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Davis Brown Employment and Labor Law Blog

Employment Law Blog: What does the DOMA ruling mean for employers? - June 26, 2013

Today the United States Supreme Court ruled, in United States v. Windsor, that the federal Defense of Marriage Act (DOMA) that prohibited the federal government from recognizing same-sex couples who are legally married in their state violates the equal protection clause of the United States Constitution.  The decision of the Court does not include protection for individuals who are registered domestic partner or you live in a state that recognizes civil unions. Also, the Court decision does not impact states that have a Defense of Marriage Act or a constitutional amendment banning same-sex marriage.

The Court’s decision will have immediate impact for employers in Iowa in the following areas:

Family and Medical Leave Act.  Due to the decision in Varnum v. Brien, same sex marriage is legal in Iowa.  The Windsor case now allows the federal government to also recognize an Iowa same-sex marriage.  Therefore, same sex married couples living in Iowa are concerned spouses for purposes of the Family and Medical Leave Act.  And, because Iowa law recognizes marriages from other jurisdictions, a same sex married couple who were legally married in another state, are also considered married in the state of Iowa.

Employer-sponsored insurance plans. Because the federal DOMA prohibited the federal government from recognizing same sex marriages that were legal in some states, employees who covered their spouse on a company sponsored insurance plan paid tax on the premium. With today’s ruling, the value of a spouse’s health insurance coverage should not be treated as taxable to the employee or the spouse. 

Likewise, the spouse and children of a employee will not have the right to remain on the employer’s health plan if the employee’s loses the job, becomes divorced or separated. Marriage and divorce are considered qualifying events for purposes of enroll and un-enroll that falls outside of a specific time period.

Retirement and Pension plans. A validly married couple is considered by the federal government to be eligible for a pension or other employer-sponsored retirement plan. This means that the surviving same-sex spouse would be entitled to receive the deceased employee’s pension benefits.  If the employee dies before reaching retirement age, the spouse is entitled to a pre-retirement survivor annuity.  The spouse of the employee must give written consent before the employee can name anyone else as a beneficiary to the retirement plan.

Being married also allows the spouse of the employee greater options in taking distributions from the retirement plan. And, a retirement plan may be subject to a qualified domestic relations order in the case of divorce.