By J. Smith Lanier
You have certainly heard by now that the Supreme Court in a narrow 5-4 decision has ruled that same-sex couples have a fundamental right to marry, citing the 14th Amendment. This will have an impact on employee benefit plans in the states that currently ban same-sex marriage. Those states include: Alabama, Georgia, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee and Texas.
At first blush it appears that in these states plans must enroll spouses of same-sex marriages right away. We doubt one could justify waiting until open enrollment. Yet there may be some areas of question and confusion. First, understand that a Supreme Court ruling is not an order to place a decision into effect. Obergefell came from the Sixth Circuit which ruled in favor of same-sex marriage bans, so the Supreme Court will send its decision there, and that court may have some comments regarding effective date and so forth. We would not expect the decision to be retroactive in any manner.
Secondly, the Obergefell decision is that same-sex couples can legally marry across the land. It does not deal with any ERISA or ACA issues. There is no mandate under ERISA or ACA to cover spouses, and Obergefell does not change that. It is conceivable an employer in one of these 13 states who might be put off by the decision could elect to discontinue spousal coverage altogether. It is also conceivable an employer may none the less continue to exclude same-sex spouses from eligibility, which is possible under ACA or ERISA. Again, this case makes no change to ERISA or ACA, neither of which compel a plan to offer spousal coverage. This would be easier done with a self-funded plan, because the states in question will have to change their definitions of marriage, but the self-funded plan does not have to follow state insurance statutes. Parenthetically, we would guess an employer that did this could be open for legal action from some sort of discrimination claims?
Also, employers in the above 13 states who have eligibility for domestic partners in their plans may want to look at scrapping that provision now that same-sex marriage has been certified; unless their intent was to cover those living together out of marriage. And there always is a possibility, we suppose, that a state or two may resist in some manner.
Our retained ERISA counsel is studying the decision and looking at the impact and possible implications, so we may have more information forthcoming. We also would anticipate some guidance from both Department of Labor and IRS down the road. But for now for employers in those 13 states, best practices it seems to us would dictate that enrollment be opened immediately for spouses of legally-married, same-sex couples.
Finally, commenting on the King decision yesterday supporting premium tax credits in the federal exchange, there is nothing for employers or individuals to do. It is business as usual. This decision was by a 6-3 margin, and the court determined that in spite of the language in the code, the overall intent and spirit of ACA was that everyone has the availability of premium tax credits; and that IRS had not overstepped its bounds by making such interpretation when writing the regulations.
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