[July 8, 2013] In a pair of highly anticipated decisions, a divided Supreme Court struck down the federal Defense of Marriage Act (“DOMA”), which denied federal benefits to same-sex married couples. Separately, by declining to decide a case, the court effectively allowed same-sex marriage in California. Neither decision declares a broad constitutional right to same-sex marriage for all American citizens.
The ruling in the DOMA case extends many benefits to same-sex married couples living in states that allow same-sex marriage. Employers in those states must review their employee-benefit packages to comply with the change, including their health and retirement plans. For example, same-sex married couples are now entitled to the same tax treatment of health-insurance premiums as opposite-sex couples. They are also entitled to the protections of the Family and Medical Leave Act (FMLA), social security, and COBRA. Same-sex spouses are further entitled to automatic beneficiary rights for pension plans and 401ks.
The issue is more complex for large, multistate employers. The Supreme Court did not address the effect of its decision on same-sex couples who marry in a state that permits such unions and then move to a state that does not. Federal benefits for such couples will vary by agency, and guidance from federal regulators may take time to develop.
Thus, employers in Massachusetts and other states that recognize same-sex marriage must identify any gaps between benefits they currently offer to same-sex married couples and benefits they are now required to offer. For example, such employers must review their plans and policies and remove provisions concerning taxation of health benefits for same-sex married couples. Employers must also be prepared to deal with issues concerning same-sex beneficiaries of pension plans and 401ks. As employers may face some of these changes without much advance notice (for example, a spouse’s automatic beneficiary rights upon death), employers may wish to move this issue to the top of their “to do” lists.