ThinkHR Alert: Supreme Court Extends Same-Sex Marriage Rights
On June 26, 2015, in a 5 – 4 decision, the Supreme Court decided in the case of Obergefell v. Hodges that the Fourteenth Amendment to the U.S. Constitution requires all states to grant same-sex marriages and recognize same-sex marriages lawfully performed in other states as a fundamental right.
This is the Court’s second major ruling on the subject of marriage. The U.S. v. Windsor decision in 2013 expanded the definition of marriage to include same-sex marriages but was limited to federal law and did not impact state rules, creating legal, benefits, and tax implications for employees and employers in the states where same-sex marriages were not allowed.
What this decision means for employers
This ruling will have direct implications for many human resources and benefits programs, and we expect the federal Department of Labor and the Internal Revenue Service as well as state employment and insurance departments to issue further regulatory guidance based on the Court’s ruling. Areas for employers in all states to consider include:
- Same benefits and tax treatment (federal and state) for same-sex spouses:
- Fully-insured health and welfare plans must extend coverage to same-sex spouses.
- Self-funded (self-insured) health and welfare plans may continue to use plan-specific definitions of spouse with the understanding that federal and state nondiscrimination laws apply. Further, the ERISA pre-emption provision protections for design flexibility for employers providing self-funded plans may no longer apply.
- Multistate employers providing benefits will now have consistency relating to benefits elections administration and notifications for same-sex couples in states that previously did not recognize the marriage.
- Differences in federal and state pre- and post-tax benefits calculations for same-sex couples in states where the marriages were not recognized will be eliminated.
- Paid time off (PTO) programs, including leaves of absence and time off for family members, should be reviewed to include same-sex spouses.
- Employers should review all company policies, benefits, and programs referring to programs for spouses to include same-sex spouses.
ThinkHR will continue to monitor developments and regulatory guidance relating to this ruling.