Days after the Supreme Court of the United States (SCOTUS) overturned the Defense of Marriage Act (DOMA), HR professionals began to prepare for the implications of the new ruling on their business.
At the time of the Court’s ruling, 12 states as well as Washington, DC legally recognized same sex marriages. These states include Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, and Washington. On Friday following the decision, the 9th U.S. Circuit Court of Appeals ruled that same-sex marriages could resume in California bringing the total to 13 states plus the District of Columbia.
For same sex couples married in these states, spouses are now legally entitled to the same benefits afforded opposite sex spouses. Beyond this, there are still many questions and issues that will need to be resolved by future interpretation and guidance from federal agencies.
For example, what are the rights of same-sex spouses to receive reimbursement under self-insured health insurance programs with respect to claims previously incurred? Does the surviving spouse of a same-sex couple have the right to file and claim death benefits for which they were not previously eligible?
HR Areas of Impact
Health Insurance Plans: Under the DOMA ruling, employees will now be able to deduct the cost of their same-sex spouse's health-insurance costs. You should contact your insurance provider for insured health plans, and your third party administrator for self-insured health plans to develop a strategy to deal with coverage and payment of benefits to same-sex spouses.
Employees will now be entitled to reimbursements under health reimbursement accounts and health savings accounts (HSAs) for expenses incurred by their same-sex spouse. A single-family contribution limit applicable to HSAs will apply to same-sex couples (same-sex couples were formerly entitled to twice the family limit).
Flexible Spending Accounts: Same-sex spouses will now be eligible to set aside pre-tax money into these accounts, which helps reduce the employee's tax bills.
Tax Liability: Tax liabilities are calculated based on the taxable income of your employees. If the total taxable income of your employees decreases because they are able to deduct the cost of their same-sex partner's health insurance and flexible spending plans, your tax liability may also decrease.
The Internal Revenue Service (IRS) will have to issue clarifications around the ruling to help employers comply with the law. There are immediate questions for same sex couples that work in a state that recognizes their marriage but live in a state that does not. Further, the IRS will need to issue regulations regarding filing amended returns for same sex couples who were denied certain benefits in previous years and are now entitled.
FMLA: The Department of Labor has taken the position that the Family and Medical Leave Act (FMLA) was a federal law and as such accepted the federal definition of spouse under DOMA. The Court’s ruling now clears the way for application of the FMLA to same-sex spouses in states that recognize same-sex marriage.
COBRA: Same-sex spouses will be able to claim COBRA continuation healthcare coverage in the event they lose their employer-provided coverage due to a COBRA qualifying event.
Retirement Benefit Plans: Same-sex spouses will be entitled to survivor benefits, including those available under the qualified joint and survivor annuity and qualified preretirement survivor annuity rules applicable to pension plans.
Again this is an area that requires clarification on whether the ruling is prospective, i.e. effective the date of the Court’s ruling or retroactive, i.e. effective as of the date when DOMA was enacted.
Thus, when the Court struck down the definition of marriage as between one man and one woman, the ripple effect will be felt for quite some time as employers and employees reconfigure their benefits plans in order to comply with the law.
Need to find a great job or a great employee? We can help. Visit us here for more information!
- Mental & Emotional Health Insights Through Animal Research
- Mental Health First Aid Hopes to Create Citizen First Responders
- Mental Health: How Pixar's "Inside Out" Reveals Our Internal Battles
- Improving Your Mood Without Therapy - Through the Eyes of Your Pet
- Alzheimer's Care Advancement - As Close As the Corner Store
- Bon Jovi Lends Support to Behavioral Health Services Center