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On June 26, 2013, the U.S. Supreme Court ruled, in United States v. Windsor, that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional.


DOMA was signed into law in 1996.  Section 2 allows states not to recognize same-sex marriages performed in other states or countries. Section 3 provides that, for purposes of all federal laws, “marriage” means only marriage between a man and a woman, and a “spouse” can only be a person of the opposite sex.

The Windsor decision overturned Section 3 but left Section 2 intact.  As a result, states may still refuse, for purposes of that state’s law, to recognize same-sex marriages performed in other jurisdictions.  However, federal law must now recognize same-sex marriages.

Impact on Employee Benefit Plans

Benefit plans are subject to various Code and ERISA requirements when a participant is married.  Retirement plans must comply with numerous rules that are intended to protect a spouse’s right to share in retirement income.  Due to Windsor, retirement plans must now extend these protections to same-sex spouses.  For example:

  • plans subject to the Code’s qualified joint and survivor annuity (QJSA) requirements must pay retirement benefits in the form of a QJSA to participants in a same-sex marriage unless the same-sex spouse consents to a different form of payment.
  • any survivor benefits must now be paid to the participant’s same-sex spouse unless the spouse consents to a different beneficiary;
  • same-sex spouses may make direct rollovers to the spouse’s own IRA or employer plan, and they also qualify for the more favorable required minimum distribution (RMD) rules afforded to spouses; and
  • same-sex spouses may obtain qualified domestic relations orders (QDROs), consistent with state law.

Windsor’s impact on health plans varies depending on plan design.  Unlike retirement plans, the law does not require that health plans provide any spousal coverage.1  Windsor therefore does not require that health plans cover same-sex spouses.2  However, ERISA and the Code include rules applicable when a plan does provide spousal coverage, and after Windsor those rules also apply to any coverage for same-sex spouses.  For example:

  • any health coverage for same-sex spouses is now tax-free to the employee (previously, employers had to impute the value of a same-sex spouse’s coverage into the employee’s income, while coverage for opposite-sex spouses was provided tax-free);
  • likewise, no employment taxes (FICA and FUTA) are assessed on the value of coverage provided to same-sex spouses;
  • eligible same-sex spouses must receive HIPAA special enrollment rights and be offered COBRA, to the same extent as opposite-sex spouses; and
  • HRAs, HSAs and FSAs can be used to pay a same-sex spouse’s health expenses on a tax-free basis, and DCAP pre-tax dollars can be used to pay for the care of a disabled same-sex spouse.

Moreover, the children of a same-sex spouse now qualify as an employee’s step-children, which has a similar impact under the aforementioned rules.

Guidance Issued To-Date

The IRS and DOL have addressed what happens if a legally married same-sex couple resides in a state that does not recognize their marriage:  the couple will still be treated as married under ERISA and the Code, no matter their state of residence.3  For example, a couple married in Canada (which recognizes same-sex marriage) is married for purposes of ERISA and the Code even if they live in Utah (which does not recognize same-sex marriage).4  The IRS’ ruling is effective September 16, 2013, on a prospective basis only,and the DOL’s ruling did not include an effective date.  The IRS has also issued a special procedure for claiming refunds or adjustments of overpaid employment taxes with respect to health benefits previously provided to same-sex spouses.5  In addition, the IRS has issued guidance for cafeteria plans – for example, advising that cafeteria plans may treat a participant with a same-sex spouse as of June 26, 2013 (the date Windsor was issued) as having a change in status event as of the date.6

There are still many open issues – perhaps the most significant is the extent to which Windsor will have retroactive effect.  The agencies have promised further guidance.

Action Items

Pending further guidance, employers can take the following steps now, with respect to their ERISA plans:

  • Obtain information about marital status. Sponsors that will provide or have been providing health coverage to same-sex spouses (for example, employers whose plans cover domestic partners) should invite employees to submit information about their marital status.
  • Modify tax treatment. Effective September 16, 2013, sponsors should no longer include the value of health coverage for a same-sex spouse in the employee’s taxable income for federal tax purposes, or assess employment taxes on the value of the coverage. (Remember that the coverage may still be subject to state income tax.)  Also, employers may consider tax refunds / adjustments with respect to previously taxed benefits.
  • Review plan documents, policies and procedures.  Most plans specifically define terms like “spouse,” “marriage,” “domestic partner” or “stepchild.” Due to Windsor, these definitions may no longer be consistent with plan administration or the law.  (For example, if a plan defines “spouse” as someone who is married for purposes of federal tax law, a same-sex spouse would now qualify under that definition.  For some health plans, this may not match current administration.)
  • Monitor administration. Plan sponsors should take steps to ensure that, pending further guidance, plans are administered consistent with Windsor and agency guidance issued to-date.  For example, defined contributions plans should ensure that they do not pay a deceased participant’s account balance to a non-spouse beneficiary unless the beneficiary was designated with the same-sex spouse’s consent.  Health plans should carefully review any requests for enrollment of a same-sex spouse (or the spouse’s children).

Windsor created a host of issues for employers and plans.  As this area of law is rapidly evolving, employers should continue to monitor agency guidance.

Not Intended As Legal Advice.


  1. Insured plans are subject to state insurance law, and so may be required to cover same-sex spouses under state law.
  2. Plaintiffs’ attorneys have been discussing bringing Title VII sex discrimination cases against plan sponsors that offer coverage to opposite-sex spouses but not to same-sex spouses.
  3. The IRS ruling (Revenue Ruling 2013-17) is available at Rev. Rul. 2013-17, and DOL ruling (Technical Release 2013-04) is available at Tech. Rel. 2013-04.
  4. Note that the DOL has taken a different approach with respect to the Family Medical Leave Act (FMLA), stating that a same-sex couple is married for FMLA purposes only if the couple lives in a state that recognizes the marriage. See Fact Sheet 28F. This follows current FMLA regulations, which provide that “spouse” status is determined by the laws of the employee’s state of residence.  It’s possible that the DOL may revise the regulations for consistency with its position under ERISA (that is, that a same-sex marriage is valid for ERISA purposes even if the couple lives in a state that doesn’t recognize the marriage).
  5. See Notice 2013-61, available at:  Notice 2013-61.
  6. See Notice 2014-1, available at:  Notice 2014-1.   The Notice includes additional guidance for cafeteria plans – for example, amendment relief for plans that do not currently provide that a “change in status” includes a change in legal marital status, but wish to permit mid-year changes based on Windsor. The Notice also permits reimbursement from flexible spending accounts (FSAs) of expenses incurred by a same-sex spouse or the spouse’s dependents on or after the later of (i) the date of marriage, or (ii) the beginning of the plan year that includes July 26, 2013 (the date of the Windsor decision), regardless of whether the employee had elected spousal coverage for that period.  For example, under a calendar-year FSA, a participant who elected employee-only coverage for 2013 can receive reimbursement of expenses incurred by his/her same-sex spouse on and after January 1, 2013 (or, if later, the date of marriage).