Employers likely will need to continue to pay close attention to how their individual states’ approach to same-sex marriage will affect their employee benefit plans, regardless of President Obama’s newly articulated support for it. The president on May 9 said that he supports same-sex marriage, but also that the states should be able to decide for themselves individually whether same-sex marriage will be legal in their jurisdictions.
The president’s May 9 disclosure is the first time that he — or any U.S. president, for that matter — has openly expressed support for same-sex marriage. Nonetheless, Obama’s announcement is not a significant departure from the stances of his administration on matters related to same-sex partners.
The administration already has refused to enforce and defend the federal Defense of Marriage Act (DOMA), a measure enacted in 1996 that, for purposes of federal law, defines “marriage” as occurring between a man and a woman. DOMA is currently challenged by lawsuits in a number of federal courts. The administration has taken other actions as well to provide what benefits and protections it can to federal employees’ same-sex partners while at the same time not running afoul of DOMA.
There is a wide divergence between individual states’ approach to same-sex marriage, and Obama’s position suggests that will not end anytime soon. Same-sex marriage is legal in six states and the District of Columbia; the governments of two more states have enacted measures making it legal but they are not in effect yet since they will likely be on the November ballot in those states as referenda. Civil unions are legal in another four states. On the other hand, on May 8 North Carolina joined another 29 in making same-sex marriage illegal either by statute or state constitutional amendment.
Continued differences between states have a variety of implications for employers.
Employers Located in a State Where Same-sex Marriage Is Legal
Employers in states where same-sex marriage is legal have to adjust their policies, and documents for purposes of state law and equip themselves to handle the different ways that federal and state tax law treat benefits provided employees’ same-sex spouses.
Employers Located in a State Where Same-sex Marriage Is Not Legal
If an employer is near the boundary of a state where same-sex marriage is legal, it likely will have employees who live in that state. Among them may be employees who have same-sex spouses. Such an employer may find it wise to review its policies, documents and plans and determine how and if it can adjust them, based on the laws of the state where it is based.
Employers in states where same-sex marriage is not legal but that choose nonetheless to provide benefits to employees who have married same-sex spouses in other states must be prepared for the expense that will pose in lost tax deductions to them and the complications that it will cause in benefits administration.
More information is available about same-sex marriage in Thompson Publishing Group’s Domestic Partner Benefits: An Employer’s Guide.
[caption id="attachment_252" align="alignleft" width="300" caption="Photo by flickr user Joe Gratz used under a Creative Commons license."][/caption]
Employers in North Carolina will not face the complications their counterparts in states where same-sex marriage is legal or recognized do, but local and municipal governments that provide domestic partner benefits may have to change their policies. Tar Heel State voters on May 8 approved an amendment to the state constitution that defines marriage as occurring between a man and a woman. The amendment also prohibits civil unions.
The North Carolina Senate and House of Representatives approved the proposed amendment in September 2011, and the voters did so on May 8, with 61 percent voting for it.
The measure amends Article 14 of the North Carolina Constitution by adding Section 6 to it. Section 6 says: “Marriage between one man and one woman is the only domestic legal union that shall be valid or recognized in this state. This section does not prohibit a private party from entering into contracts with another private party; nor does this section prohibit courts from adjudicating the rights of private parties pursuant to such contracts.”
The amendment does not break new ground, since same-sex marriage is already illegal in North Carolina. But the amendment makes that part of the state constitution, making it less likely that position will be overturned. And by saying that “Marriage between one man and one woman is the only domestic legal union that shall be valid or recognized in this state,” the amendment means that civil unions will not be legal in North Carolina.
What this Means
The new amendment to the North Carolina constitution reemphasizes that employers in North Carolina will not have to adjust their policies, plans and documents to accommodate or provide for same-sex spouses.
Employers may, however, offer benefits to the same-sex spouses of employees who enter into those marriages in states where it is legal — the amendment does not prevent that. Employers also may provide benefits that are not taxable to employees’ same-sex spouses. But the amendment does mean that it remains the case that for purposes of state taxation, if an employer in North Carolina provides coverage in a health and welfare plan to the same-sex spouse of an employee, that coverage is taxable income to that employee.
The amendment may have consequences for the governments of communities and counties in North Carolina that provide benefits to the domestic partners of their employees. These include the cities of Asheville, Carrboro, Chapel Hill and Durham, and the counties of Durham, Mecklenburg and Orange.
More information about same-sex marriage is available in Thompson Publishing Group’s Domestic Partner Benefits: An Employer’s Guide.
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