What’s Next for Employers After the Same Sex Marriage Ruling?

Rainbow America

The Supreme Court has held that states have to recognize and sanction marriages between couples of the same sex just like they do for couples of the opposite sex. Employers will ask what that means for them, their employees and their benefit programs. 

One thing the Obergefell v. Hodges ruling can do is to make life much easier for employers and their human resources departments.

Complications of Status Quo Ante

After the Defense of Marriage Act (DOMA) was passed in the ‘90s, life became increasingly complicated for employers. States had different laws on domestic partnerships, civil unions and same-sex marriages. They changed a lot, had different requirements and they all differed from the federal law in DOMA.

Moreover, many employers heard about discrimination against opposite-sex domestic partners and often broadened the coverage in their plans to include unmarried domestic partners regardless of their sex.

All of that meant complex tax and reporting schemes that were often misunderstood by employers and their employees.

New Rules May Simplify Benefits Greatly

Probably one of the most profound effects of the court’s decision is to mandate equal treatment under applicable law of employee same-sex spouses in connection with employer provided benefits. With this ruling, employers have an opportunity to harmonize all their programs and make a simple determination regarding married employees versus those with domestic partners or civil unions.

Of course, if employers want to keep those broader definitions they are free to do so.  However, it is those non-married beneficiaries that cause the complexities that we suspect many employers will want to avoid. Requiring all beneficiaries to be married to their employees would make that much simpler.

Given this new decision, employers should review their benefit plans and handbooks to specify that same-sex couples are provided the same rights and privileges as heterosexual couples. Employers should also review their FMLA policies accordingly.

About Jay Kirschbaum

Jay spent 22 years as a tax attorney specializing in employee benefits before joining Willis in 2001. He is current…
Categories: Health and Group Benefits, Retirement | Tags:

Leave a Reply

Your email address will not be published. Required fields are marked *