In Technical Release 2013-04, the Employee Benefit Security Administration mirrored the guidance provided by the Internal Revenue Service in Revenue Ruling 2013-17, providing clear guidance defining “spouse” and “marriage” for all purposes under ERISA. As now defined, these terms include same-sex spouses, so long as their marriage is recognized by the state in which the marriage occurred (i.e. adopting a “state of celebration” rule). In addition, the DOL confirmed that “spouse” and “marriage” do not include registered domestic partnerships, civil unions, or other similar formal relationships that may be recognized under state law but are not denominated as marriages.
Given the recent IRS guidance, this guidance by the DOL is not surprising and still doesn’t give employers enough information to update plan documents. However, there are steps employers can begin now regarding the administration of same-sex spousal benefits under ERISA plans:
Company Position - Determine company’s position on offering spousal benefits to same-sex spouses.
- Is recognition of same-sex spouse limited to minimal legal compliance?
- Does the company want to recognize domestic partnerships and civil unions?
- Will proof of marriage be required for everyone?
Proof of Marriage
- Consider a campaign to update records (e.g. beneficiary designations) and gather proof of marriage. Include information on the law change and its effects on benefit plans.
Retirement Plans – Qualified retirement plans are required to provide certain spousal protections (e.g. spousal death benefits).
- Treat same-sex spouses as spouses. Regardless of plan language, a same-sex spouse must receive any mandated spousal benefits. Plan administration should conform to this new definition of spouse immediately.
- Review plans for definition of “spouse” and “marriage”. Amendments may be required once the IRS issues additional guidance (most likely with a retroactive amendment period).
- Issue new SPDs or SMMs. Any amendments made to the plan documents will likely require changes to the summary plan descriptions (SPDs). Participants should be timely advised of the changes (i.e. by issuing a new SPD or a summary of material modifications (SMM)).
- Beneficiary Designations. Beneficiary designations of an employee in a same-sex marriage may need spousal consent to be valid. Employers may need to obtain new spousal consents or notify participants that their current beneficiary elections are not valid without spousal consent.
- Distribution Forms. Distribution and similar forms should be reviewed to determine if updates are necessary.
- A same-sex spouse covered under a group health plan should be offered COBRA in accordance with the rules applicable to a spouse.
- Special enrollment rights which relate to a spouse should be applied to same-sex spouses.