Tag Archives: Same Sex Marriage

Obergefell’s Impact on Employers

August 17, 2015


Last month, in a case called Obergefell v. Hodges, the Supreme Court held that state law bans on same-sex marriage are unconstitutional. That ruling effectively made same-sex marriage legal nation-wide. So what does that mean for employers?

First, it’s important to understand the scope of the Court’s ruling. It only addressed the right to marry, not the right to equal treatment generally. There is no federal law expressly forbidding private employers from sexual orientation discrimination. However, the Equal Employment Opportunity Commission (EEOC) has recently interpreted Title VII’s prohibition on gender discrimination as encompassing sexual orientation discrimination. On July 15, 2015, the EEOC issued a 17 page opinion concluding that “sexual orientation is inherently a ‘sex-based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.” The EEOC’s ruling doesn’t expressly re-write Title VII, but it should not be taken lightly. There is a religious organization exemption to Title VII, in that organizations whose “purpose and character are primarily religious” are able to impose religious-based requirements without running afoul of Title VII. The application and scope of that exemption, however, is nuanced and employers should consult legal counsel before relying on it.

Additionally, state and municipal laws may apply. Currently, 22 states prohibit private employers from discriminating based on sexual orientation. Another 10 only prohibit public employers from doing so.

The most immediate question employers want to know is: do we have to cover same-sex spouses on our benefit plans? The answer depends on a number of factors, including what your plan document says and what your current practice is (which are hopefully the same).

  •  If your plan does not cover spouses (you are not required to do so under the ACA), Obergefell does not force you to extend coverage to same-sex spouses or any spouse, for that matter. This is the least-debatable position.


  • If your plan covers “spouses,” then yes, you should cover all spouses, regardless of their gender. After Obergefell, a spouse is a spouse. There is no distinction for the sexual orientation or gender of the spouse. Employers with these plans should extend benefits to same-sex spouses because there is no reasonable basis for excluding them.


  • If your plan covers “spouse” but defines a spouse as “an opposite-sex spouse,” the issue is a little more complex. The first issue is sexual orientation discrimination, but as noted above, that is only an issue in 32 states. Even if your plan covers participants in the other 18 states, however, discrimination could still be an issue by virtue of the EEOC interpretation. That interpretation is not “law,” per se, and it does conflict with the opinions of more than a few federal courts. However, it is an indication of how the EEOC will investigate and enforce Title VII claims. Additionally, the push for LGBT rights has been considerable in recent years, and has gained momentum after Obergefell. Accordingly, employers with plans defining a spouse as an “opposite sex spouse” should be prepared to defend that interpretation in either an EEOC enforcement action or a lawsuit or both.
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Supreme Court Protects Same-Sex Marriage

June 26, 2015


For the times they are a-changin’ – Bob Dylan (The Times They Are A-Changin)

In Obergefell v. Hodges, the Supreme Court held in a 5-4 decision that state law bans on same-sex marriage violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The Court issued passionate and lengthy majority and dissenting opinions.

Justice Kennedy, writing for the majority, recalled that “the Court has long held the right to marry is protected by the Constitution.”  That protection stems from the Fourteenth Amendment’s protection of “life, liberty, or property.” Marriage has been recognized by the Court as a fundamental right and liberty interest.  Kennedy articulated four reasons why the right to marry was safeguarded by the Constitution:

  • “marriage is inherent in the concept of individual autonomy,”;
  • “the right to marry is fundamental because it supports a two-person union unlike any other in its importance to the committed individuals.”;
  • the right to marry “safeguards children and families and thus draws meaning from related rights of childrearing, procreation, and education.”; and
  • “this Court’s cases and the Nation’s traditions make clear that marriage is a keystone of our social order.”

Those four principles have placed the institution of marriage “at the center of so many facets of the legal and social order.  There is no difference between same- and opposite-sex couples with respect to this principle.”

Justice Kennedy also dismissed the notion that the Court was re-defining marriage in a radically new way.  “If rights were defined by who exercised them, then received practices could serve as their own continued justification and new groups could not invoke rights once denied.”  For example, Kennedy explained, “Loving [v. Virginia]did not ask about a ‘right to interracial marriage’; Turner [v. Safley]did not ask about a ‘right of inmates to marry’; and Zablocki [v. Redhail]did not ask about a ‘right of fathers with unpaid child support duties to marry.’”

