Today the United States Supreme Court overturned Section 3 of the Defense of Marriage Act (“DOMA”) and reinstated a California judge’s order that Proposition 8 (the California ballot initiative defining marriage as between a man and a woman) is unconstitutional. Although it will take time to sort through the implications of these rulings (which depend somewhat on how they are interpreted by the federal government and individual states), they undoubtedly will have a substantial impact on employer-sponsored benefit plans.
What the Rulings Do
Section 3 of DOMA defines the words “marriage” and “spouse,” for federal purposes, as referring only to marriages between opposite-sex couples. As a result of DOMA, the legal marriages of same-sex couples were not recognized under any federal law, including the Internal Revenue Code and ERISA. This treatment of same-sex spouses as unmarried individuals had far reaching implications in the context of employee benefits and federal income taxation.
As a result of today’s ruling in United States v. Windsor, any federal statute that refers to a “marriage” or a “spouse” must be interpreted as applying with equal force to same-sex married couples, and same-sex couples who are legally married must now be treated the same under federal law as opposite-sex married couples. It is certain these changes apply to same-sex married couples who live in states that recognize same-sex marriage; it remains to be seen how they will apply to same-sex married couples who come to live in states that do not recognize such marriages.
There will be significant ramifications for employer-sponsored benefit plans in states where same-sex marriages are affected by the ruling: