The COBRA Blog

How Does IRS Same-Sex Guidance Impact COBRA Administration?

Posted by Robert Meyers on Wed, Apr 16, 2014 @ 10:04 AM

In 2012 the United States Supreme Court ruled on United States v. Windsor, recognizing the legitimacy of legal same-sex marriage for the purpose of federal law.

In 2014, the IRS released guidance on how that decision will affect employer-sponsored retirement plans.

You wouldn’t think these events would have any impact on COBRA; at least not at first glance. After all, the new IRS guidance was limited to retirement plans qualified under Internal Revenue Code Section 401.

By upholding Windsor, the Supreme Court struck down the Defense of Marriage Act (DOMA) – those waves are much bigger and are not limited to the retirement plan community.

Before Windsor, DOMA defined the word “marriage” to mean the legal union of one man and one woman. DOMA allowed plans to withhold benefits from same-sex couples who had been legally married in a State or country where same-sex marriage was allowed. 

“DOMA’s limitations on the definitions of ‘marriage’ and ‘spouse’ affected a myriad of federal laws, including the Internal Revenue Code, ERISA, COBRA, and HIPAA, and thus deprived same-sex couples legally married under the laws of certain states of certain legal protections and preferred tax treatment under spousal retirement and health care benefits” (source).

With the end of DOMA, those effects have come undone. As a result, the federal laws which had been affected are no longer operating on DOMA’s definition. In short, Windsor represents ground-shaking political changes with extraordinary personal ramifications for many Americans – and it affects COBRA, too.  Still, not everything’s different. Here’s how the ruling does (and doesn’t) affect COBRA.

What’s Different?

By lifting DOMA’s restriction on what it means to be married, the Supreme Court required COBRA coverage to extend to an employee’s same-sex spouse.

If you’re an employer or HR manager, take note! The Windsor decision means that if your employee is legally married to someone of the same sex, you must offer COBRA to their spouse.

What’s the Same?

Otherwise, your responsibilities as an employer remain unchanged. As always, it’s your duty to provide your COBRA administrator with accurate information about your employees. And as always, one facet of that information is their legally married status.

Questions about these developments? Please don’t hesitate to contact us. We’re happy to provide COBRA administration information and guidance whenever you need it.

Could you benefit from having access to COBRA info and tools right at your fingertips? Take a look at our proprietary web-based solution by requesting a demo here.


Tags: cobra administration, same-sex guidance for employer-sponsored retiremen, COBRA benefits for same-sex spouses

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