Lawyers get paid to pay attention to Supreme Court decisions. Occasionally, though, there are cases involving hot-button issues that even the general public takes a keen interest in. The Supreme Court’s decision in Obergefell v. Hodges clearly qualifies. 

In that case, the Court held that the 14th Amendment requires states to license marriages between same-sex couples and to recognize a same-sex marriage when the marriage was lawfully licensed and performed out-of-state. 

While the social consequences of this decision are significant, the impact on employers is minimal and means paperwork. As discussed briefly below, the decision will primarily affect the administration of benefits and almost exclusively for employers in those states that previously did not recognize same-sex marriage.

Also see: How the gay marriage ruling affects group benefits

Health and welfare benefits

Here are examples of ways the ruling will impact health and welfare plan administration, all of which call for employers to inquire about whether the Obergefell decision impacted employees’ marital status. 

1. Previously uncovered same sex couples may now be entitled to benefits (e.g., health insurance, voluntary life insurance, etc.) as the Supreme Court may have made them covered spouses under the plan terms.    

2. This will impact COBRA administration because a spouse who is covered by an employee’s health insurance is entitled to COBRA in the event of participant’s termination of employment, or the couple’s divorce or legal separation. Additionally, a spouse who loses coverage under his or her own employer’s plan may be entitled to immediate spousal coverage, notwithstanding normal rules regarding when health coverage can be elected.

3. With respect to FMLA, last year, the Department of Labor issued a Final Rule revising FMLA's definition of “spouse” to ensure that same-sex married couples receive FMLA rights and protections without regard to where they reside. Specifically, the DOL's Final Rule adopted a “place of celebration” rule, meaning that when defining a spouse under the FMLA, it refers “to the other person with whom an individual entered into marriage as defined or recognized under state law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State.” In other words, this broad interpretation was intended to ensure that FMLA coverage existed for same-sex couples even in states where same-sex marriage was banned.

Also see: DOL updates FMLA definition of spouse

This Final Rule had been temporarily enjoined in Texas, Arkansas, Louisiana, and Nebraska by a federal judge who ruled that the DOL did not have the authority to change the definition of “spouse,” and that the change “improperly preempts state law forbidding the recognition of same-sex marriages for the purpose of state-given benefits.” The Supreme Court’s decision in Obergefell paves the way for the Final Rule to go into effect. Employers should update their FMLA policies accordingly.

Retirement plans

Here are examples of ways the ruling will impact retirement plan administration.  Beneficiary designations should be revised accordingly.

1. Qualified joint and survivor and qualified preretirement survivor annuities pension plans are required to provide qualified joint and survivor annuities as the normal form of retirement benefits in the case of married employees. This form can be waived only if both the employee and the spouse consent. If the employee dies before retirement, the plan must generally provide for a qualified preretirement survivor annuity. This does not apply to governmental plans or church plans. 

Also see: Annuities meaningless if savings ‘practically zero’

2. A retirement plan other than a pension plan (e.g., a 401(k), profit-sharing, or stock bonus plan) must either provide the QJSA and QPSA discussed above, or provide that 100% of a participant’s remaining account balance at death must be paid to his or her spouse. This does not apply to governmental plans or church plans. 

3. A qualified retirement plan must provide that if a participant or beneficiary is entitled to roll over a distribution to another retirement plan or individual retirement account, the plan will directly roll over such distribution to the other plan or IRA at the participant or beneficiary’s direction. A non-spousal beneficiary can elect to roll over only to an inherited IRA. A spouse can elect to roll over to his or her own employer plan or IRA.

4. If a participant is married, the spouse must consent to any loan from the plan to the participant. This does not apply to governmental plans or church plans. 

Also see: Is your 401(k) loan program state of the art?

5. An ERISA plan must comply with a qualified domestic relations order.

6. The required minimum distribution rules allow for more flexibility when a beneficiary is the spouse than when the beneficiary is a child or other non-spousal beneficiary.

7. A distributee of a retirement plan who has a spouse must be permitted to elect “married” status for purposes of federal and state income tax withholding.

State tax withholding

Previously unmarried couples are now married and tax withholding forms should be updated. 

While the Obergefell decision is a landmark civil rights case, outside of relooking at the personnel items listed above, the impact on employers is minimal. 

Scott Schneider is an attorney with Fisher & Phillips, a national labor and employment law firm that represents employers. He can be reached at

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