What the DOMA and Prop. 8 Decisions Mean for Employers - Last Week’s Decisions Will Impact Employer-Provided Benefits

by Best Best & Krieger LLP
Contact

The U.S. Supreme Court ruled last week that the Defense of Marriage Act’s (DOMA) definition of marriage is unconstitutional. The Court's decision and the decisions allowing same-sex marriage to resume in California will have a significant impact on the benefits provided by employers to the same-sex spouses of employees.

For purposes of over 1,000 federal laws, DOMA defined the term “marriage” as “only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or wife.”  The nation’s highest court, however, determined that the definition of marriage in the 1996 federal law violated the Fifth Amendment of the U.S. Constitution. Justice Kennedy, writing for the majority, asserted that “DOMA writes inequality into the entire United States Code. . . .  DOMA’s principal effect is to identify a subset of state-sanctioned marriages and make them unequal.” The Court’s decision, however, only applies to “lawful” marriages.

The same day that the Court released its decision regarding the constitutionality of DOMA’s definition of marriage, the justices also dismissed the case filed in the dispute over California’s controversial Prop. 8. Two days later, the Ninth Circuit Court of Appeals lifted the stay in the Prop. 8 case, allowing same-sex marriages to resume in California. 

As a result of these decisions, same-sex partners may now marry in California, and must be treated as spouses for purposes of federal law. This means that same-sex spouses will be able to file joint federal income tax returns, and will be on equal footing for purposes of federal estate and gift taxes. Further, employers will be required to treat same-sex spouses in the same way that they treat spouses of the opposite sex for purposes of employee benefits. For example, an employee’s spouse must be named as his or her beneficiary under a qualified retirement plan unless the spouse provides a waiver. The tax treatment of health benefits is also affected by these decisions. Now, an employee will not be required to pay tax on employer and employee contributions to a health plan providing coverage for his or her same-sex spouse.

At this point it is unknown whether the decisions will impact how employers report health benefits provided to same-sex, non-dependent registered domestic partners. Until further guidance is received, the fair market value of coverage provided to an employee’s non-dependent registered domestic partner should continue to be considered taxable wages.

Written by:

Best Best & Krieger LLP
Contact
more
less

Best Best & Krieger LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!