Author: Tracy Morley, XpertHR Legal Editor

June 27, 2013

After much anticipation, the Supreme Court handed down two 5-4 decisions, each with a different alignment of justices, in favor of same-sex marriage. One case related to the constitutionality of a key provision in the Defense of Marriage Act (DOMA) and the second case concerned Proposition 8, a California ballot initiative that banned gay marriage.

In United States v. Windsor, 2013 U.S. LEXIS 4921 (2013) the Court struck down section 3 of DOMA, which denies federal benefits to same-sex couples, as a violation of the US Constitution's guarantee of equal protection under the law. As a result of this ruling, married same-sex couples residing in states where same-sex marriages are legal are now eligible for over 1,000 federal benefits and protections linked to marital status.

The following are examples of how the Court's decision may affect employee benefit plans:

  • Employers with pension and 401(k) plans may be required to recognize same-sex spouses for the purpose of determining surviving spouse annuities or death benefits under retirement plans; and
  • Federal income tax treatment of health coverage may change since employees will no longer have to be taxed on the value of the coverage for the same-sex spouse.

Additionally, same-sex spouses would be afforded protection under the Consolidated Omnibus Budget Reconciliation Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act, immigration law and Social Security. However, these federal benefits and protections occur only in states where same-sex marriage is recognized.

Employers that operate in states that recognize same-sex marriage should continue to monitor developments that may clarify the full impact of the ruling.

The second case, Hollingsworth v. Perry, 2013 U.S. LEXIS 4919 (2013) challenged the constitutionality of Proposition 8, a California ballot initiative that limited marriage to only being between a man and a woman. The High Court ruled that the supporters of Proposition 8, ProtectMarriage.com (Hollingsworth) did not have the right to appeal the lower court's order striking down the law. Once the lower court's stay on gay marriage is lifted, same-sex marriages in California will resume. As a result, California employers are required to extend spousal benefits to all spouses, even if the employer is not subject to state insurance mandates requiring coverage for domestic partners.