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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104

 

www.wagnerlawgroup.com

 

 

June 27, 2013 

 State and Federal Law Alert

 

Part of DOMA Ruled Unconstitutional

 

The U.S. Supreme Court has upheld a lower court decision declaring Section 3 of the Defense of Marriage Act ("DOMA") unconstitutional.

 

Section 3 of DOMA, defines "marriage," for most federal purposes, as "a legal union between one man and one woman as husband and wife." It goes on to state that "the word 'spouse' refers only to a person of the opposite sex who is a husband or a wife."

 

The case, United States v. Windsor, involved a same sex couple who married in Canada and lived in New York, which recognizes the validity of same-sex marriages from other jurisdictions. Later, one of the partners died, leaving her entire estate to the survivor. If the federal government had recognized this marriage, the estate would have been exempted from any federal estate tax because the survivor would be a "surviving spouse." However, because of DOMA, the marriage was not recognized. Since the survivor was not considered to be a surviving spouse, an estate tax of $363,053 was assessed. The survivor challenged the tax, claiming that DOMA violates the constitutional guarantee of equal protection.

 

In a five-to-four decision, the Supreme Court noted that "regulation of domestic relations is an area that has long been regarded as a virtually exclusive province of the States." It went on to say that "when the State used its...authority to define the marital relationship [to include same-sex marriage], its role and its power in making the decision enhanced the recognition, dignity and protection of the class in their own community....DOMA operates to deprive same-sex couples of [these] benefits and responsibilities and...seeks to injure the very class New York seeks to protect. By doing so it violates basic due process and equal protection principles applicable to the Federal government."

 

It concluded that "though Congress has great authority...it cannot deny the liberty protected by the Due Process Clause of the Fifth Amendment."

 

With this decision, it appears that same-sex couples in states that recognize such marriages will obtain marriage-based federal rights and benefits, including rights to: COBRA continuation; HIPAA Special Enrollments; and cafeteria plan pre-tax contributions and status change events. Employees with same-sex spouses will not be subject to imputed income on the value of their spouses' group health care coverage. Also, same-sex spouses will be entitled to certain Social Security and Medicare benefits.

 

Still, many questions remain. For example, the Supreme Court did not rule on the validity of Section 2 of DOMA, which gives individual states the right to recognize, or not recognize, same-sex marriages of other states. Unless Section 2 of DOMA is also declared unconstitutional, the conflict between state and federal law could become problematic. For example, if same-sex married couples move to states that do not recognize same sex marriages, they might not be entitled to the same rights and benefits, since, under their new state's laws, they are not married and would not be "spouses" as defined by the new state.

 

Another question to be considered is whether this ruling would be considered to create a "status change event" under the cafeteria plan rules which would enable a participant to make mid-year pre-tax election changes with regards to their newly-recognized spouses.

 

There is also the question of whether the ruling will be considered retroactive. This could affect, among other many things, taxation of health care coverage and cafeteria plan contributions from previous years.

 

As the Supreme Court decision pointed out, "DOMA's sweep involves over 1,000 federal statutes and a myriad of federal regulations." No doubt, it will take many agency rulings and, no doubt, many court cases, before all of the issues can be resolved.

 

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Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.

 

This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.