Last September, three months after the U.S. Supreme Court issued its landmark decision in United States v. Windsor, the IRS issued some much-anticipated guidance regarding the treatment of same-sex spouses. For employers who sponsor qualified retirement plans (e.g., a 401(k) plan), one of the most significant ramifications was the requirement that such plans recognize a valid same-sex marriage from another jurisdiction, even if the married couple lives in a state (like Oklahoma) that does not recognize same-sex marriage. In addition, terms like “spouse,” “husband” and “wife” were to be redefined to include individuals married to a person of the same sex.
While the initial guidance was effective September 16, 2013, it did not establish a deadline for employers to amend their retirement plan documents, if necessary, to comply with the new rules. That is, until now.
On April 4th, the IRS issued further guidance setting a deadline of December 31, 2014, for many employers to amend their plan documents. It is important to keep in mind that even though employers still have time to adopt an amendment, the operations of an Oklahoma employer’s retirement plan must as of September 16, 2013 (i.e., right now), recognize valid same-sex marriages from another state for federal tax purposes.
Other government agencies have followed the IRS’s lead in issuing guidance in the new post-DOMA world. Last month, the Department of Health and Human Services Centers for Medicare & Medicaid Services (CMS) issued guidance stating that a health insurance issuer that offers non-grandfathered group or individual health insurance coverage must offer the plan sponsor, or individual in the individual market, the option to cover same-sex spouses on the same terms and conditions as opposite-sex spouses. It’s important to note that CMS guidance does not require private-sector employers to offer health coverage to same-sex spouse. The guidance merely clarifies that insurance companies offering non-grandfathered health insurance coverage must offer private employers and individuals the option to cover same-sex spouses. Employers sponsoring a self-funded health plan are not affected by this new CMS guidance.