Much has been written about how the Supreme Court’s DOMA ruling could impact employee benefits. Well here’s the first court ruling in which it actually has. And there are implications for HR pros.
The case, Cozen O’Connor, P.C. v. Tobits, was decided by a federal court in Philadelphia, and that court specifically cited the Supreme Court’s decision in U.S. v. Windsor in its ruling.
Here’s the background: Sarah Farley and Jean Tobits were residents of Illinois when they went to Canada and got married in 2006. Not long after being married, Farley was diagnosed with cancer and eventually passed away in 2010.
Farley worked for Cozen O’Connor, a law firm headquartered in Philadelphia, and had an ERISA-governed retirement plan with the firm. Following Farley’s death, both her parents and her spouse, Tobits, claimed the proceeds of that account.
Unsure how to handle the dispute, Cozen filed an interpleader action asking the federal court to decide whether the account funds should be paid to Tobits or to Farley’s parents.
No spousal waiver
Cozen’s ERISA-required plan document clearly stated that without a spousal waiver, the plan’s death benefits were to be paid to the participant’s surviving spouse. In this case, Tobits hadn’t waived her right to Farley’s death benefits.
Cozen’s plan defined “spouse” as the person to whom the participant has been married throughout the one-year period ending on the earlier of:
- the participant’s annuity starting date, or
- the date of the participant’s death.
In the event there was no surviving spouse, the plan document stated that the death benefits would be paid to certain relatives of the deceased, including his or her parents.
The DOMA impact
In its decision, the court recognized that prior to the High Court’s DOMA ruling, ERISA-governed retirement plans weren’t obligated to provide benefits to same-sex spouses (though the court noted that many plans actually did).
But the court cited U.S. v. Windsor and said that under Cozen’s plan, “spouse” wasn’t “restricted to members of the opposite sex.”
Therefore, Tobits was entitled to Farley’s death benefits, the court said.
Not a state that recognizes same-sex marriages?
After a cursory reading of the court’s ruling, some people may be asking themselves, “Wait a minute, how can that be? Illinois isn’t one of the states that recognize same-sex marriage.”
The court addressed this question in its ruling. According to the court, even though Illinois (the couple’s state of residence) doesn’t recognize same-sex marriages, Farley and Tobits were deemed validly married by the state because it recognizes same-sex marriages that were solemnized in other jurisdictions which, in the case of Farley and Tobits, was Canada.
Plus, an Illinois probate court had already accepted the couple’s 2006 marriage in Canada as valid when it declared Tobits Farley’s sole heir, the court added.
Finally, the court dismissed the notion that Pennsylvania state law (the state where Cozen was headquartered) restricted the definition of marriage to a man and a woman — and would, therefore, affect Tobits claim to her spouse’s death benefits.
Reason: The couple resided in a state other than PA, a state that recognized their marriage. As HR Benefits Alert has reported previously, if a couple resides in a state that recognizes same-sex marriage (or, as was the case here, a state recognizing same-sex marriages that were solemnized in other jurisdictions) then the federal government will grant those couples access to the more than 1,000 federal benefits and tax rights bestowed upon legally married couples.
And the access to such benefits will have a direct administrative impact on employers when it comes to things like FMLA leave.
Beyond the 13 states
This verdict shows that the Supreme Court’s DOMA ruling could have a huge benefits impact in states beyond the 13 (plus Washington, DC) that currently recognize same-sex marriage.
After all, Illinois is one of six states that offer broad protections and civil-union rights that come just short of recognizing same-sex marriage.
The organization Freedom to Marry offers an excellent breakdown on where states currently stand on the issue of same-sex marriage, as well as details on new legislation states are currently considering on the matter.
This post originally appeared on our sister website, HRBenefitsAlert.com.
