Category: Family Law

The Fundamentals of Guardianship: What Every Guardian Should Know [BOOK]

The Fundamentals of Guardianship: What Every Guardian Should KnowServing as guardian is never simple or easy. Having the responsibility to make major life decisions for another is much more difficult than making decisions for oneself. Recent studies by the National Center for State Courts estimate that between one to two million adults are under court-supervised guardianship. The Administrative Conference of the United States estimates that approximately 75 percent of guardians are family members or friends. A constant refrain in multiple national studies and legislative reports is that once guardians are appointed they receive little instruction on how to carry out their responsibilities and have few resources to guide them.

Fundamentals of Guardianship is the much-needed, basic manual for new guardians that explains those roles and responsibilities. The court orders guardians to make decisions; Fundamentals of Guardianship explains how to make those decisions. It guides the new guardian step-by-step through the process of how to make responsible and ethical decisions, prudently manage another’s resources, avoid conflicts of interest, and involve the person under guardianship in the decision process. Fundamentals of Guardianship is the authoritative resource written by guardians with decades of experience and members of the National Guardianship Association.

Click here to order The Fundamentals of Guardianship: What Every Guardian Should Know

This book will appeal to all who have been appointed as guardian or conservator, whether lawyer, family member, friend, volunteer, or public or private entity, as well as all those who serve vulnerable adults. Included on this list are judges, court administrators, law enforcement officials, adult protective services, social workers, health care providers, case managers, residential care administrators, long-term care ombudsmen, financial institutions, and financial advisors.

 

Same Sex Marriage Defined by IRS

IRS qualified plansJust before Labor Day weekend, the U.S. Department of Treasury and the Internal Revenue Service (IRS) released final regulations amending the definitions of “marriage” and “husband and wife” in the wake of the Supreme Court’s Obergefell v. Hodges decision, which legalized same-sex marriage, and the Windsor v. U.S. decision, which struck down Section 3 of the Defense of Marriage Act (DOMA). The proposed regulations, issued in October 2015, were followed by several comments and a request for a public hearing (at which the requestor did not attend, and at which no one else asked to speak). The comments prompted minor refinements to the proposed rules, with the final regulations providing the following:

  • For federal tax purposes, the terms “spouse,” “husband,” and “wife” are defined as an individual lawfully married to another individual. These terms do not include individuals who have entered into a registered domestic partnership, civil union, or other similar relationship if that relationship is not denominated as marriage under applicable law in the jurisdiction in which the relationship was entered into (regardless of where the couple lives (i.e., domicile)).

  • “Husband and wife” is defined as two individuals lawfully married to each other.

The definitions set forth above apply regardless of the taxpayers’ sexes or genders.

Building off of Revenue Ruling 2013-17, which adopted the “place of celebration” rule over the “place of domicile” rule for purposes of determining the validity of a same-sex marriage, the final regulations further provide:

  • A marriage between two individuals entered into in, and recognized by, any state, possession, or territory of the United States will be treated as a marriage for federal tax purposes (regardless of the married couple’s place of domicile). This standard applies regardless of the term used in the Internal Revenue Code.

  • Foreign marriages are discussed separately from domestic marriages to ensure clarity on how these foreign marriages are to be treated. Under the foreign marriage rule, two individuals entering into a relationship denominated as marriage under the laws of a foreign jurisdiction are married for federal tax purposes if the relationship would be recognized as marriage under the laws of at least one state, possession, or territory of the United States. Under this construction, it is sufficient for a couple who is married outside the United States to be treated as married for federal tax purposes in the United States if a single jurisdiction would recognize them as married; thus, a review of all pertinent laws of a state or territory within the United States will not be required.

Notably, the IRS declined to adopt certain suggestions submitted by commentators, including:

  • That the regulations specifically reference “same-sex marriage” such that they would be gender-neutral and to avoid any potential issues of interpretation. The IRS reasoned that the regulations were clear and did not present any potential for confusion; further, adopting this comment was deemed to potentially undermine the goal of eliminating distinctions in federal tax law based on gender.

