Recent events in Massachusetts regarding marriage have spawned a plethora of law firm publications on the implications of same-gender marriage as it relates to benefit plans. You can access three of such publications here (Jackson Lewis), here (Ropes & Gray) and here (Goodwin Procter). However, this recent article published by the Congressional Research Service (“CRS”) of the U.S. Library of Congress (via Benefitslink.com)–”The Effect of State-Legalized Same-[Gender] Marriage on Social Security Benefits and Pension“– makes an interesting point regarding the interplay between ERISA and the Defense of Marriage Act (“DOMA”):
DOMA provides that, in interpreting any federal statute, ruling, or regulation —including, for example, ERISA and the Internal Revenue Code — a spouse can only be a person of the opposite [gender] who is a husband or wife. Consequently, a pension plan cannot be required to recognize a same-[gender] spouse even if same-[gender] marriages are permitted under state law. Some benefits specialists have suggested that because Section 514(a) of ERISA preempts state laws that relate to employee benefits covered by ERISA, ERISA would therefore preempt any state law requiring the plan to recognize same-[gender] marriage for purposes of administering pension benefits. However, whether ERISA alone would preempt state laws recognizing same-[gender] marriage is irrelevant because DOMA prohibits recognition of same-[gender] spouses in the interpretation and application of federal law.
While the technical points of whether DOMA prevails or ERISA preempts provide for interesting thought and discussion, one of the main concerns that the marriage issue raises with respect to benefit plans has to do with the fact that, for income tax purposes, the IRS has historically maintained that an individual is considered to be a “spouse” if the applicable state law recognizes the relationship as a marriage. If, for example, state law recognizes common-law marriages as legal, an employer in that state would be required to recognize an employee’s common-law spouse as his or her legal spouse and IRS would recognize the marriage as valid.
Similarly, many plan documents have defined the term “spouse” as looking to state law as well. This is important for qualified plans as it impacts such matters as pre-retirement survivor annuity and joint and survivor annuity requirements as well as requirements pertaining to spousal consent and qualified domestic relation orders. Now, after recent events regarding marriage, plans which still contain this language of defining the term “spouse” as looking to state law or plans which do not define “spouse” at all, are problematic in affected states since the language, if left unchanged, is confusing, implying that same-gender marriages might be recognized under the plan document when, in fact, DOMA would dictate otherwise. This is why it is important to amend plan documents and revise Summary Plan Descriptions to clarify the issue, particularly for companies with employees in affected states.
The CRS article goes on to discuss how Social Security, the Federal Employees Retirement System, and the Civil Service Retirement Systems are also governed by DOMA and, therefore, would not be affected by state law changes pertaining to the definition of marriage.
Additional note: The Ropes & Gray article also has this interesting discussion regarding the interplay of DOMA and the Family Medical Leave Act (“FMLA”):
The FMLA defines “spouse” as “a husband or wife, as the case may be.” The U.S.Department of Labor’s regulations implementing the FMLA add the following unusual gloss to that statutory definition: “’Spouse’ means a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides.” The FMLA regulations (unlike the statute on which they are based) thus command employers to look to state law to determine the meaning of “spouse” for purposes of applying the FMLA.
The article notes that an argument might be made that the FMLA requires employers to provide leave to employees to care for a same-gender spouse, were it not for DOMA which was passed three years after the FMLA’s enactment, arguably replacing the definitions of “spouse” set forth in the FMLA. The article goes on to note that this interpretation is supported by a 1998 Department of Labor opinion letter in which the Department’s Wage & Hour Division explicitly advised that DOMA restricts the FMLA’s definition of “spouse” to opposite-gender spouses.
So if DOMA restricts FMLA to opposite-gender spouses, what does this mean for the employer who goes ahead and provides leave for same-gender spouses? It probably means that the leave cannot be designated as FMLA leave, and therefore an employee who took the leave to care for a same-gender spouse could be entitled to “double” leave where leave was later taken again in the same 12-month period for a purpose specifically covered by the FMLA, such as care of a child or a parent.