Benefits

Benefit Changes Ahead After DOMA Ruling

By Rebecca Moore editors@plansponsor.com | June 26, 2013
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June 26, 2013 (PLANSPONSOR.com) – A ruling by the U.S. Supreme Court on the federal Defense of Marriage Act (DOMA) will require changes to the way employers administer health care and retirement benefits.

The case was brought by New York resident Edie Windsor, who was married in Canada in 2007 to her partner, Thea Spyer, who died two years later. Following Spyer’s death, the federal government, under DOMA, denied Windsor the estate tax exemption available to surviving spouses. Windsor filed a lawsuit challenging the constitutionality of DOMA and seeking a refund of the estate taxes she was forced to pay as a result of the federal government’s refusal to recognize her marriage.   

“The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and injure those whom the State, by its marriage laws, sought to protect in personhood and dignity,” Justice Anthony Kennedy wrote for the majority in the court’s 5-4 decision. “By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment.”  

In a separate 5-4 opinion, the Supreme Court found that proponents of California’s Proposition 8 lacked the legal standing necessary to challenge the rights of gays and lesbians to marry. The decision lets stand a district court ruling that found Proposition 8 unconstitutional. “Because we find that petitioners do not have standing, we have no authority to decide this case on the merits, and neither did the Ninth Circuit,” the opinion says.  “We have never before upheld the standing of a private party to defend the constitutionality of a state statute when state officials have chosen not to. We decline to do so for the first time here.”  

In a statement, ERISA Industry Committee (ERIC) President Scott Macey said: “Today’s rulings by the U.S. Supreme Court could have a significant impact on the way employee benefit plans are administered.  Companies will need to carefully evaluate their plans in light of these decisions.”  

Macey continued: “Today’s decisions mean that valid same-sex marriages in a state that recognizes them must be recognized by the federal government.  That recognition would include tax and ERISA [Employee Retirement Income Security Act] benefit matters, including presumably the recognition of tax-exempt spousal coverage under a health plan and the right to a qualified joint and survivor annuity under a pension plan.