On June 26, 2013, the United States Supreme Court issued two opinions on cases dealing with same-sex marriage. In United States v. Windsor, the Supreme Court declared Section 3 of the Defense of Marriage Act ("DOMA") unconstitutional. In Hollingsworth v. Perry, the Supreme Court held that the plaintiffs lacked standing, which ultimately results in the striking down of Proposition 8 in California by upholding the earlier federal district court decision. For more information on these cases and for a list of action items for employers, please refer to “Same-Sex Marriage, DOMA and Employee Benefits,” published in our last Compensation & Benefits Quarterly Update. Implications of the Supreme Court's Decisions The result of today’s decisions is full marriage equality (state sanctioned and federal recognition) for same-sex marriage in the following states: California Connecticut Delaware Iowa Maine Maryland Massachusetts Minnesota New Hampshire New York Rhode Island Vermont Washington Washington, DC Because the Supreme Court did not address Section 2 of DOMA, which provides that no state shall be required to recognize as legal in that state a same-sex marriage in another state, federal benefits from marriage will, for now, presumably only be awardable for those same-sex married couples who reside in one of the above states or a state which, although it does not provide for same-sex marriage, does recognize same-sex marriages performed in other jurisdictions. Therefore, depending upon state law, an individual who is legally married in New York, and moves, may or may not have his or her marriage recognized in his or her new state of residence. For example, Texas does not currently recognize same-sex marriage; however, while New Mexico does not currently permit same-sex marriages, it would recognize as legal same-sex marriages performed in the above states. Accordingly, same-sex married couples living in New Mexico would have the same benefits as living in one of the states listed above. Please note that the effective dates for marriage equality in the states listed above vary, and full marriage equality in some of the states listed above will not be effective until later this summer (Minnesota and Rhode Island's laws become effective in August, and it is anticipated same-sex marriages will resume in California in July). Moreover, the effective date of today's Supreme Court ruling and the details regarding how employers will be required to implement the requisite changes to pension and welfare plans have yet to be determined. Changes That Will Affect Employers We will continue to provide updates as guidance is issued by the relevant governmental agencies; however, here are some of the basic changes that will affect employers. Employees who pay for coverage for a same-sex spouse under the group health plan no longer have imputed income on the premiums paid by the employer, and employees may pay for coverage pre-tax. Same-sex spouses are eligible for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA") and special enrollment rights under the Health Insurance Portability and Accountability Act ("HIPAA"). Employees with a same-sex spouse are able to cover their spouse’s medical expenses under health care flexible spending accounts, health savings accounts and health reimbursement accounts. A change in status of a same-sex spouse is a change in status under cafeteria plans/section 125 plans. In defined benefit retirement plans, same-sex spouses are entitled to qualified joint and survivor annuities and qualified pre-retirement survivor annuities. In all retirement plans, consent of the same-sex spouse is required to elect an optional form of benefit or to designate a beneficiary other than the same-sex spouse. In 401(k) plans, a financial hardship pertaining to a same-sex spouse qualifies as a hardship for purposes of hardship distributions. Qualified domestic relations orders ("QDROs") can cover a same-sex spouse. An employee is entitled to take an unpaid leave of absence under the Family and Medical Leave Act ("FMLA") to care for a same-sex spouse. Please do not hesitate to contact any member of the Baker & McKenzie Executive Compensation and Employee Benefits Group with questions.