The brief highlights the disparate tax treatment the federal Defense of Marriage Act imposes on workers covered by employer-sponsored health and retirement plans, as well as the financial, administrative and other burdens the law places on employers providing those benefits.
“We want the Supreme Court to understand the unequal tax treatment that DOMA applies to employees who are legally married in states recognizing same-sex marriages and the burdens it imposes on employer sponsors of health and retirement benefits,” said Council President James A. Klein.
The brief’s argument centers on how DOMA “requires that employers treat one employee differently from another, when each is married, and each marriage is equally lawful.” This disparate treatment creates challenges for both employees and companies sponsoring benefit plans, including such difficulties as:
- Federal income tax imposed (and the corresponding withholding required) on the value of health benefits for spousal coverage, applicable only to coverage of same-sex spouses (pages 15-16 of the brief);
- Differing eligibility for participation in and utilization of pre-tax “cafeteria” plans (16-17);
- Differing eligibility for preretirement hardship distributions from retirement plans (20-21);
- Disqualification of same-sex spouses from the estate tax marital deduction on proceeds from employer-sponsored life insurance (21-22);
- Differing eligibility for receiving spousal pension benefits in the form of a qualified joint and survivor annuity (22-23);
- Administration of dual systems of benefits and payroll—related to federal tax withholding, payroll taxes and workplace benefits that turn on marital status—imposing additional costs and tax burdens on employers (25-26); and
- Requiring employers to determine how DOMA corresponds with state nondiscrimination laws (31-32).
“Companies that offer benefits to their employees’ same-sex spouses do not want those families to face unequal treatment under the law. And employers want to commit their resources to core business goals and the work force that makes achieving those goals possible. For many employers and workers, DOMA is an unnecessary and troublesome obstacle,” Klein said. The brief is here.