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Benefit plans may be amended to favor same-sex spouses

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in Office Management,Payroll Management

The IRS disposed of most of the payroll issues regarding same-sex spouses in 2013 and 2014. Nevertheless, it’s issued guidance on the impact of the U.S. Supreme Court’s 2015 ruling in Obergefell v. Hodges, No. 14-556, that state laws prohibiting same-sex marriage are unconstitutional. The guidance stresses that retirement and health plan amendments made in the wake of Obergefell are discretionary.
  • Health and welfare plans that offer spousal benefits could require operational changes if state law now defines spouses to include same-sex spouses, as of the date of the change in state law
  • Cafeteria plans that are amended to allow coverage of same-sex spouses, and that allow employees to change their elections due to a significant improvement in coverage, may allow employees to make midyear changes to accommodate coverage of their spouses
  • Retirement plans may be amended to make certain optional changes or clarifications to provide new rights or benefits to same-sex spouses.

Caution: Amendments must not discriminate in favor of the highly compensated. (Notice 2015-86, IRB 2015-52)

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