Employee Benefits After Obergefell

by Locke Lord LLP

In a historic decision, the United States Supreme Court in Obergefell v. Hodges recently held that the Fourteenth Amendment of the United States Constitution requires all jurisdictions in all fifty states to:  (1) license a marriage between two people of the same sex; and (2) recognize marriage between two people of the same sex when their marriage was lawfully licensed and performed out of state. The Supreme Court’s decision in Obergefell requires employers to address benefits, tax and other employment issues for employees in same-sex marriages who work or reside in a state that did not previously recognize the employee’s same-sex spouse.  Action may be necessary, including amending plan terms and procedures and payroll and income tax processes.  Notably, Obergefell does not apply to domestic partnerships or civil unions.      

Next Steps Post-Obergefell
Some key considerations relating to employee benefits are summarized below.

401(k) And Other Qualified Retirement Plans
In 2013, the Supreme Court, in United States v. Windsor, ruled that federal law would recognize same-sex marriages.  The Windsor holding, and subsequent guidance issued by the IRS (particularly that which required same-sex marriage recognition for all federal tax purposes, including income taxes, estate and gift taxes, and qualified plan purposes, regardless of whether the same-sex couple lived in a state that recognized same-sex marriages), means that 401(k) and other qualified retirement plans are generally not impacted by Obergefell.  Nonetheless, employers may need to ensure that their plans comply with Obergefell and applicable rules, including those regarding plan funding, minimum required distributions, eligible rollover distributions, qualified domestic relations orders (QDROs), beneficiary designations, qualified joint and survivor annuities (QJSAs), qualified pre-retirement survivor annuities (QPSAs), hardship withdrawals, and plan loans.   

Health And Welfare Plan
After Obergefell, employers with fully insured health and welfare plans will now be required to offer coverage to same-sex spouses that is equivalent to the coverages offered to opposite-sex spouses.  Although employers with self-insured plans are not required to provide coverage to same-sex spouses, employers may face a risk of discrimination and other lawsuits if they fail to provide coverage to same-sex spouses.  Though the most common requests for benefits for same-sex spouses may likely be in relation to medical, dental and vision plans, employers may also have to adjust their plans and processes in relation to other matters, including COBRA, HIPAA, cafeteria plans, flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs).  Additionally, special enrollment, coverage and qualifying events rules may need to be adjusted to account for same-sex spouses as well.    

Public Sector Plans
Government and public sector employers are required to provide certain spousal benefits.  Obergefell appears to require that these employers provide same-sex spouses with the same spousal rights as those given to opposite-sex spouses.  

Domestic Partnerships And Civil Unions
Since domestic partnerships, civil unions and other relationships are not treated as “marriage,” they are not generally required to be recognized.  As such, employers may need to re-evaluate the continuation of these benefits.  Employers should consider the cost of administration, tax gross-ups, transition issues (freeze, phase out or termination), and compliance with state and municipal laws.  For example, laws or ordinances in California, San Francisco, Los Angeles, Seattle, Miami Beach, and Broward County (Florida) provide that the municipality or state will not do business with an employer unless it offers same-sex and opposite-sex domestic partners with the same benefits as opposite-sex spouses.  

State Income Taxes
State income tax laws will now be required to recognize the marital status of same-sex spouses, particularly for plan benefits and distributions.  Employers should review their payroll procedures with respect to taxation to ensure proper federal and state taxation in relation to same-sex spouses for all benefits offered.

Other Considerations
Other spousal benefits may need to extend to employees’ same-sex spouses, including group rates for insurance plans, such as supplemental life insurance, long-term care insurance, home insurance and automobile insurance, as well as other fringe benefits, such as bereavement and other types of leave, moving or relocation expenses, tuition reimbursement, employee discounts, employee assistance programs, retirement planning services, and on-site facilities.  

In sum, employers should review their benefit plans to confirm their compliance with Obergefell’s ruling that same-sex marriages must be recognized in every state. Employers may need to update their plan documents and procedures to verify equal treatment of opposite- and same-sex marital status.  Employers should work with third-parties, including insurers or vendors, to determine whether any changes are required for compliance, and must communicate any changes, and the timing thereof, to plan participants.  Employers should also be aware of state or local law, including equal benefits ordinances and discrimination laws, when making benefits decisions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Locke Lord LLP | Attorney Advertising

Written by:

Locke Lord LLP

Locke Lord 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.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

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.


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.