United States: Governmental Plans: Moving Forward After The Obergefell Decision

NOTE: This bulletin is tailored for government retirement systems and government plan administrators.  There are significant differences in the impact of the Supreme Court's holding in Obergefell on plans covered by the Employee Retirement Income Security Act (ERISA).  If you have an ERISA-covered plan, please see our bulletin for private sector plans here.


On June 26, 2015, the U.S. Supreme Court issued its monumental decision in the case of Obergefell v. Hodges, finding that same-sex couples have the legal right to marry in all U.S. jurisdictions and that states must recognize same-sex marriages performed in other states.  As a result of Obergefell, all governmental plan administrators must recognize same-sex spouses.  Because the Supreme Court partially based Obergefell on the U.S. Constitution's Equal Protection Clause, it appears that governmental employers and plans can no longer make distinctions between opposite-sex and same-sex married couples.  This will require all governmental employers and plans to review employment policies and employee benefit plans to ensure that all married couples are treated equally.  Given the enormity of this decision, we want to identify specific areas of concern for governmental plan administrators and provide some preliminary recommendations.  Governmental plan administrators considering immediate changes to their benefit plans will want to take these issues into consideration. 

The Obergefell decision follows the Supreme Court's decision in United States v. Windsor, in which the Court struck down section 3 of the Defense of Marriage Act (DOMA), which - for federal law purposes - limited the terms "marriage" and "spouse" to opposite-sex persons.  The Windsor decision, however, did not address section 2 of DOMA, which allowed states to refuse to recognize same-sex marriages performed in other states, nor did it address state laws or state Constitutional bans on same-sex marriages.  As a result, many governmental plans did not implement full recognition of same-sex spouses for purposes of spousal benefits due to state law bans on same-sex marriage in the state where the plan is located.  Those plans must now revisit all provisions that make distinctions between opposite-sex and same-sex spouses and, we believe, eliminate those differences.

Governmental Retirement Plans Considerations

Many governmental retirement plans contain design features that will need to be reviewed, and likely amended, to comply with Obergefell.  Governmental retirement plans should already be in compliance with plan qualification requirements under the Internal Revenue Code following Windsor.  This would include requirements related to the treatment of eligible rollover distributions to same-sex spouses under IRC Sec. 401(a)(31), the treatment of minimum required distributions for same-sex spouses under IRC Sec. 401(a)(9), and the testing of survivor benefits for same-sex spouses under IRC Sec. 415(b).

The Obergefell decision will now impact state level eligibility and benefit plan designs that are not governed by the qualification requirements of the Internal Revenue Code.  Following Obergefell, impacted plan features likely include:

  • Survivor Benefits: Survivor benefits provided to spouses must be amended to provide the same treatment to opposite-sex and same-sex spouses.
  • Death Benefits:  Forms of death benefits provided to "surviving spouses" (both optional and automatic) must include both opposite-sex and same-sex spouses.
  • Beneficiary Provisions: The treatment of beneficiary designations, changes, and revocations must be the same for same-sex spouses and opposite-sex spouses.  Any provisions providing benefits to surviving spouses in the absence of or in lieu of a beneficiary must include same-sex spouses.
  • Qualified Domestic Relations Orders (QDROs):  Governmental plans that accept QDROs will be required to recognize and administer domestic relations orders issued in divorces of same-sex spouses.

Governmental Health and Welfare Plans

Neither Obergefell nor Windsor addressed whether a same-sex spouse must be treated the same as an opposite-sex spouse for purposes of eligibility for health and welfare plans.  However, Windsor made clear that if same-sex spouses are eligible for health, dental, vision and cafeteria plan coverage, they  must be treated the same as opposite-sex spouses for all federal tax purposes.  Accordingly, if a governmental employer offers same-sex spouse health coverage, vision or dental coverage, flexible spending account coverage, or pre-tax premium coverage under a 125 plan, then Windsor requires that the covered same-sex spouse is entitled to the same federal tax benefits as an opposite-sex spouse. 

State Income Tax Issues

As a result of Windsor, governmental employers located in states that recognized same-sex marriage and that, therefore, extended health and welfare benefits to same sex spouses, health and welfare benefit plan administration has largely been identical for both state and federal income tax purposes.  However, if a governmental employer provided same-sex spouses with health coverage (perhaps through domestic partner benefits) in a state that did not recognize same-sex marriage, the employer would be required to impute state income to the employee on the value of the same-sex spouse's health coverage (even though such coverage was not taxable for federal income tax purposes).