Ultimately, the majority found that “[t]hese considerations lead to the conclusion that the right to marry is a fundamental right inherent in the liberty of the person, and under the Due Process and Equal Protection Clauses of the Fourteenth Amendment couples of the same-sex may not be deprived of that right and that liberty.”

Chief Justice Roberts, Justice Scalia, Justice Thomas and Justice Alito each filed dissenting opinions.

What does this mean for employers?  In some ways, managing employee benefits just got easier. Concepts like domestic partnerships – which was often employed to provide benefits to same-sex employees in states where same-sex marriage was illegal – are no longer needed.  Benefits can now be offered only to “spouses,” since every person has the ability to marry a spouse.  There will likely be state-law reconciliations in areas like income tax and estate planning, but at the end of the day, a spouse is a spouse, regardless of gender.

We will keep up with further developments and legislative or administrative responses.  And we will update TerrillConnect users accordingly.

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Final FMLA Spousal Definition

April 6, 2015


Did you know that something as simple as a change of a definition could affect the way employers handle their leave practices?  

The new definition of a “spouse” has done just that for purposes of FMLA leave.

As you may know, last year in United States v. Windsor, the Supreme Court determined that section 3 of the Defense of Marriage Act (DOMA) was unconstitutional.  In short, this means that valid same-sex marriages will now be recognized as “spouses” for the purposes of federal laws.

In response to that decision, on February 25, 2015, the Department of Labor issued a Final Rule revising the FMLA definition of “spouse” to include an employee in a legal same-sex marriage.  The premise is to ensure that FMLA will now be applied to all families equally.  This will now allow spouses in a same-sex marriage the same ability as all spouses to exercise their rights and responsibilities to their family.

This actually sounds quite simple; however (no surprise here), there are a few details to consider. 

A key detail is that the term “spouse” used to mean a husband or a wife as recognized under state law where the employee resides. The Final Rule changes that definition, now recognizing the state law of the place of celebration (where the marriage was entered into) for determining the definition of spouse.

For example, if an employee enters into a same-sex marriage in New York but now resides in Missouri, the employee will have FMLA rights to care for his or her spouse since New York recognizes same-sex marriage. (Missouri does not.)

Please note, there are four states currently under a preliminary injunction and are therefore on hold with the new definition: Texas, Arkansas, Louisiana and Nebraska .  Employers in those states may continue to follow the old FMLA rule and determine a “spouse” based on the state law of residence.

Employers should be mindful that FMLA does not protect civil unions or domestic partners; only married “spouses” are included.  However, some states offer more generous coverage and broader definitions of family members under state family leave laws that often run concurrently with FMLA leave. Therefore employers should determine whether any state law may protect civil unions or domestic partners.

What does this mean for you as an FMLA covered employer (50 or more employees within a 75 mile radius)?

We would suggest employers change their policies and practices to reflect this change.  In addition, provide training to managers and supervisors to alert them to the broader scope of the FMLA’s coverage. This will ensure managers and supervisors will not inadvertently discourage an employee from applying for FMLA or make a statement suggesting an employee is not eligible for FMLA leave related to a spouse.

For further information, please see the U.S. Department of Labors’ website, Fact Sheet: Final Rule to Amend the Definition of a Spouse in the Family and Medical Leave Act Regulations.

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Supreme Court Hearing Same-Sex Marriage Cases

February 3, 2015


The U.S. Supreme Court recently announced it will hear cases in a possibly historic ruling on whether same-sex couples can marry across the entire United States under the Constitution.

As of the publishing of this article, same-sex couples are allowed to marry in 37 states and the District of Columbia. Roughly two-thirds of these states have had the ban on same-sex marriage declared unconstitutional through judicial action vs. approving through legislative action.  Rulings are pending appeal in several other states including Missouri. Same-sex couples in the state of Missouri at the present time can only marry in St. Louis and Kansas City pending the appeal process.

The Supreme Court will hear cases relative to overturning bans in the states of Kentucky, Michigan, Ohio and Tennessee. The time normally allotted for arguments will be expanded from one hour to 2 ½ hours.

The justices will consider two questions. One question being whether or not the U.S. Constitution requires a state to issue a marriage license to a same-sex couple. The second being whether or not a state must recognize a same-sex marriage performed in another state or jurisdiction.

