After DOMA: Private Employment Issues and Benefits

7/28/2019 After DOMA: Private Employment Issues and Benefits

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Tis series of fact sheets produced together by:

American Civil Liberties Union | Center for American Progress | Family Equality Council | Freedom to Marry | Gay & Lesbian Advocates & DefendersHuman Rights Campaign | Immigration Equality | Lambda Legal | National Center for Lesbian Rights | National Gay and Lesbian Task Force | OutServe-SLDN

PRIVATE EMPLOYMENT ISSUES AND BENEFITS

Although discrimination against married same-sex couples under the De ense o Marria Act (DOMA) did not bar private employers rom o ering most spousal employmen

bene ts to employees same-sex spouses, it subjected same-sex couples to discriminatorytreatment and other orms o unequal treatment. For example, married same-sex couplehad to pay additional income taxes on the value o employer-sponsored health insurancthat married di erent-sex couples did not need to pay, and married same-sex couples whdivorced were barred by ederal law rom obtaining a court order sharing pension beneas part o a divorce agreement.

Now that DOMA has been struck down, we urge married same-sex couples with employsponsored retirement bene ts to immediately review your benefciary designations an orm o beneft elections to ensure that your designations and elections are accurate ancomplete, and that they re ect your wishes. Your rights may have changed, and waitimay hurt you and your amily.

Tis Guidance addresses some o the marriage-related issues regarding employer-sponsorretirement plans and health insurance bene ts that are regulated by ederal law.

For more in ormation about ederal regulation o employee bene ts, see: www.dol.gov/ebsa/ aqs/ aq_compliance_pension.html

www.aging.senate.gov/crs/pension7.pd

What rights does ederal law provide to married employees with respectto employer-sponsored health insurance benefts?

I your spouse is covered under your employers health planand you are considered validlymarried by the ederal government, you and your spouse should be eligible or the ollowiadditional ederal protections: Te value o your spouses health insurance will not be treated as taxable income to yo

(the employee) or to your spouse. Your spouse and children have the right to remain in your health plan i you lose yo

job or your hours are reduced, or i you divorce or separate. Tis is known as COBRcoverage or COBRA continuation coverage. While your employer has to allow yand your children and spouse to remain insured, you can be required to pay the ull coo those bene ts. ( Nothing prevents a plan from providing continuation coverage todomestic partners, but such coverage is not required by federal law.)

While most health plans only let you enroll at speci c times, marriage or divorce aquali ying events that will let you enroll or un-enroll outside those speci c time periods

In addition to these protections, you and your spouse may have other rights under state law

Keep in Mind: Te Supreme Courts ruling in Windsor applies only to the ederal

government. It does not change discriminatory state laws excluding same-sex couples rom state-con erred marriage rights.

Te ruling striking down DOMA will not be e ective until 25 days

rom the decision. Even when e ective, ederal agencieslargebureaucraciesmay need and take some time to change orms,implement procedures, train personnel, and efciently incorporatesame-sex couples into the spousal-based system.

Until same-sex couples can marry in every state in the nation, there will be uncertainty about the extent to which same-sex spouses willreceive ederal marital-based protections nationwide. For ederalprograms that assess marital status based on the law o a state thatdoes not respect marriages o same-sex couples, those state laws

will likely pose obstacles or legally married couples and surviving spouses in accessing ederal protections and responsibilities.

Securing air access to ederal protections that come with marriageor all same-sex couples in the nation will take some time and work.In some situations, it may require Congressional action or ormalrule-making by agencies.

Be ore making a decision, it is essential that you consult an attorney or individualized legal advice. Tis is particularly important orpeople who are on certain public bene ts, as getting married may

jeopardize your eligibility without providing you the ull measureo protections other married couples enjoy. In addition, couples

who travel to another place to marry and then return to live in a state that does not respect their marriage may be un airly unableto obtain a divorce, which can lead to serious negative legal andnancial consequences. People must make care ul decisions whenand where to marry, even as we work together to end this injustice.

