In June 2013, the US Supreme Court ruled in US v. Windsor that a federal statute limiting the terms "spouse" and "marriage" to couples of the opposite sex was unconstitutional.
The Affordable Care Act has been stealing our focus, but we can't take our eye off the ball when it comes to important compliance issues regarding benefits for same-sex married couples.
Since the June 2013 US Supreme Court ruling in US v. Windsor that a federal statute limiting the terms "spouse" and "marriage" to couples of the opposite sex was unconstitutional, the Internal Revenue Service and US Department of Labor have been issuing advisories warning employers of actions they must take to bring their benefit plans and policies in to compliance.
Yet confusion remains because the government's advice is vague and inconsistent. The Department of Labor says that employers complying with the federal Family and Medical Leave Act must treat validly married same-sex couples as "spouses" and "married" only if the couples live in a state that recognizes same-sex marriage. But the IRS says that it doesn't matter where they live -- if same-sex couples were legally married.
This conflict between the DOL's "place of residency" standard and the IRS' "place of celebration" standard spotlights the challenge employers face in trying to become compliant.
Issues for employers to consider:
Profit sharing plans, 401(k)s and pension plans
Compliance with the Windsor ruling was required no later than June 26, 2013, according to the IRS. The terms “spouse” and “married” must include those individuals who are validly married in a state that
accepts same-sex unions. For example, consent must now be obtained from same-sex spouses if a plan requires spousal consent for a loan or designation of a beneficiary other than a spouse. Same-sex spouses must now be offered spousal joint and survivor benefits, and qualified domestic
relations orders now apply to them. Same-sex spouses must also be taken into account in the case of special rollover and minimum
"Neither ERISA nor the Affordable Care Act require that same-sex or opposite-sex spouses receive coverage under group health plans."
If a plan requires an amendment in order to comply with the Windsor ruling, the IRS required that the amendment be effective no later than June 26, 2013, and be active no later than the later of (i) the end of the plan's regular remedial amendment period, or (ii) December 31, 2014.
Welfare Benefit Plans
This is a grey area. The IRS has not yet stated requirements for employers who maintain welfare benefit plans such as group health, dental and vision plans, life insurance plans or cafeteria plans.
We concur with most employers who are taking a conservative approach in light of the Windsor ruling and treating validly married same-sex partners as "married" and "spouses" in all cases.
Neither ERISA nor the Affordable Care Act require that same-sex or opposite-sex spouses receive coverage under group health plans. You are still allowed to exclude spouses from your welfare plans.
But you must allow for same-sex spouse reimbursement under health care flexible spending accounts (FSAs), health savings accounts (HSAs) and health reimbursement accounts (HRAs). You also must grant same-sex spouses currently participating in your group health plan COBRA rights and HIPAA special enrollment rights.
After Windsor, same-sex spouses can receive group health benefits on a pre-tax basis under federal law and the cost of those benefits are no longer imputed income. Plan summaries, documents and payroll practices need to be changed to comply with these new rules.
Source: Christenson, Bob. 6/19/2014 Obamacare overshadows same-sex marriage benefit compliance - Articles - Employee Benefit News
http://ebn.benefitnews.com/news/ebn_co_compliance/obamacare-overshadows-same-sex-marriage-benefit-compliance-2742191-1.html 2/3same-sex unions.
Rylan Klaseen & Associates
Rylan Klaseen & Associates
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