By: Alan M. Levy
On September 18, 2013 the U.S. Department of Labor (“DOL”) issued Technical Release 2013-04 to address ERISA rights for same-sex spouses after the Supreme Court’s decision in United States v. Windsor, 133 S. Ct. 2675 (2013), invalidated parts of the federal Defense of Marriage Act. Largely consistent with the equivalent discussion from the Internal Revenue Service, Rev. Rul. 2013-17, DOL has stated that it will require that legally married same-sex spouses be treated under ERISA benefit plans in the same manner it has always applied for those in opposite-sex marriages.
The test for being “legally married” is based on the law in the state where the marriage ceremony took place, so, for example, a same-sex couple married in Iowa, New York, or Minnesota is considered legally married for purposes of federal law even if they subsequently live in a state (like Wisconsin) which does not recognize that marriage. For this reason, Wisconsin employers must be alert to the federal rules if any of their employees seek these benefits.
The two same-sex spouses then have all the ERISA rights of an opposite-sex married couple. In ERISA-governed retirement plans, each can be the “surviving spouse” of the other, and ERISA “joint and survivor” spouse benefits must apply to both. When the retirement plan rules require notice to or consent from a spouse (as when a participant designates a beneficiary or selects a joint and survivor retirement benefit), the same-sex spouse has the same rights to be notified and the same power to consent (or not) as the spouse in an opposite-sex marriage. Similarly, a same-sex couple who obtain a legal divorce can utilize a Qualified Domestic Relation Order (“QDRO”) to require that the participant’s same-sex former spouse receives part of the participant’s benefit.
The rules for ERISA welfare plans – including employer-provided health insurance – are somewhat less certain because a welfare plan may exclude a spouse regardless of gender. However, a health plan which only provides employee benefits to a spouse of the opposite sex and excludes a same-sex spouse is an invitation to litigation.
Employers should review their ERISA plan documents and amend those references which would improperly deny spousal benefits to same-sex spouses. Currently, all such references must be updated by December 31, 2013; although there are indications that IRS will extend this deadline, no announcement of that relief has yet been issued.
Should you have any questions about these new requirements and how they are to be enforced, please contact Alan M. Levy, an attorney with Lindner & Marsack who focuses on employee benefits.