Benefits and Compensation, HR Management & Compliance

What Does Maryland’s Same-sex Marriage Law Mean for Employers?

Employers in Maryland have 10 months to adjust their employee benefit policies, plan documents and plan language regarding dependents before a law legalizing same-sex marriage goes into effect. But that comes with a couple of caveats: (1) the law may be repealed before it even goes into effect; and (2) if it does go into effect, it will be in conflict with federal law and regulation — guaranteeing administrative complexity for employers and plan administrators, since they’ll have to apply divergent tax and other rules to the same benefits.

Gov. Martin O’Malley (D) signed the Civil Marriage Protection Act into law on March 1. The Maryland House of Delegates had passed H.B. 438, its version of the law, on Feb. 17; the Senate passed its version, S.B. 241, six days later. The measure goes into effect on Jan. 1, 2013. 

What the Law Does 

The measure changes language in state law stating that only marriage between a man and a woman is valid in Maryland to provide that “only a marriage between two individuals who are not otherwise prohibited from marrying” is valid in Maryland. It specifies that individuals may not marry their parents, children, siblings or grandparents, grandchildren, stepparents, nephews, nieces, aunts or uncles. 

The new law contains protections for churches and religious groups and officials. Generally, it states that such organizations and individuals: (1) are not required to conduct same-sex marriages in violation of their doctrines; (2) cannot be fined or penalized for refusing to conduct same-sex weddings; and (3) may not be required to provide services, accommodations, advantages, facilities, goods or privileges related to a marriage that is in violation of the entity’s religious beliefs. 

Effective Date Delayed 

The bill originally provided for an effective date of Oct. 1, 2012. However, that date was extended to Jan. 1, 2013. This change is in anticipation of proposals by two state legislators for: (1) a statewide voter referendum; and (2) an amendment to the state constitution that would define marriage as between a man and a woman. 

What This Means  

Employers have the rest of 2012 to prepare to accommodate same-sex spouses in their benefit plans, plan documents and personnel policies — and to prepare to handle the administrative complications of having to apply conflicting state and federal laws. For instance, benefits provided to same-sex spouses will be accorded the same tax breaks under state law as benefits provided to opposite-sex spouses; however, benefits provided to same-sex spouses will be taxable income for purposes of federal law. 

An employer may be tempted to wait to make preparations until after the November elections, since a statewide referendum may repeal the law and the state constitution may be amended to define marriage as between a man and a woman.  However, while such procrastination may be justifiable, it may not be wise. At this point, it is certain that the law will go into effect on Jan. 1, but there isn’t yet a referendum item on the November ballot; nor is a proposed amendment on the ballot. 

Waiting to prepare based on the assumption that these proposals will make it onto the ballot and be passed by voters — therefore repealing the law — could be risky. If these proposals do not secure sufficient support to be on the November ballot — or if they do make it on the ballot and then fail, employers may have to make adjustments in a hurry.

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