  • That the regulations clarify that common-law marriages of same-sex couples will be recognized for federal tax purposes. While the statutes of certain states recognizing common law marriages only do so for opposite-sex couples, the Treasury and IRS opined that the Supreme Court’s holdings, coupled with prior IRS guidance, make clear that common law marriages are valid, lawful marriages for federal tax purposes. While the agencies did acknowledge that some states had laws “on the books” prohibiting same-sex marriage (including some states that allow common law marriage), since the government was “unaware” of any state enforcing those statutes or otherwise prohibiting same-sex couples from entering into common law marriages, the Treasury and IRS declined to make any further clarifications on this issue.

While employers who sponsor benefit plans should have already modified their plans and procedures to come into compliance with Obergefell, Windsor, and Revenue Ruling 2013-17, the finalization of these regulations brings refinements to the rules that should be captured by those working with benefit plans. For example, how are foreign marriages treated for imputation of income in a group health plan setting? In addition, how are same-sex common law marriages reviewed under the qualified plan joint and survivor rules? A careful review of the final regulations’ definitions as compared to current plan documents and administrative practices is recommended.

Written by Carrie E. Brynes and Jorge M. Leon of Michael Best & Friedrich LLP. 

The Supreme Court Rules in Favor of Same-Sex Marriage: Employer Next Steps

What should employers be thinking about in the benefits arena now that the US Supreme Court has ruled in Obergefell v. Hodges that all states must issue marriage licenses to same-sex couples and fully recognize same-sex marriages lawfully performed out of state?

We suggest that employers consider whether the following plan design changes, health plan amendments, and/or administrative modifications are necessary:

  • Review employee benefit plans’ definition of “spouse” and consider whether the Court’s decision will affect the application of the definition (e.g., if the plan refers to “spouse” by reference to state laws affected or superseded by the Obergefell decision). Qualified pension and 401(k) plans generally conformed their definitions of spouse to include same-sex spouses post-Windsor to comply with Internal Revenue Code provisions that protect spousal rights in such plans, but health and welfare plans may not have been so conformed.

  • Communicate any changes in the definition of spouse or eligibility for benefits to employees and beneficiaries, as applicable.

  • Update plan administration and tax reporting to ensure that employees are not treated as receiving imputed income under state tax law for any same-sex spouses who are covered by their employer-sponsored health and welfare plans (to the extent that coverage for opposite-sex spouses would otherwise be excluded from income).

  • If an employer currently covers unmarried domestic partners under its benefit plans, it may want to consider whether to eliminate coverage for such domestic partners on a prospective basis (and therefore only allow legally recognized spouses to have coverage). Employers that make that type of change also will need to determine the timing and communication of such a change.

  • Employers with benefit plans that treat same-sex spouses differently than opposite-sex spouses should consider whether to maintain that distinction. Even though nothing in Obergefell expressly compels employers to provide the same benefits to same-sex and opposite-sex spouses, and self-insured Employee Retirement Income Security Act (ERISA) health and welfare plans are not subject to state and municipal sexual orientation discrimination prohibitions, we believe these types of plan designs are likely to be challenged.

ARTICLE BY Andy R. Anderson & Lindsay M. Goodman of Morgan, Lewis & Bockius LLP

Copyright © 2015 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

Same-Sex Marriage Equality: What Employers Need to Know After Obergefell

Same-sex couples have a Constitutional right to marry and have their marriages recognized nationwide. In a 5-to-4 decision, the U.S. Supreme Court concluded that states are required to license a marriage between two people of the same sex under the Fourteenth Amendment. Obergefell v. Hodges, 576 U.S. ___ (2015). As a result, same-sex couples may now legally marry in all states. This ruling has massive implications, as rights and benefits extended to opposite-sex spouses will be available to same-sex spouses across the United States.

Marriage Equality Prevails

In an opinion authored by Justice Kennedy, the Court recognized that same-sex couples were not seeking to devalue the institution of marriage, but instead sought for themselves the respect, rights, and responsibilities that accompany a legal marriage. The Court held that under both the Due Process and the Equal Protection Clauses of the Fourteenth Amendment, same-sex couples have the fundamental right to marry.

