DOMA is Doomed as Windsor Expands Federal Employment Benefits and Protections to Married Same-Sex Couples
In a 5-4 decision, the United States Supreme Court struck down Section 3 of the Federal Defense of Marriage Act (“DOMA”) in its landmark decision, United States v. Windsor, 570 U.S. __ (2013). DOMA excluded same-sex couples from the definitions of “marriage” and “spouse,” and barred Windsor, a New York widower, from claiming the federal estate tax exemption for surviving spouses after her wife died, thus costing her over $360,000 in estate taxes1. The opinion, delivered by Justice Anthony Kennedy, held that DOMA was unconstitutional as a deprivation of the equal liberty of persons protected by the Fifth Amendment and a violation of basic due process and equal protection principles applicable to the Federal Government. In short, the Court’s ruling renders it unconstitutional for the Federal Government to exclude same-sex couples from the definitions of “marriage” and “spouse,” and leaves the realm of legislating domestic relations to the sovereign authority of the States. Twelve States2, including New York and the District of Columbia, have acted to include same-sex couples in the definition of marriage.
The impact of yesterday’s ruling on employment benefits and policies is widespread – DOMA’s definitions of “marriage” and “spouse” control over 1,000 federal statutes and the entire realm of federal regulations. The Court explained that DOMA essentially obstructed a State’s ability to provide equal protections and benefits to same-sex married residents. The Court specifically noted that among the statutes and regulations that DOMA controlled were laws pertaining to Social Security, housing, taxes, criminal sanctions, copyright, and veterans’ benefits. As a result of this decision, in the employment context, Federal benefits and protections currently afforded to opposite-sex married couples will now be extended to same-sex married couples. For example, employers with pensions and 401(k) plans will be required to recognize same-sex spouses for purposes of determining surviving spousal annuities and/or benefits. Employers also will be required to permit employees to take family and medical leave to care for the illness of a same-sex spouse. Additionally, federal income tax treatment of health coverage for an employee’s same-sex spouse will change so that employees will no longer be taxed on the income imputed for the employer’s contribution to the same-sex spouse’s coverage, and COBRA continuation must be offered to same-sex spouses as well.
As a result of the Windsor decision, employers and health plan administrators should review their employee benefit plans to ensure that Federal benefits and protections are afforded to same-sex and opposite-sex couples in accordance with applicable State laws.
1 Windsor and her wife were married in Canada in 2007, and the State of New York deemed their marriage to be valid.
2These States are Massachusetts, Connecticut, Iowa, Vermont, New Hampshire, Washington, Maine, Maryland, Delaware, Minnesota, Rhode Island, and New York.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.