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Department of Labor Issues Eligibility Guidance for Same-Sex Marriage Benefits

Employers with benefit plans governed by ERISA should be aware that the U.S. Department of Labor (“DOL”) has issued guidance with respect to the eligibility of individuals in same-sex marriages. Spousal eligibility for employment benefit plans under ERISA will now be based on the validity of the marriage in the state in which the marriage was performedwithout regard to the law of the state in which the couple presently resides. This position, often referred to as the “state of celebration” rule, was also recently adopted by the Internal Revenue Service (“IRS”) for all tax purposes including pension and welfare benefit plans and now paves the way for employers to offer benefit coverage to same-sex married couples.

Currently same-sex marriages are valid if performed in the District of Columbia and any of the following 13 states: California, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, and Washington. Thirty-five states including Missouri and Kansas do not recognize same-sex marriage. Illinois recognizes civil unions, but not same-sex marriages. The DOL has not yet indicated whether this position is retroactive or prospective in its application. It has indicated that, like the IRS, additional guidance will be forthcoming.

The DOL pronouncement follows the Supreme Court's landmark Windsor decision in June that struck down a portion of the Defense of Marriage Act (DOMA), which had required same-sex spouses to be treated as unmarried for purposes of federal law. The positions of the IRS and DOL apply to the definition of both “spouse” and “marriage” as those terms appear in the provisions of ERISA and the Internal Revenue Code.

The terms “spouse” and “marriage” will not include individuals in a formal relationship recognized by a state but not designated as a “marriage” under state law. Examples of such exclusions are domestic partnerships and  civil unions, regardless of whether the individuals in these relationships have the same rights and responsibilities as those who are married under state law, according to the DOL. This interpretation applies to individuals who are in such relationships with an individual of the opposite sex or same sex. 

© Copyright 2020 Armstrong Teasdale LLP. All rights reserved National Law Review, Volume III, Number 283
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Scott Hunt, Tax attorney, Armstrong Teasdale, law firm
Partner

A member of the firm’s Tax practice group, Scott Hunt handles matters relating to employee benefit and exempt organizations issues.

In the heavily regulated and constantly evolving field of employee benefits law, Scott monitors and analyzes all new legislation and regulations. He regularly designs stock option plans, phantom or restricted stocks, bonuses and various other types of incentive compensation plans and arrangements and advises with respect to tax, securities and corporate law issues that arise in connection with the establishment and administration of such plans.

...

314-342-4145
John Igoe, Tax, Employee Benefits, Trusts, Estates, Attorney, Armstrong Teasdale
Partner

As a member of the Tax, Employee Benefits and Trusts and Estates practice group since 1986, Jon Igoe guides individuals in the creation and administration of trusts and estates and in connection with closely-held businesses. He also handles guardianships, conservatorships and employee benefits issues involving health care plans.

314-342-8019
Jill Palmquist, Estate Planning Attorney, Armstrong Teasdale Law Firm
Of Counsel

Jill Palmquist specializes in estate planning and works closely with her clients to protect their families and wealth during transitional times such as illness, disability and death utilizing instruments such as powers of attorney, wills, revocable trusts, irrevocable trusts (including irrevocable life insurance trusts, irrevocable grantor trusts and charitable trusts) and limited partnerships. She has experience in dealing with special assets such as closely held stock, 401(k) plans, traditional and ROTH IRAs, Section 529 Plans; and in working with situations requiring extra consideration...

314-621-5070
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