The Supreme Court of the United States (SCOTUS) announced a couple of decisions that will impact HR departments in many states. The major decision that attracted the most press was that a part of the Defense of Marriage Act (DOMA) was declared unconstitutional. As a result benefits managers nationwide will be busy.
The part of DOMA that was declared unconstitutional was section 3 which had passed into law the non-recognition of same-sex marriages for all federal purposes, including insurance benefits for government employees, Social Security survivors’ benefits, immigration, and the filing of joint tax returns. The SCOTUS decision did not deal with Section 2 which gave states the right to determine the legality of same-sex marriages. According to an alert by Seyfarth Shaw “The Justices writing the majority opinion made clear that the opinion and its holding are confined to lawful same-sex marriages in those states that recognize them.”
A long list
The list of areas that will be impacted by the SCOTUS decision is a long one. Over 100 Federal benefits will be altered as a result. Employers need to understand the impact of this change, within the guidelines of their states, in the following:
- Changes in defined benefit plan designations of “spouse;”
- Changes in designations of beneficiaries that are not the spouse;
- Changes in the hardship withdrawals definitions in 401(k) plans;
- Changes in Qualified Domestic Relations Orders (QDROs);
- Tax changes related to “spouse” definition;
- ACA changes and COBRA changes;
- Changes in pre-tax elections;
- Changes in FSA definitions.
These are just some of the changes that each company will have to determine based upon their state laws and their plan definitions. Every company should seek counsel from their attorney about their particular situation.
Paving the way?
In a January post entitled A Legislation Prediction- ENDA I said “Based on several of different indicators I feel that the Employment Non-discrimination Act (ENDA) will have a chance to pass. Not a great chance, but better than any other employment legislation in 2013.” Well the declaration of SCOTUS on DOMA is one more indicator that ways favorably in direction of this legislation passing. I don’t think it will pass in 2013 but it may receive some favorable activity in early 2014. Stepped up activity on the part of the EEOC in prosecuting discrimination cases based on LGBT discrimination, even without the benefit of the law, also indicates a move in the direction of the law being enacted.
Guidance on DOMA
I read a number of good articles written by law firms that I want to point you to for further guidance. This is going to be a complex issue that will require some further clarification by the courts or lawmakers before the dust is settled. The articles include:
U.S. Supreme Court Ruling Affects Benefits for Same-Gender Spouses written by Durward James Gehring, Jonathan D. Karelitz, Joy Sellstrom, Fredric S. Singerman of Seyfarth Shaw
Love Is Love, But in Light of DOMA Employers Should Adjust Health, Retirement, and Tax Planning found at J.D. Supra Law News
U.S. Supreme Court Rules Federal Law Defining “Marriage” Is Unconstitutional written by the attorneys of Ogletree Deakins.