The Due Process Clause provides that no state shall “deprive any person of life, liberty, or property, without due process of law.” The Court determined that same-sex couples may exercise the right to marry under this Clause for four reasons:

  1. the right to make the personal choice of who to marry is inherent in the right of individual autonomy; choices concerning family relationships, whether to have children, and whether to use contraception are protected intimate decisions that extend to all persons, regardless of sexual orientation;
  2. the right of couples to commit themselves to each other and enjoy intimate association extends to same-sex couples just as it does to opposite-sex couples;
  3. protecting same-sex marriage safeguards children and families because without the recognition and stability of marriage, children of same-sex couples suffer harm and humiliation as well as material costs because of the stigma attached to “knowing their families are somehow lesser” than families of opposite-sex couples; and
  4. marriage is a “keystone” of our country’s social order and national community; governmental recognition, rights, benefits and responsibilities depend in many ways on marital status and same-sex couples should not be denied the benefits that accompany marriage.

The Court also ruled that the right of same-sex couples to marry is a liberty protected by the Fourteenth Amendment’s guarantee of equal protection of the laws. The Court admonished that state laws that ban same-sex marriage deny same-sex couples the benefits afforded to opposite-sex couples, disparage same-sex couples’ choices, and diminish their personhood. The Equal Protection Clause prohibits such “unjustified infringement of the fundamental right to marry.”

Recognition of Marriages Performed in Other States

The Court also ruled that a state may not refuse to recognize the same-sex marriages lawfully performed in another state. The result is that any lawful marriage that has already taken place in the United States, whether same- or opposite-sex, must be recognized in all 50 states.

What This Means for Employers

Multi-state employers that have been dealing with state-specific policies that were dependent on state-law recognition of same-sex marriages may now want to implement a uniform policy that applies to all locations. Here are steps you should consider in light of the legalization of same-sex marriages nationwide:

  • FMLA leave: Same-sex spouses will be deemed spouses under the Family and Medical Leave Act (FMLA) no matter where the marriage took place or where the employee resides. This means that you need to permit eligible employees to take FMLA leave to care for their same-sex spouse with a serious health condition, for qualifying exigency leave if the spouse is being deployed and other qualifying reasons. Update your FMLA policies, forms and practices to permit this leave.
  • Bereavement and other leaves: If you offer bereavement leave for the death of a spouse or in-laws, you should update your policy to reflect that this leave includes same-sex spouses and relatives of the same-sex spouse. If you offer any other leaves that define immediate family or extend to familial situations, such as non-FMLA medical leave or military leave, update those definitions as well.
  • Marital status discrimination: If you operate in states that prohibit discrimination based on an employee’s or applicant’s marital status, you will be prohibited from discriminating based on same-sex marriages.
  • Emergency contacts and beneficiaries: Employees with a same-sex spouse may want to update their emergency contact or beneficiary information listed on group life insurance or retirement plans. Be prepared to administer these changes.
  • Employee benefits: Group insurance, retirement and other employee benefit plans will need to be reviewed and updated. Be certain to consult your benefits attorney and plan administrators for advice on required changes.
  • W-4 Forms and tax updates: In light of potential income tax implications for newly recognized same-sex spouses, some employees may want to change their tax withholding information. Be prepared to update W-4 and state withholding amounts upon request.

These and additional policies and procedures impacted by the Court’s ruling may require that you update your employee handbook, policies on your intranet, plan documents, forms, beneficiary designations and other personnel documents. Be sure to notify and train your human resources professionals and supervisors on all changes.

The Court’s landmark decision grants “equal dignity in the eyes of the law” to same-sex couples. Take this opportunity to review your employment policies and practices so your company does the same.

ARTICLE BY Sarah R. Wisor of Holland & Hart LLP

Copyright Holland & Hart LLP 1995-2015.

U.S. Supreme Court Finds a Constitutional Right to Same-Sex Marriage: Implications for Employee Benefit Plan Sponsors

On June 26, 2015, the U.S. Supreme Court issued a historic decision in Obergefell v. Hodges, holding that the Fourteenth Amendment’s Due Process and Equal Protection Clauses require states to allow same-sex marriage and to recognize same-sex marriages performed in other states.  The decision comes exactly two years to the day from the Court’s decision in Windsor defining “spouse” to include same-sex spouses for purposes of federal law.

As a result of the Court’s decision, the existing 14 state bans on same-sex marriage are invalid, and same-sex spouses are entitled to all of the rights extended to opposite-sex spouses under both federal and state law.

