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The Definition of "Spouse" and "Marriage" is Now Governed by State Law and Those Laws are Changing Fast

Leaving More Questions Than Answers, the Decision on DOMA Affects Many Employers

On June 26, 2013, the United States Supreme Court issued a landmark decision regarding same-sex marriage.  The ruling not only redefines “spouse” and “marriage” but also means that a same-sex marriage recognized at the state level is now considered a legal marriage at the federal level.  The ruling leaves many unanswered questions regarding when same-sex marriages will be considered valid for purposes of employee benefit plans. 

Employers in states that either issue marriage licenses to same-sex couples or recognize same sex marriage from another state, are all busy addressing their policies regarding pension rights and other benefits previously available only to married heterosexual couples.  With a completely new definition of the word “spouse” on the books, you would think that would be enough to focus on but most employers we have polled are more concerned with the deeper complexities that lie within.  The devil is always in the details.

  • Can a widowed same-sex spouse who previously was not able to claim spousal benefits, now be in a position to request death benefits?
  • Does the change of status qualify alterations to be made outside of a company’s annual open enrollment period?
  • Is it the state of residence at the time of pension payments or when the benefits accrued?
  • If a same-sex couple legally marries in the state they live in, but then moves to a state that does not recognize same-sex marriages, is the couple still treated as married for federal employee benefit purposes? What if only one party moves to the other state?
  • To what extent, if any, will same-sex marriages be recognized retroactively and how might that affect minimum required distributions, maximum benefit limitations and taxes already paid?

These little details seem to be padding the pockets of our trusted attorneys and advisers, without whom I would not suggest proceeding.  If that is not enough, let’s all raise our hats to the poor multi-state employers.  For they are indeed in a sticky wicket.  Organizations that have employees in multiple states are left to flail about in the legal abyss as these laws are challenged in court for an unknown number of years.

It is important to note that the decision does not mean that all group health plans will be required to provide coverage to same-sex spouses. Insured group health plans are generally subject to state insurance laws, but self-insured group health plans allow employers the ability to choose the definition of spouse for purposes of eligibility and benefits.  All employers are well advised to be mindful of the state laws with which they are working, legal developments in their respective state(s), the type of plan they are employing, and the definition of spouse therein.  When in doubt, consult your legal experts.


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