The Illinois Senate voted Thursday, February 14, 2013, in favor of a bill to legalize same-sex marriage. The bill now goes before the Illinois House of Representatives (the House), where greater opposition is expected. Governor Pat Quinn has indicated he will sign the bill if it is passed by the House. If enacted, same-sex marriage would become legal in Illinois 30 days after it is enacted. Illinois would be the 10th state to legalize same-sex marriage. Same-sex marriage is already legal in Connecticut, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont, Washington and the District of Columbia. In addition, California recognizes same-sex marriages performed between June 17-November 4, 2008. If same-sex marriage is legalized in Illinois, employers will need to consider whether their benefit plans and procedures need to be updated to address benefit eligibility of same-sex spouses.
Voters in Maine, Maryland and Washington approved the legalization of same-sex marriage in their states. In addition, voters in Minnesota rejected a state constitutional amendment to define marriage as an opposite-sex union. The outcome of these referendums adds complexity to the options and obligations of employers in providing benefits for employees’ same-sex spouses and partners.
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Voter referendums on same-sex marriage will be on the November ballots in four states: Maryland, Washington, Maine and Minnesota. The outcome of these referendums may complicate the options and obligations of employers in providing benefits for employees’ same-sex spouses and partners.
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Developments in state same-sex marriage laws have added complexity to the options and obligations of employers providing benefits for employees’ same-sex spouses and partners. These conflicting developments—some legalizing same-sex marriage and others restricting marriage to an opposite-sex union—are occurring at an increasingly rapid pace. Further complicating the issue is that changes are occurring by judicial action, legislative action and voter referendums.
The U.S. Court of Appeals for the Ninth Circuit ruled in February 2012 that California’s state constitutional ban on same-sex marriage violates the Equal Protection Clause of the U.S. Constitution. Same-sex marriage was legalized in California in 2008, but was banned a few months later after state voters approved Proposition 8, an amendment to the state constitution that defines marriage as a union between a man and a woman. Despite the court ruling, same-sex marriage remains on hold in California pending the expected appeal of the decision.
Washington and Maryland are the most recent states to legalize same-sex marriage under laws enacted by their respective state legislatures earlier this year (although voters in these states may ultimately decide whether the new laws will take effect, if opponents of the laws are able to collect enough signatures to support a voter referendum in each state). The Illinois legislature is also currently considering a bill to legalize same-sex marriage. Meanwhile, a bill to repeal New Hampshire’s 2009 same-sex marriage law has been introduced in the state’s legislature. If passed, New Hampshire would be the first state in which the legislature has reversed itself on the issue of same-sex marriage.
This year voters in Maine will consider whether to legalize same-sex marriage. Same-sex marriage was legalized by the Maine legislature in 2009, but was repealed by a previous voter referendum before the law took effect. Meanwhile, voters in Minnesota and North Carolina will consider whether to amend their respective state constitutions to define marriage as an opposite-sex union (both states already have laws banning same-sex marriage). Twenty-nine states have amended their constitutions to limit marriage to opposite-sex couples; an additional 12 states have enacted state laws banning same-sex marriage.
Next Steps for Employers
The rapid developments in state laws regarding marriage and other forms of same-sex unions makes providing benefits to employees’ same-sex spouses and partners an evolving challenge. Employers should consider whether their benefit plans and procedures need to be updated to address varying state law approaches to the recognition of marriages and/or other forms of same-sex unions. In addition, employers need to ensure their payroll systems are structured to reflect the differing federal and state tax treatment of benefits provided to employee’s same-sex spouses and partners.
On February 7, 2012, the U.S. Court of Appeals for the Ninth Circuit found California’s Proposition 8, which amended the California Constitution to ban same-sex marriage, to be unconstitutional because it violated the Equal Protection Clause of the U.S. Constitution. Supporters of Proposition 8 have vowed to appeal the ruling to the Supreme Court of the United States, and it is unclear whether the entire Ninth Circuit might agree to hear the case en banc.