From an employee benefits perspective, it appears thatObergefell may most significantly impact sponsors ofinsured health and welfare plans in states that currently ban same-sex marriage.  Employers and other plan sponsors in those states will be required to offer insured benefits to same-sex spouses because state insurance law will require that the term “spouse” be interpreted to include them.  Based on government guidance issued following the Windsor decision, it seems unlikely that the decision would have retroactive effect, though such claims are possible.

For sponsors of self-insured benefit plans, a question may exist as to whether Obergefell directly impacts a sponsor’s decision not to provide health coverage to same-sex spouses (because state law does not apply to such plans).  However, it would appear that there would be heightened risks under federal and state discrimination laws for plans that define “spouse” in a manner that is inconsistent with the federal and state definitions, particularly since the Court held that marriage is a fundamental right under the Constitution, and an ERISA preemption defense likely would be weaker in this new climate.

It is also noteworthy that, as a result of the Court’s decision, there will no longer be imputed income for state tax purposes with respect to employer-provided health coverage for same-sex spouses, allowing for consistent administration in all states in which an employer operates.  Since Windsor, there have not been federal tax consequences with respect to these benefits, but some states continued to impute income for state tax purposes.

Finally, with respect to federally-regulated benefits such as qualified retirement plans and Code Section 125 benefits (for example, flexible spending accounts), the Court’s decision does not necessarily warrant any change, since those plans have been required, since Windsor, to recognize same-sex spouses.  Of course, plan language should be reviewed for consistency with the decision, and employers in some states may find that there are new spouses seeking benefits under those plans.  There also will be some administrative and enrollment issues, similar to when Windsor was decided.

Employers, particularly those operating in states that currently ban same-sex marriage, should review their benefit plans and policies and consider whether any changes need to be made in light of Obergefell.  Some employers may also reconsider their domestic partner benefits programs now that same-sex couples have the right to marry and have their marriage recognized across the entire country.

We expect that there will be guidance from the U.S. Department of Labor and the Internal Revenue Service regarding the employee benefit plan issues that emanate from Obergefell, so stay tuned.

ARTICLE BY Roberta K Chevlowe of Proskauer Rose LLP

© 2015 Proskauer Rose LLP.

Same-Sex Divorces in New Jersey

On September 27, 2013, in a landmark case for the state, Garden State Equality v. Dow, New Jersey Superior Court Judge Mary Jacobsonruled that the state must allow same-sex couples to marry. While Governor Chris Christie immediately stated that his administration would be appealing the ruling, he eventually withdrew his appeal, and the first same-sex marriages in the state were performed just after midnight on October 21, 2013. Prior to this date, same-sex couples were only allowed to enter into civil unions in the state, which were not recognized by the federal government.

Same-sex couples in New Jersey now have the same rights as opposite-sex couples. These rights are most frequently recognized during the divorce process; namely with regards to the equitable distribution of assets acquired during the marriage and alimony that may be paid to the dependent spouse. Both of these concepts are dealt with by the court and determined through application of a variety of factors. One of the most important factors at issue with same-sex divorces is the length of the marriage. Obviously, same-sex marriages are likely to be shorter in duration than heterosexual marriages simply because same-sex couples were not legally allowed to marry until almost two years ago, and were only permitted to enter into civil unions since 2007 when The Civil Union Act was signed into law by then-Governor Jon Corzine.

However, because same-sex marriage is a relatively new concept in New Jersey, there have been significantly fewer same-sex divorces in the state and, therefore, case law addressing the award of alimony and equitable distribution in same-sex divorces are in infancy and not yet developed.

N.J.S.A. 2A:34-23(b) provides for different forms of alimony and requires the court to consider a variety of factors, one of which is the duration of the marriage, in awarding alimony to one party. However, this is the exact scenario in which same-sex couples are more disadvantaged then heterosexual couples because they only received the right to marry.

Consider a hypothetical situation in which a couple is divorcing in 2015. They have been together as if they were a married couple since 2008, but were only officially married in 2014. How should the court address the “length” of the couple’s marriage? In reality, they have only been married for a year, but the relationship itself has lasted much longer. If the court took the “length of marriage” factor literally, construing it from the day of actual marriage (one year ago), the dependent spouse could be awarded a comparatively minimal amount of alimony, considering the relationship has existed longer than just one year. The dependent spouse could potentially argue that they should be awarded a greater alimony award because the court should consider the fact that they were not legally allowed to get married and this is why the marriage is technically so short. Again, same-sex marriage and thus, same-sex divorce, is in its infancy in the Garden State, so it is impossible to know precisely how a court will rule in a scenario like this.