Arguments will be made in April with a decision expected in the latter part of June.

We will continue to monitor and report as the situation develops.

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Missouri Same-Sex Marriage Ban Unconstitutional

November 10, 2014


The first week of November has been a busy one regarding developments striking down the same-sex marriage ban in Missouri.

On November 5, St. Louis Circuit Judge Rex Burlison held, “the Court finds and declares that any same-sex couple that satisfies all the requirements for marriage under Missouri law, other than being of different sexes, is legally entitled to a marriage license.” The Court went on to hold that the Missouri same-sex marriage ban violated the Equal Protection Clause of the Fourteenth Amendment.

Judge Burlison‘s ruling came as a result of a case filed earlier this year by the State of Missouri against the Recorder of Deeds and Vital Records for the City of St. Louis. The case sought to restrain the City of St. Louis from issuing additional marriage licenses to same-sex couples following the issuing of such marriage licenses in June, 2014. Judge Burlison’s opinion is available here.

Two days later, on November 7, U.S. District Court Judge Ortrie D. Smith issued a similar ruling in Kansas City striking down Missouri’s 2004 constitutional amendment precluding same-sex couples from marrying. Judge Smith held that the state’s ban on same-sex marriage “violates the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment.” The Court explained that Missouri “would permit Jack and Jill to be married but not Jack and John. Why? Because in the latter example, the person Jack wishes to marry is male. The State’s permission to marry depends on the genders of the participants, so the restriction is a gender-based classification.” Judge Smith’s opinion is available here.

Attorney General Chris Koster is appealing both rulings.

In the interim, what do these decisions mean for the residents of Missouri? And what are the impacts relative to employee benefit plans? For the time being, it is primarily “wait and see”.

In the short term, same-sex couples are immediately able to file for marriage licenses in St. Louis City and St. Louis County. In fact, same-sex couples have already been married at the City Hall in St. Louis. Questions remain as to how the ruling will be handled by other counties in Missouri. If the decisions are upheld on appeal, same-sex spouses will have the opportunity to access employee benefits offered to legally married couples. In that circumstance, it will be important for employers to review policies and procedures related to the treatment of same-sex spouses to insure those policies are both in line with the intent of the employer and in line with federal and states laws.

In the longer term, a host of state laws will need to be reviewed and additional legislation will need to be drafted if the decisions are deemed final.

We will continue to follow this topic for additional developments and provide updates as they become available.

As of the publishing of this article, same-sex marriage is legal in 32 states and the District of Columbia.

Please reference our previous articles for additional information:




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Medicare Special Enrollment for Same-Sex Spouses

April 30, 2014


The Department of Health and Human Services (HHS) announced in early April that processing of requests for Medicare special enrollment of same-sex spouses will begin.

This action is reflective of the U.S. Supreme Court decision last year which overturned Section 3 of the Defense of Marriage Act (DOMA) thereby allowing legally married same-sex spouses access to Federal benefits.   As a result, same-sex marriage can now be used by Medicare in determining benefit eligibility.

“Today’s announcement helps to clarify the effects of the Supreme Court’s decision and to ensure that all married couples are treated equally under the law,” said HHS Secretary Kathleen Sebelius. “We are working together with SSA (Social Security Administration) to process these requests in a timely manner to ensure all beneficiaries, regardless of sexual orientation, are treated fairly under the law.”



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CMS Issues FAQ for Health Insurers on Same-Sex Spouses

April 29, 2014


In mid-March, the Center for Medicare & Medicaid Services (CMS) issued guidance to clarify earlier regulations relative to section 2702 of the Public Health Service Act (PHS Act) which requires health insurers to guarantee the availability of coverage for same-sex spouses.   This guidance was released in the form of a Frequently Asked Question as follows:

Q: If a health insurance issuer in the group or individual market offers coverage of an opposite-sex spouse, may the issuer refuse to offer coverage of a same-sex spouse?

