What the Supreme Court’s DOMA Ruling Means for Employers
In the aftermath of the high court’s decision on DOMA, employers will need to amend their benefit plan documents and practices to provide equal treatment of same-sex and opposite-sex spouses, at least with respect to those employees who live in states that allow for or recognize same-sex marriage.
Here’s a rundown of some of the changes that are expected (at least in the states that allow gay marriage):
- Employers will no longer be required to impute as additional income to an employee the value of employer-paid health care provided to an employee’s same-sex spouse, and employers will no longer be subject to the corresponding payroll tax costs associated with that income.
- Employers will have to reprogram payroll systems that currently withhold income tax and withhold and pay FICA tax, with respect to the health coverage provided to same-sex spouses. Other steps may involve filing refund claims for taxes paid on the value of same-sex spouses’ health care coverage.
- An employee will be entitled to take FMLA (Family and Medical Leave Act) leave in order to care for a same-sex spouse, assuming all other requirements to take FMLA leave are satisfied.
- Retirement, pension plan and survivor benefits will be required to be provided to same-sex spouses. In addition, a same-sex spouse will have a right to receive various notices of spouses’ rights, and an employee will have to get the spouse’s written consent to name a nonspouse beneficiary.
- Employees will be able to get reimbursement from health flexible spending accounts and health reimbursement accounts for medical expenses of same-sex spouses.
- Same-sex spouses will be eligible for tax-free employer health benefits.
- Same-sex spouses will generally be eligible for federal COBRA coverage.
Class-action suits have their place in our legal system. Some have advanced social justice by holding corporations accountable for egregious violations, such as employment discrimination, price fixing, selling dangerous products and fraudulent labeling.
But too many of these lawsuits are based on nit-picking offenses, with negligible compensation for the “injured” consumers and excessive enrichment of the lawyers. Sadly, they drive up the cost of doing business in America, and we all pay. Knight Kiplinger takes on the ethics of class-action suits. Read more here.