Another issue is cohabitation. Same-sex couples in New Jersey have had no other option but to live together without legal recognition. While there have not been cases that have addressed pre-marital cohabitation in regards to same-sex couples, this issue has been addressed for the purposes of alimony as it relates to heterosexual couples. In McGee v. McGee, the New Jersey Superior Court, Appellate Division held that the “extent of actual economic dependency, not one’s status as a spouse, must determine the duration of support.” Therefore, because pre-marital cohabitation may be considered for the purposes of alimony in an opposite-sex divorce, it is likely that such cohabitation, especially for individuals who could not get married, will be a factor in same-sex divorces.

The argument regarding the “length” of a same-sex marriage in New Jersey is further complicated by the fact that civil unions have existed in New Jersey since 2007. In Lewis v. Harris, the New Jersey Supreme Court held that the State must provide the same rights and benefits of marriage to committed same-sex couples that were given to opposite-sex couples. The reason why this complicates the equitable distribution of assets and the award of alimony in same-sex marriages is because it weakens the dependent spouse’s argument that the marriage would have been longer had New Jersey permitted same-sex marriage to be performed. The supporting spouse could argue that marriage-like status (civil union) was available to the couple and they did not take advantage of the civil union because they did not have a desire to and, therefore, the “length of marriage” should be calculated from the date of the actual marriage, rather than the beginning of the relationship.

Just like the calculation of alimony, the equitable distribution of assets attained while in a same-sex relationship is also analyzed considering a factor of “length of marriage.”

Overall, alimony and equitable distribution in same-sex marriages is new territory in New Jersey. Because there is no case law on point explaining whether same-sex marriages will be calculated based on the length of the relationship, or the definite day of marriage, careful review of the specific facts of each case will be necessary to accomplish and fair and reasonable outcome for the divorcing parties. That is why it is recommended that you speak with an attorney to discuss the specifics of your case.

ARTICLE BY Megan E. Smith of Stark & Stark
COPYRIGHT © 2015, STARK & STARK

DOL Issues Final Rule Amending FMLA Definition of “Spouse” to Include Same-Sex Marriages

The U.S. Department of Labor has issued a final rule amending the regulatory definition of “spouse” under the Family and Medical Leave Act (“FMLA”).  We earlier reported on the DOL’s proposed rule to this effect, which is now final and will become effective on March 27, 2015.

The amendment changes the definition of “spouse” to include individuals in same-sex marriages if the marriage was valid in the place it was entered into regardless of where they live.  Before the new rule was issued, the FMLA and its accompanying regulations defined “spouse” as a husband or wife as recognized under the laws of the state in which the employee resides.  The new definition of spouse instead looks to the law of the jurisdiction in which the marriage was entered into and expressly encompasses same-sex married couples.  The final rule thus adopts a “place of celebration” rule rather than a “state of residence” rule for the definition of “spouse” under the FMLA.

According to the DOL, the amended regulatory definition of spouse permits “eligible employees in legal same-sex marriages [to] be able to take FMLA leave to care for their spouse or family member, regardless of where they live.”  The DOL has also suggested that the new rule will reduce the administrative burden on multi-state employers, who no longer have to consider an employee’s state of residence and the laws of that state in determining the employee’s eligibility for FMLA leave.

The new rule was prompted by the United States Supreme Court decision in United States v. Windsor, which found unconstitutional those provisions of the Defense of Marriage Act that prohibited federal recognition of same-sex marriages.

Some of the other features of the new rule include:

  • The new rule encompasses an employee in a same-sex marriage entered into abroad as long as the marriage is valid in the place it was entered into and could have been entered into in at least one state in the United States.

  • The new rule encompasses employees in a common law marriage as long as the common law marriage became valid in a state that recognizes such common law marriage.

  • An employee in a legal same-sex marriage can now take FMLA leave to care for his or her stepchild whereas before, an employee in a legal same-sex marriage could only take FMLA leave to care for his or her stepchild for whom the employee stood in loco parentis.