No. Federal regulations at 45 CFR 147.104(e) provide that a health insurance issuer offering non-grandfathered group or individual health insurance coverage cannot employ marketing practices or benefit designs that discriminate on the basis of certain specified factors. One such factor is an individual’s sexual orientation. As CMS has used the terms in this regulation, an issuer is considered to employ marketing practices or benefit designs that discriminate on the basis of sexual orientation if:

    1. The issuer offers coverage of an opposite-sex spouse; and
    2. The issuer chooses not to offer, on the same terms and conditions as those offered to an opposite-sex spouse, coverage of a same-sex spouse based on a marriage that was validly entered into in a jurisdiction where the laws authorize the marriage of two individuals of the same sex, regardless of the jurisdiction in which the insurance policy is offered, sold, issued, renewed, in effect, or operated, or where the policy holder resides.

The purpose of this guidance is not to direct a group health plan to provide coverage which does not meet the terms of eligibility for coverage under the health plan.  It is strictly intended to clarify regulations which prohibit discriminatory action by an insurance provider to a plan sponsor or individual in the individual market on the basis of sexual orientation and to reinforce the policy of all individuals having access to health coverage.


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IRS Releases Post DOMA Guidance

January 13, 2014


The Internal Revenue Service (IRS) issued Notice 2014-1 on December 16, 2013 providing guidance on Section 125 and Section 223 of the Internal Revenue Code as it relates to elections and reimbursements for same-sex spouses. Section 125 covers Cafeteria Plans and Flexible Spending Arrangements (FSAs) while Section 223 covers Health Savings Accounts (HSAs).

The Notice provides long-awaited additional guidance relative to the U.S. Supreme Court’s ruling last summer which deemed Section 3 of the Defense of Marriage Act (DOMA) unconstitutional as a result of a challenge brought in the case United States v. Windsor. The overturn of Section 3 afforded same-sex spouses the opportunity to gain federal benefits that previously had not been available.

For additional background on this landmark decision please reference our earlier articles at the following links

Notice 2014-01 provides formal guidance and essentially follows an FAQ posting released by the IRS in November, 2013. It contains a wealth of valuable information which warrants complete review, but here some of the highlights:

Mid-Year Election Changes

  • A cafeteria plan may permit a mid-year election change if the participant was legally married to a same-sex spouse as of June 26, 2013 (date of the Windsor decision) in the same manner as any other participant experiencing a change in legal marital status as allowed under the plan. For purposes of the Windsor decision, an election may be accepted by the cafeteria plan if filed any time during the plan year that includes June 26, 2013 or the plan year that includes December 16, 2013 (date of Notice 2014-01). A plan participant may also make an election change if the legal same-sex marriage occurred after June 26, 2013 as allowed under the plan for any change in legal marital status.
  • An election made by a plan participant who is impacted by the Windsor decision shall take effect as of the date allowed for any other acceptable change of coverage to a qualifying benefit offered on the cafeteria plan. The plan will not be held with failing to meet the terms of an election change between June 26 and December 16, 2013 as long as the election is made effective as per the plan’s usual procedure or within a reasonable time period after December 16, 2013. This is to accommodate the period of uncertainty that surrounded the Windsor decision prior to the publishing date of Notice 2014-01.
  • Pre-tax treatment of health benefits for a same-sex spouse under a cafeteria plan should be allowed no later than the date the change in marital status is required for federal tax withholding purposes or within a reasonable period of time after December 16, 2013. A plan participant may notify their employer of the legal same-sex marriage by electing spousal coverage through salary reduction under the plan or by filing a revised Form W-4.
  • If the cost of health coverage for the same-sex spouse of a plan participant has been withheld on an after-tax basis for any portion of the cafeteria plan year, the participant can exclude the after-tax funds from federal taxable income and the employer may also request a refund of any federal employment taxes paid.

FSA Reimbursements

  • Eligible FSA expenses including health, dependent care and adoption assistance may be reimbursed for a same-sex spouse or the same-sex spouse’s dependent if incurred during the cafeteria plan year that includes June 26, 2013 or includes the date of the marriage if that occurred later. The expenses of a same-sex spouse may be treated as covered on the FSA even if the plan participant originally elected coverage for themselves only.

