Unless you were hiding under a rock last week, you know that in United States v Windsor, the Supreme Court overturned the key provisions of DOMA making legal (or at least failing to make illegal, but I guess those are the same things) marriage between one woman and another woman or one man and another man. I won't get into whether this will also open the door for polygamist or incestual marriages; this is for another prognosticator, far more clairvoyant than I.
I'll discuss some of the new issues, but first I digress. Often in this blog, I discuss things related to the Employee Retirement Income Security Act (ERISA). ERISA is federal law. By statute, generally, it preempts state law. Therefore, DOMA affected ERISA plans. Marriage has been defined under federal law. But, marriage is also defined under state law, and as we all know, there are 50 states. This leaves room for 50 separate laws. I will describe this as not a pretty picture.
Anyone with virtually any knowledge of ERISA knows that bona fide spouses have certain special rights under ERISA. Among them are these (by no means an exhaustive list):
- In some plans, spouses are entitled to preretirement death benefits. So, in the case where two people of the same gender were legally (under state law) married before this case was overturned and the participant died, is the spouse retroactively entitled to preretirement death benefits? Suppose they are and suppose those benefits were already paid to someone else, does that mean that the plan can recoup the money that it already paid to another beneficiary? Does it mean that the plan must recoup the money it paid to another beneficiary?
- In the event of divorce, spouses may be entitled to qualified domestic relations orders (QDROs) or qualified medical child support orders (QMCSOs). I think this one is generally simpler. You see, divorce orders, even where QDROs and or QMCSOs could apply are not required to include them. But, wait, there's more. Suppose two individuals had been legally married under state law, but not under federal law and got divorced. And, suppose the value of a pension that one of them had was not considered in a divorce settlement because of DOMA. Would a court revisit this? That's pretty complicated.
- Participants in an ERISA health benefits plan can make pre-tax contributions for spousal (and spouse's children) benefits. They missed the opportunity in some cases. How does this get rectified?
- And, since spouses are generally eligible for coverage under these plans, that makes them eligible for COBRA coverage. But, COBRA coverage needs to be elected on a timely basis. And, in fact, it needs to be offered on a timely basis. And, this is another one where I can see the problem, but don't know the answer.
- Many elections under ERISA require spousal consent. Since ERISA is federal law, spouses who had been valid under state law did not have the opportunity to give consent in these situations. So, obviously, they didn't give such consent. Now what?
And, then there are the tax issues. Does a legally married same-sex couple get to refile taxes? For how many years? For open tax years only, or are they entitled equal protection? What about their employers who offered same sex marriage benefits? Do they get to refile taxes? Suppose they covered domestic partners as well? Are they covered by this decision in states that don't yet condone same-sex marriage? (I don't think so, but please don't come to me for legal advice that I am neither qualified nor authorized to provide).
Finally, I can't leave this topic without commenting on a special issue that arises in my home state for the last 25 years. Georgia, at least since I have been a resident, has chosen to simplify its income tax process by basing it on one's federal tax filing. Suppose a same-sex couple was legally married in a state that permits it (Georgia does not yet permit it). Further suppose that couple now chooses to file their federal income taxes as "married" or using their other option of "married, but filing separately." Georgia income tax forms tell me that I must file for state purposes using the same status as I do for federal purposes. Do we still do this? If a same-sex married couple can't do it, then are other couples entitled to not do it? How does this work?
What does the Supreme Court think of this? Actually, the justices probably don't care. it's not their problem. They've made their decisions. Implementation, except where it does not comport with their rulings, is neither their purview nor their concern. Maybe they should all need to take a turn in a human resources department. On second thought, maybe not.