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California Supreme Court Ruling on Same-Sex Marriage: Implications for Employee Benefit Plans
Employers should review their benefit plans and programs to ensure that their plans are drafted properly to reflect the intended coverage or exclusion of same-sex partners and compliance with applicable laws, legal experts say.

By Joseph S. Adams, Todd A. Solomon and Brian J. Tiemann of McDermott Will & Emery LLP  6/4/2009
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Employers should review their benefit plans and programs to ensure that their plans are drafted properly to reflect the intended coverage or exclusion of same-sex partners and compliance with applicable laws, legal experts say.

On May 26, 2009, the California Supreme Court upheld Proposition 8, the November 2008 ballot measure that amended the California state constitution to define marriage as a union between a man and a woman. Notably, however, the court ruled unanimously that the more than 18,000 same-sex marriages performed in California during the brief interval when same-sex marriage was legal in California will continue to be valid and recognized under state law. In 2008, the California Supreme Court ruled that state laws limiting marriage to opposite-sex couples violated same-sex couples’ right to equal protection of the laws as guaranteed by the state constitution prior to the Proposition 8 amendment.

The Court’s Analysis of Proposition 8

In voting 6-1 to uphold the validity of Proposition 8, the California Supreme Court had to analyze whether Proposition 8 was a “revision” to the state constitution—which requires approval by at least two-thirds of both houses of the state legislature before going to voters—or an “amendment,” which can proceed directly to voters without legislative approval. The court determined that Proposition 8 is not a revision to the constitution because it does not alter the nature of the government plan or framework set forth in the state constitution.

The court acknowledged that its decision to uphold Proposition 8 could be viewed as at odds with its 2008 decision. However, the majority opinion asserted that Proposition 8 carved out a narrow exception to state constitutional rights of equality and privacy, “reserving the official designation of the term ‘marriage’ for the union of opposite-sex couples ... but leaving undisturbed all of the other extremely significant substantive aspects of a same-sex couple’s state constitutional right to establish an officially recognized and protected family relationship.”

Proposition 8’s Impact on Prior Same-Sex Marriages

In deciding unanimously to recognize the same-sex marriages performed prior to the passage of Proposition 8, the court determined that there was insufficient evidence that voters intended for Proposition 8 to have a retroactive effect. The court examined the materials provided in the ballot pamphlet mailed to voters in advance of the election and the ballot and determined that the language was “insufficient to demonstrate, clearly and unambiguously, that the voters must have intended a retroactive application.” According to the court, same-sex couples who entered into marriages prior to the passage of Proposition 8 did so in reliance on the law as it existed at that time and that to invalidate their marriages retroactively would deprive these couples of vested rights without the due process of law. Therefore, same-sex couples who married in California prior to Nov. 4, 2008, will continue to be legally married and will continue to be entitled to all of the rights, benefits and protections that California law affords to legally married spouses.

Implications for Employee Benefit Plans

From an employee benefits perspective, the immediate impact of the court’s ruling is that approximately 18,000 same-sex marriages have been ruled valid, unlike the same-sex marriages performed in San Francisco in 2004. As a result, employers will need to review their employee benefit plans to determine whether changes are necessary or desirable in light of the fact that spousal benefits may be provided indefinitely to a limited number of same-sex couples. For instance, employers might need to revise eligibility descriptions in summary plan descriptions (SPDs) and enrollment forms to address the types of same-sex marriages eligible for spousal benefits. In addition, employers will have to be careful and specific in defining the term “spouse” in their benefit plan documents and SPDs.

More broadly, the California Insurance Equality Act already requires insurance plans to offer spousal equivalent benefits to registered domestic partners in California. Because this act remains intact after Proposition 8, same-sex partners will continue to receive protection and coverage under insurance plans in the state, so long as they register their domestic partnership under California law. However, it is important to note that the California Insurance Equality Act does not apply to self-funded plans, plans that are insured using insurance contracts issued outside of the state of California and other types of employee benefit programs, such as qualified and nonqualified retirement plans.

Employers are advised to review their benefit plans and programs in light of the California developments to ensure that their plans are drafted properly to reflect the intended coverage or exclusion of same-sex partners and compliance with applicable laws.

Joseph S. Adams is a partner in the law firm of McDermott Will & Emery LLP based in the firm’s Chicago office and concentrates on employee benefits and executive compensation matters for public, private and tax-exempt organizations. Todd A. Solomon, a partner based in the firm’s Chicago office, concentrates on designing, amending and administering pension plans, profit-sharing plans, 401(k) plans, employee stock ownership plans, 403(b) plans and nonqualified deferred compensation arrangements. Brian J. Tiemann is an associate in the firm's Chicago office and a member of the employee benefits department.

© 2009 McDermott Will & Emery. All Rights Reserved.

This article should not be construed as legal advice.

Related Articles:

Calif. Supreme Court Rejects Challenges to Prop. 8, but Finds Existing Same-Sex Marriages Valid, SHRM Legal Issues, May 2009

Same-Sex Marriage and Benefit Plans, SHRM Online Benefits Discipline, June 2008

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