Contribution Limits for HSAs and Dependent Care Assistance Programs

  • A same-sex married couple is subject to the maximum deductible contribution for a family made to one or more HSAs under a high deductible health plan (HDHP) in the amount of $6,450 for tax year 2013. This amount shall be adjusted for cost of living increases for subsequent plan years.
  • If the combined HSA contributions exceed the applicable annual maximum the contribution amounts may be reduced during the remainder of the tax year to remain within the maximum allowable amount. Excess contributions made to the HSA(s) of same-sex spouses after the end of the year may be distributed from the HSAs of one or more of the spouses or they will be subject to excise tax.
  • Same-sex spouses are subject to the $5,000 exclusion limit for a dependent care FSA. Any amount contributed in excess of this limit must be included in gross income but will remain in the dependent care FSA to reimburse allowable claims (subject to forfeiture rules).

Note that a cafeteria plan that already recognizes changes in election due to legal marital status changes generally will not require an amendment of plan language to accommodate changes made to the election status of same-sex spouses resulting from the Windsor decision. If an amendment to a plan document is needed to permit such election changes then the change may be retroactive to the first day of the plan year which includes December 16, 2013.

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Missouri Allowing Joint Same-Sex Tax Returns

November 15, 2013


On November 14, 2013, Governor Jay Nixon signed an Executive Order making Missouri the first state in the Union to recognize same-sex marriages for income tax reporting purposes even though the state has a constitutional amendment barring same-sex marriage.

As reported in the Governor’s News Release, Gov. Nixon stated “Missouri is one of a number of states whose tax code is directly tied to that of the federal government and under Missouri law, legally married couples who file joint federal tax returns with the IRS must also file joint state returns with our state Department of Revenue.”

“As a result, accepting the jointly-filed state tax returns of all legally-married couples who file federal returns is the only appropriate course of action, given Missouri statutes and the ruling by the U.S. Department of the Treasury.”

The Governor affirmed his Executive Order applies only to the issue of tax filing status and does not change the constitutional amendment passed by Missouri voters in 2004 which defines marriage as only between a man and a woman.

The Executive Order does not authorize the availability of state-level tax deductions, credits and exemptions for same-sex couples which have been legally married in a jurisdiction allowing such marriage. However, any federal-level exemptions and deductions that a legally married couple can receive will be reflected in the federal adjusted gross income shown on the state tax return.

Gov. Nixon’s action is reflective of the U.S. Supreme Court’s decision this past summer which overturned Section 3 of the Defense of Marriage Act (DOMA) which denied federal benefits such as filing joint tax returns and Social Security benefits to legally married same-sex couples.

Please reference our previous articles for more information:

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Domestic Partners & Employee Benefits

November 12, 2013


Domestic Partners were first established in the early 1980s. In the United States, not all states recognize domestic partners, however many do. Levi Strauss & Company was the first Fortune 500 Company to offer Domestic Partner coverage, Today, most do, as well as many private companies, states, counties, colleges and universities offer Domestic Partner Benefits.

do∙mes∙tic part∙ner
A person who shares a residence with a sexual partner of the same or opposite sex, esp. without a legally recognized union.

Benefits for Domestic Partners can include:

  • Medical
  • Dental
  • Vision

Not only do most insurance plans offer Domestic Partner coverage to the “significant other”, but both biological and adopted children of the Domestic Partner may also be covered. Typically, there is not a cost impact to include Domestic Partner coverage in the eligibility. However, some insurance companies could include a “load” to the rates to include in the rating.

As you consider whether or not you would like to include coverage for Domestic Partners in your company’s eligibility, take into consideration you will need to have a process in place to confirm eligibility guidelines are being met. This would include: Who qualifies? How is status proven?

An employer is not required to have documentation of domestic partner eligibility, however if an employer does require documentation, they can either define their own requirements or rely on a signed affidavit confirming the qualifications, which are typically:

  • Minimum number of years living together. (Typically, this is 12 months.)
  • Financial – Intertwined Finances / Joint Bank Account, or Combined Mortgage/Lease, etc.
  • Both partners must be over the age of 18.
  • Both partners must be mentally competent.
  • Partners cannot be related by blood.
  • Partners must be in an intimate, committed relationship with each other

Employers should maintain equality when requiring documentation for proving Domestic Partner status and should also require documentation for legal spouses also. Employers should be on the alert for fraud in the documentation, especially as the Individual Mandate of the new Health Care Reform law is implemented where all Americans must have health insurance.

