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Tuesday, March 26, 2013

Employee Benefits and Same-Sex Couples

The Supreme Court is currently hearing arguments over California's Proposition 8 banning Same-Sex Marriage, and then will immediately turn its attention to a challenge to the Federal Defense of Marriage Act (DOMA).  That law prohibits same-sex couples from receiving the same federal tax and other benefit considerations as traditionally married couples.

For benefits administrators this is severely needed.  I have in my region states where same-sex marriage is legal.  In those states those employees with same-sex partners must be allowed to elect benefits for them under a group health plan.  However DOMA, prohibiting any favorable tax consideration to such couples, denies the employee the pre-tax benefits status of the heterosexual married couples. 

The result of this inconsistency between state and federal law is that the benefits administrators and payroll processors must process deductions and remit payments under the same plan two different ways.

Regardless of how you feel on the marriage issue, the Court needs to align state and federal law so that all similarly situated employees are treated the same under the employer's pre-tax plan.  I know that may make too much sense for our legislators both state and federal, but hey, I can dream.

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