  • Similarly, an employee can now take FMLA to care for his stepparent who is the employee’s parent’s same-sex spouse, even if the stepparent never stood in loco parentisto the employee.

ARTICLE BY

Shira Forman
Sheppard, Mullin, Richter & Hampton LLP

Same Sex Marriage and Tax Law…A Rough Landscape

HMB Chartered B

Another tax season is upon us, and the hardships of complying with another annual tax return filing requirement affects most of us. However, for same sex couples, the hardships are further exacerbated by the different tax laws at the state level. At the time this post is published, same-sex marriage bans remain in place in Alabama, Arkansas, Georgia, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee and Texas. These bans and various appeals cause uncertainty for some same sex couples with regard to their filing status. Fortunately, though, clarity (we hope) is just around the corner as the U.S. Supreme Court has finally agreed to take up the matter of same-sex marriage in April 2015.

ARTICLE BY

Joseph Tamburello
OF
Horwood Marcus & Berk Chartered

Oregon’s Same-Sex Marriage Ban Unconstitutional, Judge Rules

Jackson Lewis Law firm

 

Oregon’s prohibition on same-sex marriage conflicts with the United States Constitution’s guarantee of equal protection, newly appointed U.S. District Court Judge Michael McShane has held in a case filed on behalf of four couples in Multnomah County. Geiger v. Kitzhaber, No. 6:13-cv-01834-MC (May 19, 2014).

Judge McShane explained the measure discriminates against same-sex couples. “The state’s marriage laws unjustifiably treat same-gender couples differently than opposite-gender couples. The laws assess a couple’s fitness for civil marriage based on their sexual orientation: opposite-gender couples pass; same-gender couples do not. No legitimate state purpose justifies the preclusion of gay and lesbian couples from civil marriage.”

A state Constitutional amendment, enacted pursuant to a 2004 ballot initiative organized and sponsored by the Defense of Marriage Coalition, had prohibited same-sex marriage, stating that only “marriage between one man and one woman shall be valid or legally recognized as a marriage.” This initiative and the subsequent Constitutional amendment were in response to the Multnomah County commissioner’s decision to issue marriage licenses to same-sex couples. During the Geiger litigation, Oregon’s Attorney General stated she found it impossible to legally defend the ban because “per- forming same-sex marriages in Oregon would have no adverse effect on existing marriages, and that sexual orientation does not determine an individual’s capacity to establish a loving and enduring relation- ship.” With Geiger, and the U.S. Supreme Court’s 2013 decision in United States v. Windsor invalidating the federal Defense of Marriage Act, same-sex marriage is valid under Oregon state and federal law.

Further, although Oregon enacted a domestic partnership law in 2008, the Family Fairness Act, granting domestic partners similar rights and privileges to those enjoyed by married spouses, the Legislature acknowledged domestic partnerships did not reach the magnitude of rights inherent in the definition of marriage. For example, same-sex couples in Oregon were not entitled to the rights or benefits under the federal Family and Medical Leave Act because Department of Labor guidance recognizes same-sex marriage only if valid under the employee’s state of residence. The DOL, however, has proposed a rule expanding the term “spouse” and, if implemented, will recognize same-sex marriages when recognized in the couple’s state of residence or if performed in a state recognizing same-sex marriage. According to the Secretary of Labor, “The basic promise of the FMLA is that no one should have to choose between succeeding at work and being a loving family caregiver. Under the proposed revisions, the FMLA will be applied to all families equally, enabling individuals in same-sex marriages to fully exercise their rights and fulfill their responsibilities to their families.” No changes have been proposed, however, for purposes of the Employment Retirement Income and Security Act (“ERISA”), the federal law governing employee benefit plans. The DOL counsels employers that, for purposes of ERISA, same-sex marriage should be recognized if valid in the state it is performed.

While Geiger will simplify the legal landscape, employers should review policies, procedures, and benefit plans closely to ensure that same-sex spouses are treated equally in all respects. In addition, Oregon law further prevents employment discrimination based on sexual orientation and family status. Requiring same-sex couples to “prove their status” or take other similar measures that are not required of opposite-sex couples may increase the risk of potential litigation under these laws.

