The Internal Revenue Service has published a new notice that addresses specific questions on how the U.S. Supreme Court’s decision in U.S. v. Windsor, recognizing same-sex marriage, affects elections and contributions under certain employee welfare benefit plans. This notice follows up on the guidance that the IRS issued this summer on the Windsor decision. The new notice focuses on particular issues affecting cafeteria plans, flexible spending arrangements (FSAs), and health savings accounts (HSAs). Highlights include:

• A cafeteria plan may allow an employee to make a mid-year election as a result of the Windsor case during the plan year in which the Supreme Court’s decision was rendered (on June 26, 2013) or the new notice was published (December 16, 2013).
• If an employee has been contributing toward his or her own coverage on a pre-tax basis, but toward a same-sex spouse’s benefits on an after-tax basis, the employer has a reasonable period to begin treating the contributions for the coverage of a same-sex spouse as pre-tax. This seems to allow a calendar year cafeteria plan to make an orderly transition to pre-tax contributions as of the first day of the 2014 year.
• FSAs may reimburse the covered expenses of a same-sex spouse beginning as of the date of the marriage, but no earlier than the first day of the plan year in which the Windsor decision was rendered (June 26, 2013).
• The maximum annual contribution limits for married couples under HSAs and dependent care FSAs will apply to employees with same-sex spouses in 2013. The notice offers guidance on correcting excess contributions.

Employers must still consider issues that arise under state tax laws, particularly in those states that do not recognize same-sex marriage.

The notice offers practical guidance on discrete federal income tax questions and on the timing of amendments that employers may choose to make in response to the guidance (generally not required until December 31, 2014, for calendar year plans). Employers are reminded that there may be other changes to cafeteria plans, for reasons unrelated to same-sex spouses, that should be made this year.