The Defense of Marriage Act Ruling and COBRA Considerations

On June 26, 2013, the Supreme Court struck down section 3 of the Defense of Marriage Act, a federal law that had given the definition of “marriage” as a legal union between one man and one woman as husband and wife, and “spouse” as a person of the opposite sex who is a husband or a wife (United States v. Windsor, 570 U.S.__ (2013). Prior to this Windsor decision, the Defense of Marriage Act virtually meant that employers were not required to offer equal benefits to their employees in same-gender marriages. Although these same-gender partners were allowed the legal right to marry in many states, the majority of these couples were not receiving equal treatment from their employers with regards to health insurance and other employee benefits. But after the Supreme Court’s ruling, many employers are offering domestic partnership coverage – after all, the federal government now generally recognizes same-gender spouses as married in regards to federal laws, protections and legal obligations.

When the Defense of Marriage Act was declared unconstitutional it basically tossed the definition back into the hands of the individual states. If a state legally recognizes someone as a spouse, then the federal law will follow suit; however; the Windsor decision doesn’t force a state to recognize same-sex marriages. This could be confusing for employers in those stated that have chosen not to recognize these same-sex marriages and a bit tricky when it comes to the COBRA implications.

When employers are making the decision on whether to offer benefits to same gender spouses, many considerations must be given. For example, the date of the decision to offer COBRA benefits could be a somewhat sketchy because one could argue that because if the Defense of Marriage Act was declared unconstitutional does that say that it was always unconstitutional? Should employers go back retroactively and offer COBRA benefits to same-gender spouses that were not offered coverage at the time before the Windsor decision was made? The answer is not so clear and brings up many questions regarding effective dates.

Residency requirements can be another challenge – what if a same-gender couple that is legally married in one state moves to another that does not recognize their marriage? What about employers that operate in multiple states? The federal government seems to make no distinction on the state of residency and there has been legislation introduced that opts for the “place of celebration” to be the determining factor in same-gender marriages that would ultimately recognize that “if a marriage is valid anywhere, then it is valid anywhere.”

It is our opinion, employers must ponder the recent legal decisions regarding same-gender marriage very carefully in terms of the implications it will have on COBRA administration. It would be extremely important to proceed with legal counsel and keep in mind that there are many factual questions that need to be addressed in order to determine the outcome in a variety of scenarios.

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