The lower court had previously held Proposition 8 unconstitutional for two separate reasons: (1) it impermissibly deprived same-sex couples of the fundamental right to marry guaranteed by the Due Process Clause of the U.S. Constitution, and (2) it violated the Equal Protection Clause of the U.S. Constitution because it excluded same-sex couples from state-sponsored marriage while allowing opposite-sex couples to marry. The Ninth Circuit affirmed the lower court, but narrowly tailored its decision to facts specific to California. Because same-sex couples had previously been granted the right to marry and Proposition 8 eliminated that right, the Ninth Circuit limited the question before it to whether California had a legitimate reason to take away same-sex couples’ right to the official status of “marriage,” rather than the substitute label of “domestic partnership.” The Ninth Circuit found no such legitimate reason, stating “Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gays and lesbians in California, and to officially reclassify their relationships and families as inferior to those of opposite-sex couples.”
Because the Ninth Circuit’s decision was focused on facts specific to California, the ultimate legal effect of the ruling is likely to be limited to California.
For now, same-sex marriage in California continues to be on hold because the Ninth Circuit affirmed the lower court’s stay pending further appeal. By keeping the stay in place, same-sex marriages will not resume in California until the appeal process runs its course (or until a court lifts the stay). As a result, the immediate effect of the decision on employee benefits is to maintain the status quo. While additional same-sex marriages cannot yet take place, California does recognize the approximately 18,000 same-sex marriages performed in 2008 before Proposition 8 was passed. Further, couples in California can still enter into spousal-equivalent domestic partnerships, meaning employers may have several different types of same-sex relationships to address in their employee benefit arrangements. Employers should keep an eye on further developments in California as litigation surrounding Proposition 8 winds its way through the appeal process. If and when same-sex marriages resume in California, employers will need to carefully review their employee benefit plans and programs to determine what changes are necessary or desirable.
As same-sex marriages began taking place over the weekend in New York state (click here for more information on the benefit implications of that development), another development that could have even more far-ranging implications for benefit plans also occurred last week. Specifically, last week the Senate Judiciary Committee held hearings on a bill entitled the “Respect for Marriage Act” which would repeal the Defense of Marriage Act’s (DOMA) definition of marriage for purposes of federal law as a union between one man and one woman. If the Respect for Marriage Act were enacted, it would -- among other things -- significantly complicate the administration of benefit plans on a multitude of issues such income tax inclusion, COBRA, death benefits, etc. (For more information, click here). There could also be significant confusion regarding whether a same-sex marriage entered into in one state can or must be recognized by another state; the federal DOMA inspired many states to enact their own mini-DOMA statutes, the constitutionality of which might be in question if the Respect for Marriage Act were enacted.
Legislative prospects for the Respect for Marriage Act are difficult to predict. However, consistent with the Administration’s position to stop enforcing portions of DOMA (click here for more information), the President has indicated his willingness to sign the Respect for Marriage Act if presented to him.
Now that same-sex marriage has been legalized in the state of New York, employers should expect to begin seeing an increase in requests for spousal benefit coverage from employees who have legally married their same-sex partners. The new law takes effect on July 24, 2011.
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On February 23, 2011, U. S. Attorney General Eric Holder issued a press release indicating that the federal government will no longer defend the constitutionality of Section 3 of the federal Defense of Marriage Act (DOMA). Section 3 of DOMA provides that for all purposes under federal law, 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 wife.
Despite the symbolic value of the attorney general’s press release, the release by itself does not change existing federal law. Therefore, until DOMA is officially held to be unconstitutional by the U.S. Supreme Court or repealed by Congress, same-sex couples are not entitled to any of the benefits that opposite-sex married couples are entitled to under federal law, and states are still authorized to refuse to recognize same-sex marriages validly performed in other states where such unions have been legalized.
It is important to note that the press release does not speak to the constitutionality of Section 2 of DOMA, which provides that states may refuse to recognize same-sex marriages performed in other states where such unions have been legalized. If Section 3 of DOMA is ultimately found to be unconstitutional, Section 2 of DOMA may still remain intact. Under this scenario, same-sex couples married and living in the relatively few states that recognize same-sex marriage would be entitled to federal law benefits currently provided to opposite-sex couples, while at the same time same-sex couples living in the majority of states that do not recognize same-sex marriage would continue to be denied these same federal rights and privileges.
Employers should continue to closely monitor the federal cases involving the constitutionality of DOMA. The federal government’s decision not to defend Section 3 of DOMA will undoubtedly have a significant impact on the results. For more information, see Federal Government Refuses to Defend Defense of Marriage Act - Now What? and Court Rulings that Federal Ban on Same-Sex Marriage is Unconstitutional Raises Significant Implications for Employee Benefit Plans.