The employee contributions to cover a Domestic Partner (or their children) may not be taken on a pre-tax basis. In addition, the employee must pay the taxes on the cost to cover the Domestic Partner. The cost is included in the employee’s gross income and is subject to federal income tax withholding, employment taxes, and will be reported on the employee’s W-2. An employee is also not allowed to use Flexible Spending Account (FSA) or Health Savings Account (HSA) dollars, which are typically taken on a pre-tax basis, for expenses their Domestic Partner (or their children).

The Defense of Marriage Act (DOMA) passed by President Bill Clinton in 1996 allowed states to refuse to recognize same-sex marriages granted under the laws of other states. In June of 2013, Section 3 of DOMA was ruled as unconstitutional by the U.S. Supreme Court. Section 3 prevented the federal government from recognizing any marriages between gay or lesbian couples for the purpose of federal laws or programs, even if the couples are considered legally married by their home state. Section 3 was struck down because it violated the constitutions “equal protection promise.” Even though Section 3 was struck down, each state can still determine whether to legalize same-sex marriage, or if they recognize a lawful marriage from another state. Since the overturning of DOMA, some areas affected include social security benefits, military family benefits, hospital visitation rights and healthcare benefits. These are just a few of the benefits that were denied because of DOMA, but will not be available to same-sex couples in lawful marriages due to the new ruling.

An important consideration when deciding whether your company should offer Domestic Partner benefits relates to the termination of coverage for a Domestic Partner from your benefit program. Current federal law does not require an employer to provide COBRA for Domestic Partner (or their children). However, employers can elect to provide equivalent coverage to that of which a spouse and children would receive when terminating. This should be discussed with your COBRA administrator.

If interested in adding Domestic Partner coverage to your Employee Benefits package, please contact your consultant or account manager.

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Developments on the Overturn of DOMA

September 20, 2013


It has been almost three months since Section 3 of the Defense of Marriage Act (DOMA) was overturned by the United States Supreme Court. As you may recall, the challenge to DOMA came as the result of United States v. Windsor. Please reference my earlier article on Defense of Marriage Act Overturned for more details.

Since the Supreme Court decision in June, a sea of questions and uncertainty has remained. Thousands of federal regulations are still in need of review and potential revision. However, significant announcements were recently made by the Internal Revenue Service (IRS) and the United States Department of Labor that bear mentioning.

At the end of August, the Treasury department announced that same-sex spouses that have been married in jurisdictions that recognize their marriage will be considered to be married for federal tax purposes. The jurisdictions conducting the recognized marriage ceremony include any of the 50 states which allow same-sex marriage along with the District of Columbia, U.S. territories and foreign countries.

The recognition of the same-sex marriage will be made based upon the “place of celebration” regardless of where the couple is now residing. The ruling applies to income taxes and also gift and estate taxes as well. Amended federal tax returns can be filed back to tax year 2010 and forward. The Treasury Department and IRS are expected to announce additional guidance at a future date. Questions remain on how state taxation will be handled in states that do not recognize same-sex marriages in light of the federal tax decision.

In addition, the United States Department of Labor released guidance in a News Release and in Technical Release 2013-04 on September 18, 2013 interpreting the Supreme Court’s decision stating “in general, the terms “spouse” and “marriage” in Title I of ERISA and in related department regulations should be read to include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriages, regardless of where they currently live”.

While additional interpretation is still needed on the Department of Labor announcement, the release seems to indicate same-sex spouses should immediately be recognized as benefit eligible under the terms of ERISA based medical plans that include coverage for legal spouses. It is important to note ambiguity remains on the full interpretation of the guidance released this week and additional information will be made available at http://www.dol.gov/ebsain the future.

In summary, some basic decisions are beginning to take shape, but a host of unanswered questions still remain on the overturn of DOMA. We will continue to wait and monitor the situation for significant developments.

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Defense of Marriage Act Overturned

July 1, 2013


On June 26, 2013, the United States Supreme Court released their decision declaring Section 3 (Definition of Marriage) of the Defense of Marriage Act (DOMA) unconstitutional. DOMA, which has been federal law since 1996, blocked the recognition of marriage and denied benefits at the federal level for same-sex couples in states allowing same-sex marriage.

The challenge to DOMA came as result of United States v. Windsor. Edith Windsor and Thea Spyer were married in Canada in 2007 after being partners for over 40 years. Ms. Spyer died in 2009 and Ms. Windsor was forced to pay $363,053 in estate taxes which she argued would not have been owed had the couple been husband and wife. She argued the Defense of Marriage Act violates the principles of equal protection incorporated in the Fifth Amendment and prevented her from being considered Ms. Spyer spouse thus costing her $363,063.

