Given the recent Supreme Court rulings regarding same-sex marriages, Castle Rock Investment Company wanted to shed some light on the impact it will have employee benefits. So, we turned to the experts. Thank you to Brownstein Hyatt Farber Schreck, LLP for the informative information below:

On June 26, 2013, the U.S. Supreme Court (the “Court”) issued two decisions, finding that federal and California laws on same-sex marriages are unconstitutional. These decisions will have far-reaching and wide-ranging consequences on employee benefits programs. This Alert highlights some of the benefits-related issues employers will need to address in the very near future in light of the Court’s decisions.



As an initial course of action, employers should consider the following:

Retirement Plans (such as 401(k) and defined benefit pension plans):

  • An employee’s same-sex spouse will have to consent to the participant’s naming of a nonspouse beneficiary.
  • An employee’s same-sex spouse will have to consent to the participant’s distribution elections — including hardship distributions, loans, and the selection of the form of benefit distribution upon retirement, if the participant wants to be paid in a form other than a joint and survivor annuity with the spouse as the surviving annuitant.
  • An employee’s same-sex spouse must be treated as an alternate payee under a QDRO.
  • Health and Welfare Plans (such as medical, dental, vision, life insurance, cafeteria, flexible spending accounts, health savings accounts, etc.):
  • Employees can now pay for their share of the cost of providing health coverage to their same-sex spouses on a pre-tax basis. No longer must an employer’s share of the cost of providing health coverage to an employee’s same-sex spouse be imputed as income to the employee. (Note: we believe that this does not result in changes for domestic partners.)
  • The Court’s decisions likely are a status change event, which could allow employees to make mid-year changes to their health FSA elections to take into account health expenses of their same-sex spouses.
  • Same-sex spouses are now entitled to elect COBRA health care continuation coverage.
  • Employees can elect dependent life coverage for same-sex spouses.

Other Benefits Programs:

  • Employees have the right to take FMLA leave to care for a sick same-sex spouse.
  • Same-sex spouses should be required to give consent to employee-spouses’ exercise to purchase stock under the employer’s stock option or other equity ownership programs.
  • These administrative changes will require changes in plan documents, employee communications, administrative forms and procedures.
  • Brownstein Comment: Employers should work with their third party administrators and legal counsel to ensure that their benefit plans become fully-compliant with the law.


Since DOMA section 3 has been found to be unconstitutional, it is as if the law never existed. This raises numerous plan administration issues. For example, do participants and their same-sex spouses have the right to make claims for benefits on a retroactive basis? Will plan administrators have to invalidate distribution elections made by participants without same-sex spousal consent? If these types of actions are required, how must they be accomplished? Future guidance may provide some direction on these and other issues but such guidance will take time. Employers and plan administrators will need to determine what this retroactive invalidation of DOMA means for their benefit plans and what actions may be required to undo or redo prior administrative decisions and actions.

If you have any questions about, or would like assistance in analyzing the impact of, the Court’s decisions on your benefit plans, please contact one of the Brownstein benefits group members, including Nancy Strelau, via e-mail at, or call her at 303.223.1151.