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The U.S. District Court for the District of Massachusetts has issued
decisions declaring the federal Defense of Marriage Act (DOMA)
unconstitutional. Employers should be aware that the decisions could
have significant implications for employee benefit plans.
On July 8, 2010, the U.S. District Court for the District of
Massachusetts issued two separate decisions declaring the federal
Defense of Marriage Act (DOMA), which prohibits the recognition of
same-sex marriages for purposes of any federal law, unconstitutional.
Although the Department of Justice (DOJ) is expected to request a stay
of the decisions pending an appeal, the decisions could have significant
implications for employee benefits plans considering the many
federally-mandated spousal benefits that were previously not required
to apply to same-sex marriages in light of DOMA.
The Equal Protection Decision
The first case, Gill v. Office of Personnel Management, was
filed on behalf of eight same-sex couples who are legally married in
Massachusetts and three surviving spouses of same-sex marriages
performed in the state. Each of the plaintiffs applied for a certain
federal benefit or program that is extended to legal spouses or the
surviving spouses of a valid marriage (e.g., spousal benefits
under federal income tax laws, employee benefits provided to federal
workers and retirees, and Social Security survivor payments), but was
denied the benefit because the DOMA prohibited their marriage from being
recognized under federal law. The Massachusetts district
court found that the government's justifications for the DOMA failed to
establish a rational relationship between prohibiting federal
recognition of same-sex marriages and a legitimate government objective;
as a result, same-sex couples were denied equal protection under the
laws as guaranteed by the equal protection principles of the Due Process
Clause of the Fifth Amendment.
The Tenth Amendment (States' Rights) Decision
The second case, Coakley v. U.S. Department of Health and Human
Services, was filed by Massachusetts Attorney General Martha Coakley
on behalf of the Commonwealth. The Attorney General argued that the
DOMA impermissibly denies more than 16,000 same-sex couples who are
legally married under Massachusetts law the rights and protections
afforded by over 1,100 federal laws through programs such as MassHealth,
a Medicaid program that provides healthcare to low income residents,
and the burial of Massachusetts veterans and their spouses in cemeteries
owned and operated by the Massachusetts Department of Veterans
Services. The Attorney General argued that the DOMA
interferes with Massachusetts's sovereign authority to define and
regulate the marital status of its residents. The district
court ruled that the DOMA was unconstitutional because it interferes
with the rights of a state to regulate marriage and forces Massachusetts
to discriminate against its own citizens. According to
the district court, "[t]he federal government, by enacting and enforcing
DOMA, plainly encroaches upon the firmly entrenched province of the
state, and in doing so, offends the Tenth Amendment. For
that reason, the statute is invalid."
Impact on Other DOMA Provisions
The lawsuits challenge only the portion of the DOMA that prevents the
federal government from affording pension and other benefits to
same-sex couples. The rulings do not address Section 2 of
the DOMA, which stipulates that no state shall be required to recognize a
same-sex relationship that is considered a legal marriage in another
Next Procedural Steps
The DOJ, as the defendant in the cases on behalf of the federal
government, is expected to appeal and request a stay of the decisions.
If a stay is granted, the DOMA will continue to be valid and
enforceable pending the outcome of the appeal.
What Should Employers Do Now?
Assuming the DOJ is successful in obtaining a stay of the decisions,
employers will need to closely follow the progress of the appeals of
these cases (and separate DOMA litigation in California). Repeal of the
DOMA would presumably once again cause federal law to defer to state
law determinations of otherwise valid marriages. Federal
laws governing employee benefit plans would then likely require
employers to treat employees' same-sex and opposite-sex spouses equally
for purposes of the benefits that the employer extends to spouses.
For example, in the retirement plan context, employers with pension and
401(k) plans would be required to recognize same-sex spouses for
purposes of determining surviving spouse annuities or death benefits
under their retirement plans. Similarly, in the welfare
plan context, items such as the federal income tax treatment of health
coverage for an employee's same-sex spouse would change such that
employees would no longer have to be taxed on the income imputed for the
employer's contribution to the same-sex spouse's coverage, and COBRA
continuation would be required to be offered to same-sex spouses.
Employers would also be required to permit employees to take family and
medical leave to care for the illness of a same-sex spouse
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