U.S. Supreme Court Ruling on Same-sex Marriage Rights and Employee Benefits

By Alexandra Jesse & Mary Athappilly, Read/Post Comments

The Supreme Court of the United States issued two decisions on June 26, 2013.  The Court struck down key provision of the Defense of Marriage Act (DOMA). This Act denied same-sex married couples certain benefits under federal law.

The Court determined that Proposition 8 lacked standing and the appeal was not heard.  The Proposition limited marriage to one man and one woman in the state of California.  However, this ruling could allow for retroactive reimbursements, wherever same-sex marriage is recognized. These reimbursements could be for federal tax benefits that are now available on a pre-tax basis.

Impact on Employers
Employers should evaluate their benefit plans to make sure they comply when the timelines are released by the government.

Eligibility for Benefits
The people who are eligible for these benefits are same-sex spouses who were married in a state that allows and/or recognizes same-sex marriage. 

Employees in Different States
If an employer has employees in different states it is important to understand which states are subject to these new rules and plan accordingly.

Effective Date of Changes

The exact effective date of any or all of these changes has not been issued.  Guidance is expected from the Department of Labor and the IRS.

Pre-tax Payroll Deductions (IRS Section 125)
The cost of covering a same-sex spouse under a group plan has been apost-tax deduction on the employee’s paycheck.  The result is that the employee may deduct this cost as pre-tax deduction.

Also, if the employer covered the premium for a same-sex spouse then that premium was considered imputed income for the employee.  This will no longer be the case.

Enrollment in a Group Health Plan
An employee was able to enroll their same-sex spouse in their group health plan usually only during the open enrollment period.  The enrollment will be the same for opposite and same-sex spouses.  This is usually within 30 days of the date of marriage, when the spouse no longer has access to their own group plan, and during the group plan open enrollment.

HSA, FSA, HRA (Health Savings Account, Flexible Savings Account, Health Reimbursement Arrangement)
Employees have not been able to include health expenses for their same-sex spouses.  Going forward expenses under these plans will be recognized the same for opposite and same-sex spouses.

COBRA (Consolidated Omnibus Budget Reconciliation Act)
Many employers have been providing COBRA benefits to same-sex spouses on a voluntary basis.  It will be mandatory for all employers, who are required to be compliant with COBRA, to extend to same-sex spouses.

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FMLA Benefits (Family Medical Leave Act of 1993)
Employers, who employ at least 50 employees, are required to provide 12 weeks of unpaid leave, with health plan continuation, to employees who have a qualifying event.  This event could be to care for an ill opposite sex spouse.  Same-sex spouses are now included.

QDRO (Qualified Domestic Relations Orders)
Opposite sex spouses and now same-sex spouses are included.

This is general information and is not intended as legal and/or tax advice.


-Baker & McKenzie June 26, 2013, legal alert email, “U.S. Supreme Court Decisions Affecting Employee Benefits Offered to Same-Sex Married Couples”
-Flex-Plan June 26, 2013, “Supreme Court Ruling on DOMA and Proposition 8”
-Health and Human Services June 26, 2013, “Statement by HHS Secretary Kathleen Sebelius on Supreme Court Ruling on Defense of Marriage Act”
-Jackson Lewis June 26, 2013 “U.S. Supreme Court Rules Legally-Married Same-Sex Spouses Entitled to Federal Recognition and Lifts California Ban on Same-Sex Marriages”
-Seattle Times June 26, 2013, “Victories for Gay Marriage but still not law of land”
-New York Times June 26, 2013, “How the Court’s Ruling Will Affect Same-Sex Spouses”