Employers should review their benefit plans following the Iowa Supreme Court's decision on same-sex marriage.

Employers throughout the country may soon experience an increase in requests for spousal benefit coverage from employees who have legally married their same-sex partners now that same-sex marriage has been legalized in Iowa and a bill to do so is pending in Vermont.

The Iowa Supreme Court Ruling

On April 3, 2009, Iowa became the third state (after Massachusetts and Connecticut) to legalize same-sex marriage when the Iowa Supreme Court unanimously ruled that a state law limiting marriage to opposite-sex couples was unconstitutional because it violates the equal protection clause of the state constitution. Same-sex marriages could begin in Iowa as early as April 24, 2009, when the court’s decision becomes effective. Although there have already been some calls for an amendment to the Iowa constitution that would limit marriage to opposite-sex couples, Iowa law requires constitutional amendments to be approved by both houses of the state legislature in two consecutive sessions before the amendment can be sent to voters for ultimate approval. As a result, unless Iowa legislators take action in the next few weeks to introduce such an amendment, the earliest that an amendment to the state constitution could be in place is 2012.

The ruling is likely to lead to same-sex marriages performed not only for citizens of Iowa, but for out-of-state residents as well. Because Iowa does not require proof of state residency in order to obtain a marriage license, the court’s decision will permit same-sex couples from other states to legally marry in Iowa. Whether such marriages will be invalid in the same-sex couple’s state of residence depends on local law; New York will recognize such marriages, but many other states will not.

Pending Vermont Legislation

Vermont is also in the midst of the debate over same-sex marriage. Although a bill to legalize same-sex marriage was approved by both houses of the Vermont legislature, Governor Jim Douglas has promised to veto the measure. To override the governor’s veto, the bill would need to be supported by a two-thirds majority of both the Vermont Senate and House of Representatives. The Vermont Senate, which approved the bill in a 26-4 vote, appears certain to have the votes needed to override the governor’s veto. However, the Vermont House of Representatives’ 95-52 vote to approve the bill leaves some doubt that the additional votes needed to obtain the two-thirds majority will be obtained. If passed, the bill will permit same-sex marriages to be performed beginning September 1, 2009.

Vermont was the first state to recognize “civil unions” that grant same-sex partners the same rights as opposite-sex spouses, but without the title of “marriage.” Since Vermont’s civil union law was passed in 2000, similar laws granting spousal equivalent rights to same-sex partners have been passed in California, the District of Columbia, New Hampshire, New Jersey and Oregon.

What Employers Should Do Now

In order to respond to requests for spousal benefits by same-sex couples, employers should review their current benefit plans to identify those benefits that may be extended to an employee’s same-sex spouse in light of the conflicting definitions of marriage under federal and state laws. Employers may also want to consider implementing or amending current domestic partner benefits policies in order to provide certain benefits to their employees’ newly recognized same-sex spouses. In addition, employers will need to understand the special tax consequences of offering certain benefits to same-sex spouses.