The Supreme Court has had a busy summer. Between ruling in favor of religious dress accommodations in EEOC v. Abercrombie and Fitch, fashioning a new test to apply in pregnancy bias cases in Young v. UPS, and ensuring the viability of the Affordable Care Act in King v. Burwell, you’d think that the Supreme Court had given employers enough to contemplate. But the nine Justices waited until the end of their term to deliver one of the most hotly anticipated decisions all year in Obergefell v. Hodges. By a 5 to 4 margin, the Court held that state bans on same-sex marriage are unconstitutional. Now, same sex couples can legally wed in all 50 states, and presumably, will be entitled to the same state and federal marriage-related rights and benefits that opposite-sex married couples enjoy.

But the Obergefell ruling raises questions for many employers, who are wondering what employment-related benefits are now required for same-sex couples. Obergefell was not an employment case and did not directly address any employment law issues; however, employers can expect to feel some impact from the decision.

Currently, there is no federal law that prohibits discrimination on the basis of an employee’s sexual orientation or gender identity. The 50 states are a patchwork of varying anti-discrimination laws in that regard. Indeed, some states are a patchwork of laws among cities within the state. While some states and cities prohibit discrimination and harassment on the basis of an employee’s sexual orientation,      Continue Reading...

The HHS Office for Civil Rights (OCR) has provided guidance on the status of same-sex spouses under the HIPAA privacy rule.

In light of the Supreme Court's Windsor decision, same-sex spouses are recognized as lawful spouses for purposes of all federal law, including HIPAA. Under the HIPAA privacy rule, spouses are "family members" of a protected individual, which is relevant for at least the following two purposes:

• Under certain circumstances, a covered entity (including a health plan) is permitted to share an individual's protected health information with the individual's family members. The guidance makes clear that a family member includes an individual's same-sex spouse.
   
• The privacy rule prohibits health plans from using or disclosing genetic information for underwriting purposes. Genetic information includes, for example, genetic tests of an individual's family member or information regarding the manifestation of a disease or disorder in an individual's family member. The guidance makes clear that a family member for this purposes also includes an individual's same-sex spouse.

An individual's same-sex spouse may also qualify as the "personal representative" of an individual under the privacy rule, which, among other things, would allow the same-sex spouse to act on behalf of the individual in some circumstances. OCR indicates that further clarification regarding treatment of same-sex spouses as personal representatives will be forthcoming.

The bottom line for health plans and other covered entities is that same-sex spouses will be treated the same as opposite-sex spouses for purposes of the HIPAA      Continue Reading...

The IRS released its long-anticipated guidance today on the impact of the Windsor case to qualified retirement plans. The guidance resolves a potentially thorny issue on retroactive recognition of same-sex marriages and clarifies when plans must adopt any amendments required to comply with Windsor. Here are the highlights:

Retroactivity Permitted But Not Required. Plans are not required to recognize same-sex marriages for any period before June 26, 2013 (the date of the Windsor decision). They are permitted to designate an earlier date as of which same-sex marriages will be recognized for plan purposes, although the guidance observes that recognizing same-sex marriages for all purposes as of a date earlier than June 26, 2013 may trigger requirements that are difficult to implement retroactively and may create unintended consequences, so caution must be exercised. 

Amendments May Not Be Necessary. A plan must be amended to reflect the outcome in Windsor only if the plan terms are inconsistent with Windsor. For example, a plan that defines a spouse as only a person of the opposite sex would be inconsistent with the outcome in Windsor. But a plan that merely uses the term "spouse" or "lawful spouse" without limiting it to persons of the opposite sex may be ok.

Amendment Timing. To the extent an amendment is required, it generally must be adopted by December 31, 2014. (Special rules may apply for non-calendar-year plans and governmental plans.)

Health and Welfare Plans Unaffected. This guidance addresses only retirement plans and does not impact health and welfare plans. 

The IRS's notice (Notice      Continue Reading...

Has it really only been a week since the Kansas House of Representatives passed House Bill 2453? Supporters said it simply protects religious liberty. Opponents countered that it sanctions discrimination against same-sex couples; allows police officers, fire fighters, and other government employees to refuse to provide basic or emergency services to tax payers; and imposes significant burdens on Kansas employers. A nationwide hullabaloo ensued.

In another round of post-Windsor guidance (here), the IRS has provided some alternative processes for obtaining refunds of employment taxes (FICA tax and withheld income tax) paid with respect to same-sex spouses prior to the Supreme Court's decision in Windsor (e.g., for coverage under a cafeteria or health plan).

Overpayments for 2013. With respect to taxes paid in 2013, there are two alternative procedures for claiming a refund: (1) the employer may true-up the entire year's withholding on its fourth quarter 2013 employment tax return (Form 941); or (2) the employer may file a single amended employment tax return (Form 941-X) for the fourth quarter of 2013 to reflect the correct withholding amounts for the entire year. Both of these approaches allow employers to avoid filing amended returns for each quarter of the year to correct the withholding for that quarter.

For the third quarter of 2013 (July-September), employers should report on the employment tax return for that quarter the amount of taxes actually withheld and not refunded by the end of the quarter. For example, if an employer adjusted its withholding system effective August 1, 2013 and also refunded any taxes withheld in July 2013, then it would not report any of those withheld amounts on its Form 941 for the third quarter. But if it did not refund the July taxes by the end of the third quarter, then those taxes should be reported on the third quarter return and a refund claimed by way of one of the methods      Continue Reading...