Now that Section 3 of DOMA has been overturned, same-sex spouses have the opportunity to gain benefits that have long been afforded to heterosexual spouses. However, it is important to note the court’s decision does not make same-sex marriage the “law of the land”. Couples living in states that allow same-sex marriage will soon begin seeing these benefits. But those residing in states that do not will most likely find they are navigating a patchwork of varying state and federal agency standards.

As discussed in NPR’s article After DOMA: What’s Next For Gay Married Couples, some federal agencies use the “place of celebration” standard which means no matter where a couple has been legally married the union will be recognized in determining federal benefits. While other agencies use the “place of residence” standard which requires the marriage to be recognized in the place the couple is living in order to be eligible for spousal benefits. Agencies using the latter include the Internal Revenue Service and Social Security Administration.

One thing is certain a considerable effort will be needed before all outstanding issues of implementation are resolved. In the short term, let’s explore what can be expected in the coming days in regard to the impact on the cost of healthcare, Social Security and government revenue.


On the surface, the overturn of DOMA is likely to have little impact in contributing to the rising cost of healthcare. Recognition of domestic partners, both same and opposite sex has long been included in the provisions of many group health insurance plans. While DOMA is likely to require health plans to recognize same-sex spouses, it is more probable many of these individuals are already being covered on the health plan. Uncertainty remains at this point as to what regulations will be put into place to require employers to offer coverage.

Other questions have arisen on how the overturn of DOMA will play out with regard to the Affordable Care Act. The Washington Post recently questioned whether or not it will be in homosexual couple’s best financial interest to be married under the Affordable Care Act when it comes to determining income thresholds and eligibility for subsidies in the state exchanges.

Social Security

The court’s decision essentially grants the same benefits and protections to same-sex couples that have been provided to heterosexual couples under Social Security. Initial concerns from the opponents of the court’s ruling are warning of the higher costs that will be experienced. As discussed in Will The Overturning of DOMA Bankrupt Social Security? by the Center For Economic Policy Research, most of the impact on Social Security will come from the spouses of same-sex unions becoming eligible for retirement benefits as a result of marriage.

The test of entitlement at retirement is gauged by a spouse being eligible to half of their married partner’s benefit if this would be larger than the benefit they would receive based upon their own work history. Also, after a spouse dies, a surviving retiree is entitled to the greater of either their own benefit or their spouse’s. The addition of same-sex couples to the eligibility for these benefits could potentially lead to higher benefit payouts.

The larger gap in earnings between men and women make meeting the benefit eligibility more likely for heterosexual couples. However, this gap tends to be smaller relative to the earnings of two men or two women in a same-sex marriage; therefore the likelihood of meeting the wage-based eligibility is reduced. Also, the time period of payout will probably be shorter given the tendency of same-sex couples to be closer in age without the gender-based life expectancy differences. Restating in simpler terms, the similarities in the salaries and ages that are more common among same-sex couples will probably lessen the likelihood of collecting significant Social Security benefits.

The Congressional Budget Office estimated that the cost to Social Security in 2014 from recognizing same-sex marriages in 2004 would be $350 million which represents .04 percent of the projected $875 billion pay out for next year.

Government Revenue

Earlier this year, USA Today’s article on Who wins, who loses if Defense of Marriage dies advised same-sex couples won’t be the financial winners and the U.S. Treasury won’t be the loser if DOMA was overturned. The benefits gained by same-sex spouses include being able to file joint tax returns, estate tax exclusions, Social Security and veterans benefits, civil service and military pensions. However, a 2004 study by the Congressional Budget Office estimated that recognizing same-sex spouses through the overturn of DOMA would increase revenues by almost $1 billion a year over 10 years. The reason being a two-income same-sex couple with relatively equal earnings would pay more in taxes, not less.

In summary, same-sex marriage will undoubtedly continue to be an issue of much discussion on a number of fronts. As with any new and complex policy change, further determination is needed to assess the long term impact as we move forward with implementation. While still too early to begin postulating on the long term financial impacts, little is like to change in at least the short term with regard to items such as healthcare, Social Security and government revenue.

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