We are committed to winning universal access to ederal maritalprotections or married same-sex couples through ongoing publicpolicy advocacy, and, where necessary, strategic litigation. Contactour organizations i you have questions, or updates and to learnmore about what you can do to achieve ull equality or those whoare LGB .

Tis Guidance is intended to provide general in ormation regarding major areas o ederal marriage-based rights and protections based onhow the various ederal agencies have administered ederal bene ts.It should not be construed as legal advice or a legal opinion on any specifc acts or circumstances, and does not create an attorney-client relationship . Past practice is no guarantee o uture developments.

While laws and legal procedure are subject to requent change anddi ering interpretations in the ordinary course, this is even more truenow as the ederal government dismantles DOMA and extends ederalprotections to same-sex couples. None o the organizations publishing this in ormation can ensure the in ormation is current or be responsibleor any use to which it is put.

No tax advice is intended, and nothing therein should be used, andcannot be used, or the purpose o avoiding penalties under the InternalRevenue Code.

Contact a quali ed attorney in your state or legal advice about yourparticular situation.

The Supreme Court victory in United States v. Windsor striking down the discriminatory ederal De ense o Marriage Act (DOMA) a frms that allloving and committed couples who are married deserve equal legal respect and treatment rom the ederal government. The demise o DOMAmarks a turning point in how the United States government treats the relationships o married same-sex couples or ederal programs that are linkedto being married. At the same time, a turning point is part o a longer journey, not the end o the road. There is much work ahead be ore same-sexcouples living across the nation can enjoy all the same protections as their di erent-sex counterparts.


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AFTER DOMA: WHAT IT MEANS FOR YOU PRIVATE EMPLOYMENT ISSUES AND BENEFITS 2



What rights does ederal law provide to married employees with respect to private retirement benefts?

I you are considered validly married by the ederal government and eligibleor a pension or other employer-sponsored retirement plan, ederal law hasspeci c requirements that your plan must ollow in order to maintain tax-quali ed status: Te de ault orm o bene t or a de ned bene t pension plan (i.e.,

a traditional pension that guarantees a speci c monthly paymentat retirement) must be a joint and survivor spousal annuity (QJSA).Tis means that a portion o your pension will continue to be paid toyour spouse i you die be ore your spouse does, although you and yourspouse together can decide to waive this right and name someone elseas the bene ciary.

I you die be ore reaching retirement age, your spouse is entitled to a pre-retirement survivor annuity (QPSA) rom a de ned bene t pension plan.

Your spouse has to give written consent i you want to name anyone elseas your bene ciary or your retirement plan.

Being married entitles your spouse to more options in taking distributions (regarding the timing o payments, and the amount youcan receive) rom your retirement plan, and to pre erential tax treatment

o those distributions. Your plan may also allow you to take money out o a retirement account

without tax penalty to pay expenses like medical costs, tuition, oruneral expenses or your spouse.

Finally, i you get divorced, the courts can ensure that your ex-spousereceives a portion o your retirement plan assets as part o the divorceagreement. Tis is called a Quali ed Domestic Relations Order, or QDRO.

Which marriages will be considered valid by the ederalgovernment or benefts purposes? If you live in a state that respects your marriage: Te ederal

government will consider your marriage valid, and you have a rightto all the protections that are required to be o ered to spouses underederal law.

If you live in a state that doesnt respect your marriage: Because someo these programs are regulated by the Internal Revenue Service and theDepartment o Labor, it may take some time to obtain guidance romthe relevant agencies as to which marriages will be treated as valid by the ederal government. Tere may be some initial uncertainty or a period o time because the IRS ordinarily ollows the law o the stateo domicile (primary residence) in determining whether to recognize a marriage. However, there is no statute or regulation compelling thisapproach, and the IRS has recognized common law marriages or tax purposes as long as they were valid in the state where they were enteredinto. In our mobile society, it would make more sense or the ederal

government to recognize all marriages that were valid where entered.I you encounter problems or have questions, contact one o the legalorganizations listed below.

