unconstitutional. (See our blog posts here http://benefitsnotes.com/2013/09/federal-agencies-issue-guidance-that-valid-same-sex-marriages-recognized-for-all-federal-tax-purposes/ and here http://benefitsnotes.com/2013/07/supreme-court-strikes-down-federal-defense-of-marriage-act-open-questions-for-benefit-plan-sponsors/ on Windsor.) Changes are now likely to be needed for state law benefits, such as leave laws, state health care continuation requirements and the like. Employers should also consider providing same sex spouses with all of the spousal benefits provided to opposite sex spouses, no matter if the spousal benefit is mandated by law. The federal Equal Employment Opportunity Commission’s current position is that disparate treatment based on sexual orientation is a form of sex discrimination under Title VII. Thus, employers covered under the federal nondiscrimination law who do not provide same sex spouses with all of the same benefits as opposite sex spouses risk potential liability under that law.
Finally, employers who currently provide benefits to non-spousal domestic partners may decide to reconsider those policies to provide benefits only to spouses. Such a change is not necessary but would simplify benefits administration because marriage is typically more easily documented than a domestic partnership.
Employers with questions about their obligations in light of the Supreme Court decision should consult with their benefits counsel about their alternatives.
** Thank you to summer associate Courtney Harrison who assisted with this post. **
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