26 Sep Agencies Issue Guidance on Same-Sex Marriages and Employee Benefits

Originally posted by United Benefit Advisors

Details continue to emerge on how the federal government will implement the decision of the U.S. Supreme Court that part of the Defense of Marriage Act (DOMA) is unconstitutional. On Sept. 18, 2013, the Department of Labor’s Employee Benefit Security Administration (EBSA) issued Technical Release 2013-04. With this release, the EBSA has joined the IRS in stating that, for purposes of federal tax and federal employee benefit requirements:

• The “place of celebration” rule will apply. This means that if the employee was legally married in any state or country, for federal tax and federal benefits purposes only the person will be considered legally married even if the employee is currently living, or the employer is located, in a state that does not recognize same-sex marriages. (These notices do not mean that a health plan must now cover a same-sex spouse.)

• The agencies only recognize actual marriages of same-sex spouses. This means that an employee who is in a civil union or domestic partnership is not covered by these new rules.

• If the employer’s state recognizes same-sex marriage

• If the plan is fully insured – probably (check state insurance law and the policy’s definition of “spouse”)
• If the plan is self-funded – maybe (check the plan’s definition of “spouse;” be aware that opinions differ on whether ERISA will preempt state law)

• If the employer’s state does not recognize same-sex marriage

• If the plan is fully insured – unlikely (check the policy’s definition of “spouse”)
• If the plan is self-funded – unlikely (check the plan’s definition of “spouse”)

• If the employer’s state recognizes same-sex marriage

• If the plan is fully insured – probably (check the policy’s definition of “spouse” or with the insurance carrier)
• If the plan is self-funded – yes (check the plan’s definition of “spouse;” verify with stop loss carrier)

• If the employer’s state does not recognize same-sex marriage

• If the plan is fully insured – probably not (check with the insurance carrier)
• If the plan is self-funded – yes (check the plan’s definition of “spouse;” verify with stop loss carrier)

• If the employer’s state recognizes civil unions or domestic partnerships

• If the plan is fully insured – probably (check the policy’s definition of “spouse”) *
• If the plan is self-funded – maybe (check the plan’s definition of “spouse;” be aware that opinions differ on whether ERISA will preempt state law) *

• If the employer’s state does not recognize civil unions or domestic partnerships

• If the plan is fully insured – probably not (check the policy’s definition of “spouse”) *
• If the plan is self-funded – no (check the plan’s definition of “spouse”)

• If the employer’s state recognizes civil union partners or state-registered domestic partners

• If the plan is fully insured – probably (check the policy’s definition of “spouse” or with the insurance carrier) *
• If the plan is self-funded – yes (check the plan’s definition of “spouse” and “dependent;” verify with stop loss carrier) *

• If the employer’s state does not recognize civil union partners or state-registered domestic partners same-sex marriage

• If the plan is fully insured – probably not (check the policy) *
• If the plan is self-funded – yes (check the plan’s definition of “spouse” and “dependent;” verify with stop-loss carrier) *

• If the plan is fully insured – maybe (check the policy’s definition of “spouse” and “dependent” or check with the insurance carrier) *
• If the plan is self-funded – yes (check the plan’s definition of “spouse” and “dependent;” verify with stop loss carrier) *

* Important: Although federal taxes (FICA and income) no longer apply to premiums paid for same-sex spouses, premiums to cover civil union and domestic partners are still taxable.