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- Same-sex married couples will be able to file joint federal tax returns and they will no longer be liable to pay estate taxes on property they receive if their spouse dies.
- Employers will be required to extend the same benefits to same-sex spouses that they extend to opposite-sex spouses. However, organizations that self-insure their health insurance do not have to comply with state insurance law mandates. If employers that are self-insured decide not to provide the same health care coverage to same-sex spouses that they do to opposite-sex spouses, they are likely to face challenges of discrimination now.
- Employees with same-sex spouses will no longer have to pay federal income taxes on the value of the employer's contribution to their spouses' medical, dental and vision coverage. Same-sex spouses will be able to pay for their coverage on a pretax basis under Section 125 plans. They will also be able to share money in a FSA, HRA and HSA.
- Employers will now have to offer COBRA coverage to same-sex spouses when their coverage ends.
- Pension plans will now have to recognize same-sex spouses when determining surviving spouse annuities. 401(k) plans will also need to treat same and opposite-sex spouses equally.
- Family and Medical Leave can now be taken by same-sex spouses to care for one another when necessary.
I've read that there are more than 1,000 federal benefits that involve marital status. I'm obviously just hitting on some of the key items that have impact in the workplace.
Questions that remain:
- Can same-sex spouses claim some of these benefits retroactively e.g., can they amend previous years' tax returns?
- If a couple was legally married in one state, but currently resides in another that does not recognize same-sex marriages, which state law governs?
- How are employers with employees residing in multiple states going to handle eligibility?
- If an employee with a same-sex spouse is legally married, but resides in a state where their union is not recognized; how do you handle HSA and FSA contributions?
- How quickly must employers revise their plans and policies to include same-sex spouses?
Next steps for employers:
- Identify all your same-sex married couples and what state they reside in.
- Familiarize yourself with the laws in each state noting which states where same-sex marriage is legal. There are currently nine states where marriage licenses are issued to same-sex partners -- Connecticut, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont, Washington and the District of Columbia. Five additional states allow civil unions, providing state-level spousal rights to same-sex couples -- Delaware, Hawaii, Illinois, New Jersey, Rhode Island.
- Review your current benefit plans and policies to determine whether they are in compliance now or need to be amended. Prepare to amend your Section 125 plan documents and extend COBRA benefits to same-sex spouses that lose coverage. Review and amend HSA, HRA and FSA plan documents to allow same-sex spouses to claim reimbursements.
- Review your current policies and be sure same-sex spouses are treated the same as opposite-sex spouses. Pay particular attention to Family and Medical Leave.
- Contact your payroll administrator. Stop calculating the employer contribution to same-sex spouses' coverage as income and allow your employees to pay for their portion of the coverage with pre-tax dollars if you have a Section 125 plan.
- Determine what actions you need to take now and which issues require further guidance from the federal government or courts.
- Plan a mid-year open enrollment for same-sex spouses that are impacted by the changes. Coordinate with your insurance carriers and benefits enrollment systems administrators.
- Communicate your findings and the timeline for making any changes to your employees.
- For employers that have offered benefits to domestic partners, determine if you will continue to provide benefits to same-sex partners or require that same-sex partners marry to receive spousal benefits in the future.
It's going to require a little patience to get all the details of this change sorted out. When we contacted our payroll carrier, we were told they are working with the government to resolve the issues. They assigned us a case number and said they'd get back to us.
- Now What? Employer Benefits Obligations Post-DOMA ~ SHRM 6/26/13
- Defense of Marriage Act unconstitutional: Supreme Court ~ Business Insurance 6/26/13
- Federal officials outline health, life insurance options for employees in same-sex marriages ~ Washington Post 6/28/2013
- The Supreme Court's Decision on DOMA and its Impact on Group Health Plans ~ Alliant 7/1/13
- Employer benefit obligations change post-DOMA ~ BenefitsPro 6/27/13
- All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes ~ U.S. Department of the Treasury 8/29/13
- Walmart's Same-Sex Benefits Move: Why It Matters ~ Associations Now 9/3/13
ERISA rights extended to all married same-sex couples ~ Business Insurance 9/18/13
IRS releases more guidance on benefits for same-sex spouses ~Business Insurance 12/17/13