|March 3, 2011|
Previously published on February 28, 2011
For now, President Obama’s decision not to defend the constitutionality of the Defense of Marriage Act (“DOMA”) should not affect how employers administer their employee benefit plans. This Communiqué explains the President’s decision and its impact on employer-sponsored plans.
On February 23, 2011, Attorney General Eric Holder told Congressional leaders that President Obama has determined that Section 3 of DOMA, as applied to same-sex couples who are legally married under state law, is unconstitutional. Section 3 of DOMA says:
In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word “marriage” means only a legal union between one man and one woman as husband and wife, and the word “spouse” refers only to a person of the opposite sex who is a husband or a wife.
This one sentence means that employer-provided benefits, such as health benefits, that are tax free for opposite-sex spouses are subject to federal taxes when provided to a same-sex spouse. It also means that same-sex spouses are not considered a spouse for other benefit purposes. For example, a same-sex spouse has no right to COBRA continuation coverage upon divorce or when the employee terminates employment. Under retirement plans, a same-sex spouse is not eligible for a qualified joint and survivor annuity and cannot get a qualified domestic relations order. These are only a few examples of how DOMA prevents same-sex spouses from getting the benefits Congress affords to opposite-sex spouses.
Many employers may now wonder what effect the President’s decision that DOMA is unconstitutional will have on the administration of their benefit plans.
The answer - at least for now - is that the status quo under DOMA continues. In his letter to Congress, the Attorney General specified that the President will continue to enforce DOMA unless and until Congress repeals it or a court finds it to be unconstitutional. Even if the President decided not to enforce DOMA, it is still valid law and could be enforced other ways, such as through a participant lawsuit. Thus, for the time being, you should continue to administer your plans the same way you did before President Obama informed Congress of his decision not to defend DOMA.