On Wednesday the US Supreme Court ruled that the federal Defense of Marriage Act (DOMA) is unconstitutional. We believe that this ruling will require employers to review and possibly amend many of their retirement and welfare benefit plans, as well as summary plan descriptions, tax statements, beneficiary designation forms, and other employment practices with a focus on the rights of same-sex couples who are legally married under state or foreign law whose marriages are now recognized for purposes of various federal laws, including the Internal Revenue Code and other laws governing employee benefits.
The Supreme Court ruling left many questions unanswered with respect to its application. Among them are questions about the rights of same-sex spouses to reimbursement under self-insured health insurance programs with respect to claims previously incurred, and the rights of same-sex spouses of deceased retirement plan participants who did not receive death benefits payable under the plan and did not consent to the payment of such benefits to third parties.
We expect regulations and/or other guidance clarifying these and other questions relating to the application of the Supreme Court decision, and will issue additional alerts as this guidance becomes available. In the meantime, we recommend:
1. taking great care when paying death distributions from qualified plans to beneficiaries other than a plan participant’s spouse without having a spousal consent on file to ensure that the deceased participant was not legally married to a same-sex spouse
2. carefully reviewing all tax statements issued in connection with employees’ rights under one or more benefit plans
3. immediately contacting your insurance provider for insured health plans, and your third party administrator for self-insured health plans, to develop a strategy relating to coverage and payment of benefits to same-sex spouses and
4. immediately reviewing all plans and policies to determine how the Supreme Court ruling may affect administration and the cost of all welfare and retirement plans, fringe benefit arrangements and payroll and employment practices.
We understand that this is an uncertain time with respect to the treatment of same-sex spouses under benefit programs and payroll and employment practices. Please call us with your questions.