Same-Sex Married Couples now Entitled to Federal Employee Benefits? Supreme Court Strikes Down DOMA

By Kelline R. Linton,
Junior Associate.


Today, the United States Supreme Court struck down DOMA, the Defense of Marriage Act, in United States v. Windsor with a vote of 5-4.  The Court ruled that DOMA is unconstitutional under the Fifth Amendment because it deprives the equal liberty of same-sex married couples that is constitutionally protected.  This court decision means that same-sex couples who are legally married may now be entitled to equal treatment under federal law with regard to federal employee benefits, such as health insurance, tax incentives, and Social Security payments.  Federal employees living in the 13 states—California (effective July 21, 2013), Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, and Washington—and the District of Columbia where same-sex marriages are legal may now be entitled to receive full spousal benefits; however, same-sex couples living in the 37 states that do not recognize same-sex marriage may only be entitled to a fraction of the federal spousal benefits depending on the guidelines of an estimated 1,138 federal privileges and programs that use marital status as a criterion for eligibility.


So what is an employer to do?  We recommend you review your administrative procedures and consider how defining “spouse” to include same-sex spouses may now affect federal benefits.  For example, for health insurance benefits, you may be required to allow employees to make immediate changes to their health coverage elections depending on the terms of the health insurance plan, particularly when employees may have declined spousal coverage in light of the federal tax consequences.  On the other hand, for federal tax benefits, you may be entitled to federal payroll tax refunds if you currently impute income to an employee for the fair market value benefit coverage for a non-dependent same-sex spouse.  Each federal employee benefit program should be evaluated in light of the Supreme Court’s decision.  We also recommend you review the terms of your specific health insurance policy with your agent to determine what is currently covered and how the coverage may have to change under this ruling.  If you have questions, or would like advice on compliance, do not hesitate to call us!