Mei Fung So contributed to this article. 

ARTICLE BY

Scott Oborne
Bryan P. O’Connor
Roger S. Kaplan
 
OF
Jackson Lewis P.C.

Wisconsin Federal Court Recognizes Same-Sex Marriage: How Does This Affect the Administration of an Employer’s Employee Benefits?

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On Friday, June 6, 2014, Judge Crabb of the U.S. District Court for the Western District of Wisconsin issued a decision finding that Wisconsin’s constitutional amendment recognizing marriages only between men and women violates the Equal Protection Clause of the U.S. Constitution.

Unlike several other federal judges who have considered the issue, Judge Crabb did not make her ruling immediately effective. Instead the Court asked the plaintiffs’ lawyers in the case to help her fashion an injunction to implement her ruling. The plaintiffs have until June 16, 2014, to submit this proposal. The State asked for clarification on the June 6, 2014 ruling and requested that the court stay its decision until it made a final decision on the scope of the injunctive relief. On June 9, 2014, the court denied the State’s motion. In response, the State appealed Judge Crabb’s decision to the U.S. Court of Appeals for the Seventh Circuit in Chicago and requested an immediate stay of Judge Crabb’s order. The Seventh Circuit has solicited arguments from the parties to determine whether it has jurisdiction of the matter.

In response to Judge Crabb’s decision, many of the State’s counties have begun issuing marriage licenses to same-sex couples in the state. Others have declined to do so and have, instead, sought guidance from counsel or the Attorney General.

Addressing the Change

Judge Crabb’s decision, and issuance of Wisconsin same-sex marriage licenses, has injected some uncertainty into benefit plan administration in Wisconsin. Based upon the state of the prior law, it is likely that a Wisconsin employer will have more employees with domestic partners than employees with same-sex spouses through legal marriages formed elsewhere. Nevertheless, same-sex benefits are certainly an evolving issue for employers.

Family and Medical Leave

Registered and unregistered domestic partners were already covered under the Wisconsin Family and Medical Leave Act. Because an unregistered domestic partnership does not require a formal filing with a county clerk, it appears that the state law in this context is relatively unaffected.

On the other hand, the federal FMLA is substantially affected. The definition of spouse under the federal regulations requires that the marriage must be recognized by the state of residence. Most FMLA policies do not distinguish between same-sex and opposite-sex partners. Consequently, if Judge Crabb’s decision stands, requests for FMLA leave relating to same-sex spouses must be recognized under both federal and Wisconsin law if the leave is otherwise appropriate under the law.

Until the ramifications of the injunctive language are known, employers should pay particular attention to the language of their FMLA policies before making any determination about FMLA requests. Depending on how the courts ultimately rule, an employer’s FMLA policy may or may not require amendment. Regardless, if an employee asks about leave for a same-sex spouse, legal counsel should be consulted.

Benefits

The status of the law will remain uncertain until Judge Crabb makes a decision regarding whether to issue an injunction and the form such an order would take. If an injunction is issued and then stands following the anticipated appeal, employers who employ employees who have a same-sex spouse would no longer impute Wisconsin income tax for health coverage, and would otherwise recognize such spouse for all legal purposes. Because of the uncertainty in the current climate, employers should consider whether to continue imputing income for benefits provided to same-sex spouses until such time as transitional guidance is issued by the Wisconsin Department of Revenue on this issue.

Nothing has changed as it relates to unmarried domestic partners—these individuals are still subject to imputed income where the individual obtains coverage on behalf of his or her domestic partner.

Because employee benefits rules are largely governed by federal law, many same-sex marriage changes in employee benefits have been observed already since the U.S. Supreme Court’s Windsor decision of last year. If the Judge Crabb ruling stands, the most significant change for Wisconsin employers will likely pertain to Wisconsin tax treatment of family health coverage.

What should employers do in response?

  • Account for those same-sex couples who may have been married in a state that permitted same-sex marriage or who are newly married in Wisconsin following Judge Crabb’s decision;
  • Examine if modification of FMLA policy/forms is warranted based upon the changes; and
  • Examine if modification to benefit plan materials may be necessary.
Article By:

Charles P. Stevens
Kirk A. Pelikan
Of:
Michael Best & Friedrich LLP