Obergefell now requires all states, including the District of Columbia and U.S. territories, to recognize same-sex marriages.  Therefore, all states will be required to treat same-sex and opposite-sex spouses identically, and the state law impact on coverage for same sex-spouses should now follow the tax treatment of opposite-sex spouses.

Are Employers Now Required to Offer Same-Sex Spouses Health and Welfare Coverage?

In Obergefell, the Supreme Court relied on the Fourteenth Amendment to find that state laws prohibiting same-sex marriage was unconstitutional.  State and local governments are subject to the Fourteenth Amendment, so we believe that governmental plans are now required to treat same-sex spouses the same as opposite-sex spouses for all federal and state law purposes. For governmental plan administrators that have not yet extended same-sex spousal coverage under their health and welfare plans, the time may be ripe to consider amending these plan provisions.

Additional Considerations

Domestic Partner Benefits

For many employers, the reasons for offering domestic partner benefit coverage no longer exist.  Because same-sex couples will now have the opportunity to marry in any state and have their marriages recognized in all states, some employers that currently offer same-sex domestic partner benefits are considering whether to eliminate domestic partner benefit coverage.  In addition, governmental plan administrators must also now consider the ramifications of maintaining same-sex domestic partner benefits, including the risk of Fourteenth Amendment discrimination claims by opposite-sex employees who are not offered domestic partner benefit coverage.  Employers considering eliminating their domestic partner benefits should carefully consider several factors including: (1) the number of employees affected; (2) cost of maintaining such coverage; and (3) whether domestic partner benefits were added to address other state or local requirements or other concerns.

Plan sponsors might determine that terminating domestic partner coverage reduces administrative complexity in plans.  For example, by eliminating domestic partner benefits, a plan would not have to maintain a separate set of rules for domestic partner eligibility, which may require domestic partner affidavits and documentation to provide proof of a marriage-like relationship.  Furthermore, administering mid-year status changes due to the beginning or end of a marriage is generally more straightforward than administering mid-year changes due to the beginning or end of a domestic partnership, which is often more difficult to determine.  Finally, eliminating domestic partner benefits will also eliminate the need to impute income to an employee on the value of benefits provided to domestic partners so the value of those benefits can be taxed (to the extent that the domestic partner is not a tax dependent).

If the decision is made to eliminate domestic partner benefit coverage, a transition period should be established to allow affected employees the opportunity to consider all of their options for benefits coverage, which might include getting married or finding other coverage options for a domestic partner.  We believe that many employers will use a one-year transition period in conjunction with the open enrollment period in 2016, resulting in the elimination of domestic partner benefits for the 2017 plan year.  However, each employer will need to determine what is a reasonable transition period given its unique employee population.

Retroactivity of Obergefell Decision

An open issue that has not been decided is the effective date for employers to comply with Obergefell.  In other words, what is the date upon which a same-sex marriage should be recognized?  For example, if a previously unrecognized same-sex spouse was denied a death benefit because the plan did not recognize the marriage, does the plan have to go back and pay the death benefit if the plan participant died prior to the Obergefell decision?  How far back must a plan go with respect to these benefits?  Similarly, if a plan refused to recognize a QDRO of a divorcing same-sex couple that was ordered prior to the Obergefell decision, must it now recognize that QDRO, or will it only have to recognize QDROs for same-sex divorcing couples that are ordered after the date of the Obergefell decision?

Following the Windsor decision, the Internal Revenue Service (IRS) issued guidance which required changes for plan qualification purposes to be made on a prospective basis only (see Ice Miller notice dated April 14, 2014 click here).  The guidance also required employers to treat employees in same-sex marriage as though their date of marriage was effective on the date of the Windsor decision.  In the absence of other guidance, a reasonable plan administrator might turn to the IRS's approach after Windsor (even if only by analogy) and set the "compliance date" for Obergefell as the date of the Court's decision (June 26, 2015).  While we think this is a reasonable approach, it could still be challenged in federal court by same-sex spouses claiming that the Constitution requires retroactive recognition of their marriage to their wedding date.  Moreover, since the Obergefell decision will largely affect the tax laws of those states/jurisdictions that previously did not recognize same-sex marriage, each state or jurisdiction may issue its own guidance on the timing of the implementation of the Obergefell decision (which may present a series of compliance hurdles).

While we have addressed some of the areas of concern that governmental plan administrators should be considering in light of the Obergefell decision, it is too soon to know its full implications.  We will continue to monitor legal developments and advise on approaches taken by governmental plans and employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions