Effects of Same-Sex Marriage Rulings on Employee Benefits

March 2, 2016

On June 26, 2013 in United States v. Windsor, the United States Supreme Court opined that certain portions of the Defense of Marriage Act (DOMA) - the act barring the federal government from recognizing same-sex marriages - were unconstitutional. Consequently, same sex couples with a valid state marriage license are generally considered spouses under the new law.

Subsequently, on June 26, 2015 in Obergefell v. Hodges, the United States Supreme Court invalidated all state same-sex marriage bans. These rulings will generally have the largest impact on employers that have not historically provided the same employee benefits to same-sex spouses as they have offered to opposite-sex spouses.

To the extent the law requires the provision of employee benefits to spouses, the mandate will now generally encompass same-sex spouses. For example, COBRA must be offered to same-sex spouses upon the occurrence of a qualifying event. Similarly, same-sex spouses fall within the definition of spouse for retirement plan purposes (e.g., QDRO, QISA, designated beneficiaries).

Furthermore, other employee benefits that are not explicitly mandated by employee benefits provisions might have to be provided to same-sex spouses as well to ensure compliance with nondiscrimination laws. For example, federal and state nondiscrimination laws might prohibit disparate treatment of same-sex and opposite-sex spouses. In most cases, plan amendments will be required to comply with these new legal developments.

Due to the complexity and uncertainty in this area of the law, consulting with employee benefits counsel is especially crucial.

Excerpted from the Michigan Chamber’s Employment Law Handbook: Compensation & Benefits authored by attorneys from the Miller Canfield law firm.