Earlier this month, the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) issued guidance and regulations pertinent to the recent Supreme Court decision on the Defense of Marriage Act (DOMA) and the implementation of the Patient Protection and Affordable Care Act.
Interpretation of Marriage in the Wake of U.S. v Windsor
As part of ongoing agency interpretation of the impact of the Supreme Court’s decision in United States v. Windsor which struck down the provisions of DOMA that denied federal benefits to same-sex couples who were legally married, the Employee Benefits Security Administration (EBSA) of DOL released new guidance on Sept. 18.
According to EBSA, the terms “spouse” and “marriage” in Title I of the Employee Retirement Income Security Act (ERISA) and in related department regulations should be read to include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriages, regardless of where the couple actually lives or works.
In explaining its decision to look to the law of the state or jurisdiction where the marriage occurred (referred to as the “state of celebration” by DOL), the agency cited the difficulty that would be faced by employers with locations in multiple jurisdictions and by employees moving from state to state.
EBSA’s guidance clarifies that it covers only relationships identified as “marriage” under state law. It does not cover other types of recognized unions such as domestic partnerships or civil unions for either same-sex or opposite-sex couples.
This guidance follows similar announcements by the IRS and the U.S. Citizenship and Immigration Services, which similarly announced that benefits for spouses and married couples would be valid for marriages legally made in the place where the marriage was celebrated. Both the IRS and EBSA anticipate additional guidance in this area.
Employer Health Care Reporting
On Sept. 5, the (IRS) issued two proposed rules outlining employer reporting requirements under the Patient Protection and Affordable Care Act (ACA). One rule implements Internal Revenue Code (IRC) section 6055 and would require insurers, self-insured employers, government-sponsored programs and entities that provide minimum essential coverage to report on minimum essential coverage. The second rule implements IRC Section 6056 and would require large employers to report to the IRS and to their employees on information regarding the health care coverage they offer to full-time employees.
These reporting requirements are meant to help identify whether large employers are in compliance with the “pay or play” requirements of the ACA. It will also help identify individuals who have been offered coverage by their employers and are, therefore, ineligible for premium tax credits as well as help identify those individuals who are complying with the ACA’s individual mandate and whether they are eligible for premium tax credits because they lack minimum essential coverage. The lack of rules governing employer reporting was cited by the IRS as one reason for delaying implementation of the employer mandate, and its accompanying penalties, until 2015.
The proposed rules require detailed information from employers to identify employees, the type of coverage offered and information on employee’s dependents who are covered under the employer’s plan. SHRM plans to submit comments to the IRS discussing the practical impact of these rules in the workplace and suggesting ways to streamline the reporting requirements. Comments are due by Nov. 8, 2013.