The June 26 Supreme Court decision that overturned Section 3 of the Defense of Marriage Act (DOMA) may have broad social implications, but it will have very specific effects on HR.
The ruling in United States v. Windsor (U.S. Supreme Court, 12–307, 2013) means that in the 13 states (and the District of Columbia) where same-sex marriage is legal, all federal laws that provide benefits to married couples must now provide them to same-sex couples, too.
The most immediate effects involve taxes on pay and benefits. Legally married employees are entitled to tax advantages unavailable to single employees. The decision will affect payroll operations, as well as retirement and health insurance benefits.
“The Windsor decision significantly impacts the benefits and the associated tax rules related to same-sex spouse coverage under,” said Jason Rothman, an attorney with the employment law firm Ogletree Deakins. “Employers that sponsor plans must now review how spousal benefits are provided under the terms of their plans, as well as address the tax issues associated with such benefits.”
If you operate in a state where same-sex marriage is legal, start working now with your benefits providers. Among the questions to ask:
• Health benefits: Will any of your employees now claim same-sex partners as spouses entitled to be insured under family coverage?
What COBRA and HIPAA rights do same-sex spouses have? Are the children of nonworking spouses now considered stepchildren entitled to dependent coverage under the Affordable Care Act?
• Retirement benefits: What changes should retirement plan providers make to procedures and policies regarding the spousal rights of same-sex spouses?
Advice: Rely on your benefits brokers and administrators to keep up with Windsor-related developments.
The IRS must provide official guidance to implement many of the changes that are coming. An IRS statement said, “We will be working with the Department of the Treasury and Department of Justice, and we will move swiftly to provide revised guidance in the near future.” It offered no specific timetable.
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