The Issue: What should plan sponsors do about benefits offered to registered domestic partners in light of the Supreme Court's Defense of Marriage Act ruling?
The Solution: Plan sponsors need to be aware that there is a distinction between California registered domestic partners and same sex spouses. From a federal standpoint, the treatment is different for domestic partners versus spouses.
Analysis: The Supreme Court's ruling in U.S. v. Windsor affects the treatment of same-sex spouses for purposes of various federal laws and regulations. For example, in states that allow same-sex marriage (such as California after the Supreme Court's Proposition 8 ruling in Hollingsworth v. Perry), the value of health coverage offered to an employee's same-sex spouse will no longer be imputed in the employee's income. However, the same is not necessarily true for registered domestic partners. While California generally provides registered domestic partners with the same rights and responsibilities as spouses, they are not spouses for federal purposes. Thus, while the DOMA ruling will mean plan sponsors have to change how they treat same-sex spouses, nothing changes for domestic partners. We expect the IRS and other governmental agencies will issue guidance regarding the treatment of same-sex spouses (e.g. which states law determines marital status and retroactivity).
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