Following the Supreme Court’s holding that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional, employers should review their retirement and health and welfare benefit plans to identify all provisions applicable to spouses of employees.
Employers should prepare to modify plan design, communications, day-to-day operation and administration to comply with the decision and any additional guidance published by applicable regulatory agencies. Under Section 3 of DOMA, same-sex marriages were not recognized for federal purposes even if recognized under state law. The Supreme Court’s decision leaves the definition of marriage to the states, and leaves intact Section 2 of DOMA which allows states to refuse to recognize same-sex marriages performed in another state. The Supreme Court noted that the law’s definition of marriage or spousal status affects over 1,000 federal laws and regulations; and these include those governing retirement and health and welfare benefits. Unfortunately, the decision does not give employers and plan sponsors a uniform approach to same-sex married couples – instead it will still require a state-by-state evaluation of marital status. And the decision leaves many unanswered questions, including what happens when an employee with a same-sex spouse moves from a state that recognizes same-sex marriages to a state that does not, as well as its retroactive impact. We will have to wait for guidance from the regulators to answer these questions. This Insight highlights some of the implications for employer-sponsored plans.