A Minute With...

Sean Anderson, expert on employee benefit policies

10/1/2013  8:00 am

The Department of Labor announced last month that for purposes of federal law relating to employee benefit plans, the terms “spouse” and “marriage” would be interpreted to include same-sex couples who are legally married under the law of any state, even if they live in a state that does not recognize same-sex marriage. The announcement was part of the federal government’s ongoing response to the Supreme Court’s decision in United States v. Windsor, which struck down section 3 of the Defense of Marriage Act.

University of Illinois law professor Sean M. Anderson, an expert in employee benefit policy and regulation, spoke with News Bureau business and law editor Phil Ciciora about the impact of the decision.

What does this new Labor Department announcement mean for gay couples in Illinois?

image of professor sean andersonFirst, it’s important to understand what the department’s announcement does not mean.

It doesn’t mean that employers – in Illinois, or anywhere else – are required to provide any particular employee benefit, such as health care coverage, for same-sex spouses. For the most part, employers get to choose whether to provide benefits, and what kinds.

The Windsor decision itself meant that a same-sex couple that got married in, say, Massachusetts, and then kept living in that state, would be treated as married for purposes of federal law. The Department of Labor announcement, in combination with the Internal Revenue Service’s similar policy announcement in August, means that that same couple would continue to be treated as married under federal employee benefits law, even if they live in a state, like Illinois, that doesn’t allow same-sex marriage.

What are some examples of how the announcement can help same-sex couples?

Here’s one: Federal law has long protected opposite-sex spouses by requiring some types of pension plans to pay benefits out so that if the spouse who participated in the pension plan dies, the surviving spouse continues to receive payments. If the couple wants the benefits in some other form, such as a lump-sum payment, then the nonparticipant spouse has to consent to that change in writing.

Now, those protections extend to same-sex spouses too, even if they live in a state that doesn’t recognize same-sex marriage.

Another example: If one spouse dies with money in a 401(k)-type plan, the other spouse gets to “roll over” that money into their own plan, or an individual retirement account, without any adverse tax consequences. With the new Labor Department and IRS policies, married same-sex couples get the same treatment, no matter where they live.
There are other examples, too, including rights to buy continued health care coverage under COBRA after the loss of a job, a divorce or other events.

One huge advantage, which is more attributable to the IRS announcement in August, is that a same-sex spouse who is covered under the other spouse’s health care plan can now treat the benefits as tax-exempt, the way opposite-sex couples always have – and, again, that’s true regardless of whether the couple lives in a state where same-sex marriage is legal.

Critics of the policy have noted that it would be easy to imagine a legal challenge. Do you foresee any potential litigation?

It’s possible, but I don’t see a lot of potential for serious challenges. Employers’ groups, which would be one potential source of challenges, have reacted very positively; they are happy to have clear guidance on what federal law requires, as opposed to letting the federal-law status of same-sex marriages vary according to which state the couple lives in.

What other kind of effects will United States v. Windsor have on federal law?

The effects have already been pretty far-reaching, and that is going to continue as federal agencies keep issuing guidance documents, amending regulations, etc. The Windsor case itself was about estate taxes, and it was a big change for same-sex married couples with significant estates. In addition to the IRS and Labor Department announcements, we’ve seen changes to things like military benefits for spouses. We’re also starting to see the beginnings of change in the Social Security system.

One additional change that’s pretty likely to come soon, also from the Department of Labor, is a change so that same-sex spouses will be entitled to leave under the Family Medical Leave Act to tend to their spouses’ serious medical conditions, even if they live in a state without same-sex marriage.

Another big change that’s not so much about federal law is a likely increase, maybe a huge one, in so-called “marriage tourism.” With these changes in federal law, a same-sex couple living in Illinois has a much bigger incentive to go get married in one of the states that allow it. I wouldn’t be surprised if some of those states, recognizing the economic opportunities, relaxed or eliminated residency requirements and other barriers to marriage tourism.


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