Which employers are subject to the ederal laws that regulatepensions and other employment benefts?

Tese ederal laws generally apply to employers that o er retirement andhealth bene ts, sometimes re erred to as ERISA plans. Some o theserequirements, particularly the retirement plan obligations, do not apply to

ederal, state, or local government employers, or to churches or religioassociations or conventions o churches (although some religious employechoose to be governed by these ederal laws). Health plans maintainby private-sector employers with 20 or more employees, employeorganizations, or state or local governments are covered by COBRA.

Does my employer have to change its pension plan be ore

my spouse will be entitled to these protections, or will myspouse automatically be eligible?

It depends on what your plan documents say, and may depend on whickind o bene t is at issue. I your plan, like most, simply re ers to spousesyour employer doesnt necessarily need to change anything in order include spouses o the same sex. I your plan states that spouse meaonly di erent-sex couples, or is determined by re erence to the law o state that does not respect your marriage, your plan documents likely neeto be revised to comply with ederal law. But, you and your spouse shoube entitled to protections in the meantime even i your plan doesnt changits language. alk with someone in your human resources department. Iyou still have questions, contact one o the organizations listed below, orlawyer who specializes in employee bene ts.

What should I do i I am told that my plan wont covermy spouse?

I your employer or your retirement or health plan tells you that your spous will not be treated as di erent-sex spouses are, it may be important to acquickly to preserve your rights. Sometimes the issue can be cleared

with a conversation, but you must ollow the speci c time limits to appeadeterminations made by your plan. Contact one o the organizations listebelow, or a lawyer who specializes in employee bene ts.

I my employer decides to start allowing spouses o the samesex to enroll in the health plan, when can I enroll my spouse?

Will I need to wait until open enrollment?

It depends. Generally, marriage is a quali ying event or adding a spouto the health plan. Even i you may have already been married or seveyears be ore DOMA was struck down, you should ask your employer i thchange in ederal law is a quali ying event. Its also possible that some pl

will wait until the next open enrollment season in advance o a new playear to allow employees to make changes to their bene ts to add spous

who had been unable to obtain coverage previously.

What i I got divorced while DOMA was still in e ect, andI was unable to get an order sharing my retirement savings

with my ex-spouse as part o my divorce?

Federal law has strong protections or your retirement savings, angenerally prevents your plan rom paying bene ts to anyone but you oyour bene ciary. One exception allows you to share those savings wiyour ex-spouse as part o a divorce agreement. Tis is called a Quali edDomestic Relations Order, or QDRO. I you were unable to obtain aQDRO when you divorced and now want to seek one, consult a quali edattorney about whether it is possible to re-open the divorce proceeding.


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AFTER DOMA: WHAT IT MEANS FOR YOU PRIVATE EMPLOYMENT ISSUES AND BENEFITS 3



What i my spouse retired or died while DOMA was in e ect,and I was told I was not entitled to a spousal survivor annuity?

Its possible, though not certain, that you still might be able to receivea survivor annuity (QJSA or QPSA). I you did, you would continueto receive payments, but you also might have to pay back some o themoney your spouse has already received rom the plan, since taking a QJSA ordinarily means that the employee receives a lower payment at retirement,so that his or her spouse can continue to receive some o the bene t i theemployee dies be ore the spouse. We recommend that you talk with anemployee bene ts lawyer to nd out whether it would make sense to apply or a spousal annuity in your individual circumstances.

FOR MORE INFORMATION, CONTACT AMERICAN CIVIL LIBERTIES UNION

aclu.org/lgbt

NATIONAL CENTER FOR LESBIAN RIGHTSnclrights.org

GAY & LESBIAN ADVOCATES & DEFENDERSglad.org

LAMBDA LEGALlambdalegal.org

After DOMA: Private Employment Issues and Benefits

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