by Scott Evans
On June 26, the U.S. Supreme Court issued a pair of decisions favorable to the gay rights movement. In United States v. Windsor, the Court ruled that same-sex married couples are entitled to federal benefits, and by declining to decide a California case, the Court effectively allowed same-sex marriage in the state. 
In the Windsor case, the Supreme Court held that Section 3 of the federal Defense of Marriage Act (DOMA), which defined marriage as the union between a man and a woman and denied more than 1,000 federal benefits to same-sex married couples, was unconstitutional because it violated the Fifth Amendment to the U.S. Constitution. The Court’s decision to strike down Section 3 may dramatically transform the legal and financial standing of hundreds of thousands of Americans. Justice Anthony M. Kennedy wrote the majority’s opinion in the 5-4 decision, with the four liberal-leaning justices―Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan―joining.
Background
Enacted in 1996, DOMA allowed states to refuse to recognize same-sex marriages performed under the laws of other states. Section 3 codified the refusal to recognize same-sex marriages for federal purposes, including insurance benefits for government employees, Social Security survivor benefits, immigration status, and the filing of joint tax returns.
In 2011, the U.S. Department of Justice (DOJ) stopped defending DOMA in court after U.S. Attorney General Eric Holder told Congress and President Barack Obama that he had determined that “classifications on sexual orientation” were not consistent with the Fifth Amendment’s guarantee of equal protection under law. The Obama administration continued to enforce DOMA nationwide, and Republican leaders in the House of Representatives took up the law’s defense in March 2011.
Section 3 was deemed unconstitutional by eight federal courts, including the U.S. 1st and 2nd Circuit Courts of Appeals, on bankruptcy, public employee benefits, estate taxes, and immigration issues.
Supreme Court’s decision
Edith Windsor and Thea Clara Spyer lived together in New York City for more than 40 years before getting married in Canada in 2007. Spyer died in 2009, and Windsor inherited her property. DOMA didn’t allow the IRS to treat Windsor as a surviving spouse, and she faced a tax bill of approximately $360,000, a bill that a spouse in an opposite-sex marriage would not have had to pay. Windsor sued. In 2012, the 2nd Circuit struck down DOMA, setting the stage for the Supreme Court to make a final determination.
The Supreme Court held that Section 3 was unconstitutional “as a deprivation of the equal liberty . . . that is protected by the Fifth Amendment.” Justice Kennedy wrote, “The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and injure those whom the State, by its marriage laws, sought to protect.” Additionally, according to the Court, “By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment.” (The Court didn’t consider the part of DOMA that allows states to refuse to recognize same-sex marriages from other states.)
Impact on benefits
Here are some of the benefits many same-sex couples stand to receive now that the Supreme Court has struck down DOMA:
- Survivor benefits. DOMA barred gay and lesbian couples from many entitlement and welfare programs, including those tied to Social Security. Same-sex spouses will now be eligible for Social Security survivor benefits and other forms of assistance.
- Tax-free employee health insurance. Federal law has lagged behind almost 40 percent of Fortune 500 companies that offer tax-free health benefits to same-sex spouses. Health coverage for the spouses of gay and lesbian employees will now be available without tax strings attached.
- Emergency leave. Current law doesn’t offer gay and lesbian employees time off from work to assist spouses or spouses’ family members. But the guarantees provided by the Family and Medical Leave Act (FMLA) will soon be available to same-sex spouses.
- Green cards and visas. There are an estimated 28,500 binational same-sex couples―i.e, one partner is a U.S. citizen or permanent resident and the other isn’t. DOMA didn’t allow citizens to petition the government for permission for non-American same-sex partners to immigrate to the country. However, now gays and lesbians may lobby the federal government for green cards and visas for a non-American same-sex partner.
Bottom line
For the first time, the Supreme Court looked with favor on the legitimacy of same-sex marriages when it comes to federal recognition of state-sanctioned unions. Federal laws governing employee benefit plans now require employers to treat employees’ same-sex spouses and opposite-sex domestic partners equally for benefits purposes.
This decision immediately extends many benefits to couples in states where same-sex marriage is legal. Currently, 13 states and Washington, D.C., recognize same-sex marriage. If you have operations in California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, Washington state, or the District of Columbia, you should analyze how the Windsor case will affect the benefits you offer to employees’ same-sex spouses.
Scott Evans is an attorney with Ford Harrison LLP. He can be reached at sevans@fordharrison.com.