On May 31, 2012, the Boston-based First U.S. Circuit Court of Appeals ruled that part of the federal Defense of Marriage Act ("DOMA"), which denies federal benefits to same-sex married couples, is unconstitutional and cannot be enforced.
Executive Summary: On May 31, 2012, the Boston-based First U.S. Circuit Court of Appeals ruled that part of the federal Defense of Marriage Act ("DOMA"), which denies federal benefits to same-sex married couples, is unconstitutional and cannot be enforced. See Commonwealth of Massachusetts v. U.S. Dept. of Health and Human Services (1st Cir. May 31, 2012). The First Circuit's three-judge panel placed its court-ordered injunction on hold and will not enforce the holding in anticipation of likely U.S. Supreme Court review of DOMA. The First Circuit's ruling applies only to jurisdictions within the circuit: Maine, New Hampshire, Massachusetts, Rhode Island, and Puerto Rico. Commentators believe the Supreme Court review may occur in 2013.
Background Information on DOMA
DOMA is a federal law that defines marriage as the legal union between one man and one woman. DOMA codifies the non-recognition of same-sex marriage for all federal purposes, including insurance benefits for government employees and the filing of joint tax returns.
President Bill Clinton signed DOMA into law on September 21, 1996, in the wake of a 1993 Hawaii Supreme Court decision declaring that Hawaii's denial of marriage to same-sex couples might be unconstitutional. In reaction to this judgment, Congress passed DOMA, which among other things denies more than 1,000 federal benefits to same-sex married couples. DOMA reserves those benefits for marriages between a man and a woman, and denies those benefits even for individuals in states that recognize same-sex marriage on equal footing with opposite-sex marriage. Benefits denied to same-sex marriage include:
- The ability to file taxes jointly;
- Paid leave of absence to care for a sick or injured spouse;
- Spousal and/or surviving spouse benefits under Social Security;
- Equal family health and pension benefits as federal civilian employees;
- Estate and gift tax exemption; and
- Estate tax portability.
In states like Massachusetts where same-sex marriage is legal, DOMA does not invalidate same-sex marriages; however, the law denies same-sex couples federal benefits enjoyed by opposite-sex couples, such as the ability to file joint federal tax returns and receive survivor benefits.
Similarly, 41 states have a constitutional provision or statute – often called a mini-DOMA – prohibiting state recognition of same-sex spouses or partners. Despite their wide-reaching effects, DOMA and the mini-DOMAs do not prohibit employers from choosing to extend equal benefits to employees' same-sex spouses or partners and their dependent children.
While lower courts in Massachusetts and California have found unconstitutional DOMA's non-recognition of same-sex marriage for federal purposes, the First Circuit's decision is the first time a federal appeals court has ruled on this issue. A similar case is pending before the Ninth Circuit and it is likely that the issue ultimately will be resolved by the U.S. Supreme Court.
The Bottom Line for Employers:
The First Circuit's decision does not significantly change the landscape for employers with regard to federal compliance. The decision is stayed pending Supreme Court review. For the time being, DOMA is still the law of the land. The best practice is for employers to continue to administer their plans in compliance with DOMA until the law is no longer in effect.
The May 31 decision endorsed federalism and recognized individual states' right to decide for themselves whether to allow same-sex marriage under their laws. That stance guarantees that the patchwork of different state approaches will continue, which spells continued uncertainty and complexity for employers – especially for employers that are located near the boundary between states that take differing approaches.
A Supreme Court decision on DOMA could have far-reaching consequences for employers that offer same-sex benefits, especially as to tax issues, given the number of federal laws that affect benefits (which include the Internal Revenue Code, ERISA and HIPAA).
If you have any questions regarding DOMA or other labor or employment related issues, please contact the Ford & Harrison attorney with whom you usually work.