The Supreme Court Decision on the Defense of Marriage Act (DOMA): What Does it Mean for Wisconsin Employers?
A lot has been written about the recent Supreme Court decision in U. S. v. Windsor which invalidated part of the Defense of Marriage Act (DOMA). But what does this decision mean for a Wisconsin employer?
Right now only 13 states and the District of Columbia recognize same sex marriages. Wisconsin is not one of the states. In fact, currently Wisconsin, both by state statute and by state constitutional amendment, prohibits the recognition of same sex marriages. In addition, the Supreme Court ruling did not invalidate Section 2 of DOMA which provides that no state is required to recognize a same sex relationship that is considered a legal marriage in another state. This fact provides some employment and tax issues for Wisconsin employers.
For example, what happens when your business hires an individual who had entered into a same sex marriage in a state that recognizes such marriages before the couple moved to Wisconsin? The Windsor decision did not address which states' laws control for federal law purposes – the state of marriage or the state of domicile. This omission leaves many open questions regarding what happens to employee benefit packages such as qualified retirement plans, health and welfare plans, rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA), cafeteria plans, health savings accounts, health reimbursement accounts, and other employee benefits. While the IRS and the Department of Labor are expected to issue guidance in the future, what are employers supposed to do in the meantime? Also, since the Windsor decision declared Section 3 unconstitutional, typically such a decision is retroactive so that the law is considered never to having been valid. The extent of whether the decision is retroactive will have critical ramifications for all employee benefit plans.
In addition, the Supreme Court decision did not address domestic partnerships which are recognized in Wisconsin under the Wisconsin State Statutes, Section 770. While domestic partnerships are recognized under Wisconsin state law, the benefits provided to couples who file for domestic partnership fall far short of the benefits afforded to same sex married couples in those states which recognize same sex marriages. Therefore, the federal protections and benefits afforded by the Windsor decision do not appear to extend to relationships that are not recognized as "marriages" by Wisconsin state law. However, this issue may be addresses in future guidance from the federal agencies involved.
With all these unanswered questions, what should a Wisconsin employer do now, pending further guidance from the federal agencies? If you offer your employees any benefit plans as listed above, you should discuss the implications of the Windsor decision with your plan administrator. You should also review the definition of "spouse" in all plan documents to determine whether a plan amendment is necessary or desirable. Finally, you should review summary plan descriptions, other employee communications and plan administrative forms and procedures to determine whether changes and clarifications are warranted.
This area will be evolving. As the impact of the decision is felt and as the federal agencies issue guidance, I will post further information on this blog.